Avonwick Holdings Ltd v Webinvest Ltd & Anor
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE LEWISON
- LADY JUSTICE SHARP
- LORD JUSTICE BURNETT
Areas of Law
- Contract Law
- Civil Procedure
- Evidence Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
The case deals with the admissibility of correspondence marked 'Without Prejudice' and document disclosure from arbitration related to a loan dispute between Avonwick and Webinvest. The court held that without prejudice privilege did not attach to communications because no dispute existed at the time. The privilege on negotiations leading to the arbitration settlement was not waived.
Judgment
Mr Justice Sales :
Introduction
This is the trial of a claim for repayment of monies said to be due under the terms of a loan agreement between the Claimant (“Avonwick”, a company incorporated in the British Virgin Islands) and the First Defendant (“Webinvest”, a company incorporated in St Vincent and the Grenadines) dated 23 April 2010 (executed by Webinvest on 26 April 2010 - “the Loan Agreement”) and also under the terms of an associated Deed of Guarantee also dated 23 April 2010 (“the Guarantee”) between the Second Defendant (“Mr Shlosberg”), who is the beneficial owner of Webinvest, and Avonwick. The claims relate to a loan of US$100 million made by Avonwick to Webinvest.
Webinvest used that money, combined with another US$100 million from its own resources, to make a loan of US$200 million to a company called Globoid Finance Establishment (“Globoid”), which is owned by Vitaliy Machitski (“Mr Machitski”), a Russian businessman. At the time, Mr Machitski was a close and longstanding friend of Mr Shlosberg.
The loan from Avonwick to Webinvest was negotiated between Mr Shlosberg and Mr Vitaliy Gayduk (“Mr Gayduk”) and their respective staff. Mr Gayduk is a wealthy Ukrainian businessman, who, at the time, was also a close friend of Mr Shlosberg and his family and had been for some years. Avonwick is owned by Mrs Gayduk.
The loan of US$200 million from Webinvest to Globoid (“the Globoid loan”) was due to be repaid in May 2012. The loan of US$100 million from Avonwick to Webinvest (“the Avonwick loan”) was due to be repaid a few days later.
In the event, Globoid did not repay the Globoid loan. In turn, Webinvest failed to repay the Avonwick loan. Avonwick allowed Webinvest and Mr Shlosberg a period of grace before demanding repayment, principally by reason of a personal tragedy which affected Mr Shlosberg from 2011, when his step-son was found to be suffering from cancer. Mr Shlosberg’s attention was focused on trying to find a cure, but without success. His step-son died on 13 June 2013. Eventually, in April 2014, Avonwick made formal demands for the repayment of the Avonwick loan by Webinvest and by Mr Shlosberg under the Guarantee.
The principal issue at the heart of this case is whether there was a collateral oral agreement made between Mr Shlosberg and Mr Gayduk to the effect that the Avonwick loan and interest thereon would only fall to be repaid by Webinvest, in amounts in relevant proportion to the sources of the loan to Globoid, if