Fiona Trust & Holding Corporation & Ors v Yuri Privalov & Ors
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE ANDREW SMITH
Areas of Law
- Civil Procedure
- Equity and Trusts
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The judgment involves the assessment of compensation for freezing orders made against the applicants, who were accused of various fraudulent schemes. The court dismissed many claims but significant freezing orders were initially imposed. The claimants' appeal failed, and the applicants sought damages under court undertakings. The court reinforced the principle that credible evidence of loss must be shown for an inquiry and, although the freezing orders were unjustified due to some material breaches by the claimants, there was enough evidence of loss to warrant an inquiry into damages.
Judgment
Mr Justice Andrew Smith:
Introduction
In this judgment I adopt the abbreviated forms used in my judgment delivered on 10 December 2010 after the trial of these proceedings, [2010] EWHC 3199 (the “December 2010 judgment”).
The applicants seek directions for an assessment of compensation to be paid under undertakings given to the court when it made freezing orders against them and other defendants. The claimants resist the application on the grounds (i) that the court should exercise its discretion not to enforce the undertakings because of conduct of or attributable to the applicants, and (ii) that the applicants have not shown a sufficient case that they suffered loss that should be compensated.
I do not need in this judgment to give a detailed explanation of the claims in the proceedings, and it is sufficient for present purposes to cite this description of the relevant schemes from paragraph 47 of my December 2010 judgment:
“The schemes between defendants that are said to be corrupt … are these:
i) The "Sovcomflot Clarkson commissions" scheme, by which between 2001 and 2004 it was arranged that Clarkson should act as brokers for the Sovcomflot group, to buy and sell ships and should pay "commission" upon the purchases and sales to Mr. Nikitin or at his direction. It is said that as a result the Standard Maritime defendants and other companies … have been paid over $30 million, ….
ii) The "Tam commissions" scheme, whereby, when in 2001 the Sovcomflot group were buying in the so-called "Athenian transaction" (which was itself one of the purchases comprised in the Sovcomflot Clarkson commissions scheme) six ships which were being built by Hyundai Heavy Industries ("HHI"), address commissions paid by HHI amounting to $1.2 million were diverted to Milmont.
iii)….
iv) ….
v) The "RCB" scheme, whereby, as the claimants allege, in 2001 Mr. Nikitin arranged for Meino to acquire a debt owed (or said to be owed) by the Sovcomflot group to the Russian Commercial Bank Ltd. ("RCB"), and Mr Skarga was party to arranging for the debt to be discharged on terms that improperly benefited Mr. Nikitin. The claim in respect of this scheme is about $3 million.
vi) The "SLB arrangements" scheme, whereby in 2002 the Sovcomflot group sold eight vessels, the Arbat vessels, to Standard Maritime defendants upon terms that they were to be leased back to the sellers on bareboat charters and re-purchased at the end of the charter periods. It is alleged that these