VIS Trading Co Ltd v Nazarov & Anor
March 20, 2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LADY JUSTICE BLACK
- LORD JUSTICE TREACY
- LORD JUSTICE CHRISTOPHER CLARKE
Areas of Law
- Contract Law
- Conflict of Laws
March 20, 2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
Ansols appeal challenges a High Court finding that a binding contract existed with VIS, a Belize company controlled by Sergey Vorobyev, arising from a letter written on 24 April 2009 by Dmitry Nazarov on Ansol letterhead. The underlying relationship involved cross-border loans in 2005 to Nevadabased Orange Alloy Industry LLC and Panamanian Chansler S.A., with promissory notes and pledges that proved illusory. After a dishonoured JEPPPE promissory note and a backdated January 2008 agreement, all obligations fell due on 1 March 2008. In April 2009, Nazarov proposed deferment and guaranteed payments of at least USD 2.25 million monthly, principal by January 2010 and interest by Q2 2010. Applying Russian Civil Code Articles 431, 435 and 438, the Court of Appeal held the letter was a sufficiently certain offer and that VIS accepted by forbearance, affirming the judgment and dismissing Ansols appeal.
Judgment
LORD JUSTICE CHRISTOPHER CLARKE:
The parties to this litigation were described by Leggatt J in the following terms:
“ 5 The claimant, VIS, is a company incorporated in Belize which is controlled by Mr Vorobyev. Mr Vorobyev is a Russian businessman who, until he recently retired, was active in the fishing industry. VIS carried on a fishing business in South Korea.
6 Mr Nazarov is a citizen of Tajikistan where he became a successful businessman mainly as a result of trading with the Tajik Aluminium Plant ("TadAZ"). He also built up substantial business interests in Russia. As described below, Mr Nazarov's fortunes suffered a major setback in December 2004 when his business relationship with TadAZ was terminated. He subsequently became involved in litigation against TadAZ and OJSC Russian Aluminium ("Rusal"). Since December 2004 Mr Nazarov has been resident in England.
7 Ansol, a company incorporated in Guernsey, is controlled by Mr Nazarov and is the principal company through which his business activities are conducted. Mr Nazarov is the sole director of Ansol.
8 The third defendant, OJSC Sotsinvestbank ("SIB"), is a Russian bank in which Mr Nazarov held a controlling interest from 2003 until he lost control of SIB in January 2008.
9 The fourth defendant, Mr Neverov, is the former General Director of SIB. ”
This is an appeal brought by Ansol against the decision of the judge that there was a contract between it and VIS, whereby it undertook to guarantee that certain loans would be repaid in accordance with a specified timetable.
The background to the making of the loans is a complicated one which is fully explained in the judgment. For present purposes it is sufficient to record the basic details.
The 4 February 2005 loans
On 4 February 2005 two loan agreements were made between VIS and a company, incorporated in Nevada, called Orange Alloy Industry LLC which was controlled by Mr Nazarov. One was for $ 4 million and the other was for $ 5 million. Each loan was for a period of six months and was secured by a promissory note payable on 9 August 2005 for the amount of the loan including interest.
The 5 July 2005 loan
On 5 July 2005 VIS loaned a Panamanian company called Chansler S.A. (“Chansler”) $ 5 million for six months against the security of a pledge from Albamet Corporation Ltd, a BVI company (“Albamet”). Chansler was another company controlled by Mr Nazarov. The most likely reason for the loan being made to Chansler was that on 13 M