(1) Inna Gudavadze (2) Liana Zhmotova (3) Iya Patarkatsishvili (4) Natela Patarkatsishvili Claimants v (1) Carlina Overseas Corporation (2) Ivane Chkhartishvili (3) Azerbaijan (acg) Ltd Defendants and by way of Counterclaim Azerbaijan (Acg) Ltd Claimant by way of Counterclaim (1) Carlina Overseas Corporation (2) Ivane Chkhartishvili (3) Inna Gudavadze (4) Liana Zhmotova (5) Iya Patarkatsishvili (6) Natela Patarkatsishvili Defendants by way of Counterclaim
| Jurisdiction | British Virgin Islands |
| Judgment Date | 12 June 2012 |
| Judgment citation (vLex) | [2012] ECSC J0612-5 |
| Docket Number | CLAIM NO: BVIHC (COM) 2012/0011 |
| Court | High Court (British Virgin Islands) |
| Date | 12 June 2012 |
EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE COMMERCIAL DIVISION
CLAIM NO: BVIHC (COM) 2012/0011
and
Mr Stephen Moverley Smith QC; Mr Steven Thompson; Mr Andrew Thorp; and Mr James Noble for the Claimants; Mr Stephen Atherton QC and Mr Scott Cruickshank for the first Defendant; Mr Jonathan Crow QC; Mr Stephen Midwinter and Mr Robert Nader for the second Defendant; Mr Robert Levy QC and Mr Oliver Clifton for the third Defendant
(Black Swan jurisdiction - injunctions granted ex parte restraining dealings with shares in first Defendant company in aid of Claimants' proceedings in Republic of Georgia - effective return date - Defendants seeking discharge of injunctions and/or summary judgment - whether summary judgment appropriate remedy in Black Swan cases - whether injunctions should be discharged on grounds of misrepresentation or non disclosure - whether injunctions should be discharged for want of clean hands on part of Claimants' predecessor in title - whether anti suit injunction should be granted to second Defendant restraining further prosecution of Georgian proceedings - allegations that second Defendant would be arrested on trumped up charges if he returned to Georgia - allegations that proceedings in Georgia would be biased against second Defendant - Cherney v Deripaska and Masri v Consolidated Contractors considered)
There are before the Court applications (1) by the second and third Defendants for the discharge of an injunction originally granted to the Claimants on 3 February 2012 and continued on 22 February until a full inter partes hearing (being the present hearing) could be arranged ('the injunction'); (2) by the second Defendant for summary judgment against the Claimants on their claim; (3) by the third Defendant for summary judgment on its counterclaim; (4) by the third Defendant for additional fortification of the Claimants' cross undertaking in damages given upon the grant and continuation of the injunction; and (5) by the second Defendant for an anti suit injunction restraining the Claimants from further prosecuting proceedings under way against him in the Republic of Georgia ('Georgia').
Although, as was pointed out by Mr Robert Levy QC, who appeared together with Mr Oliver Clifton for the third defendant ('ACG'), there is no application by the Claimants for continuation of the injunction, Mr Moverley Smith QC, who appeared together with Mr Steven Thompson, Mr Andrew Thorp and Mr James Noble for the Claimants, addressed the Court at length with reasons why it should be continued. His submissions were responded to at similar length and it seems to me that I have to proceed on the footing that an application by the Claimants for continuation of the injunction is properly before me. That said, it seems to me regrettable that the proper procedure for seeking continuation at an inter partes hearing of an injunction granted ex parte should not have been followed in this case.
The Claimants claim to be the heirs under Georgian law of Badri Patarkatsishvili ('the deceased'), a prominent Georgian businessman and politician who died unexpectedly in England in 2008. 1 As such, they say that they are beneficially entitled to 49 shares 2 in the first Defendant, a BVI registered company called Carlina Overseas Corporation ('Carlina'). These shares were allotted and issued on 10 December 2006 to the second Defendant, Ivane Chkhartishvili, who remains, as at the date of this judgment, their legal owner. The Claimants say that he holds the shares as bare nominee for them. Mr Chkhartishvili was referred to throughout the hearing as 'Vano', and I hope that he will acquit me of any disrespect if I do the same in this judgment.
The claimants originally 3 pleaded that down to December 2006 one of the deceased's investments was a 60% holding in a Cypriot registered company called Krolle Services Limited ('Krolle'), which was the ultimate owner of a port and oil terminal on the black sea coast ('the terminal'). The other 40% was said to be held by a friend of the deceased called Vitaly Sepiashvili, to whom I shall refer, again without intending any disrespect, as 'Vitaly.' The statement of claim goes on to plead that in December 2006 a new joint venture was entered into between the deceased, the State Oil Company of Azerbaijan ('SOCAR'), and a company called Petro-Trans FZCO ('Petro-Trans'). This new joint venture, in which Vitaly was not intended to participate, envisaged the purchase of the terminal (as things eventually turned out) by the newly incorporated Carlina, in which the deceased was to 'retain', as it is puzzlingly put, a 24.5% shareholding. It is then said that SOCAR and an associated company of Petro-Trans objected to the deceased 'remaining' a shareholder. It was therefore proposed that an associate of the deceased called Avtandil Tsereteli ('Avto' 4) should hold the shares on trust for him. Avto subsequently had second thoughts about this scheme and suggested that the shares be held by Vano 'on the same basis.' The deceased is said to have fallen in with this proposal and told Vano that he was looking to him to hold the shares in Carlina 'under trust in accordance with the laws of the BVI.' It is then pleaded that Vano agreed to hold the shares 'as a bare nominee' on that basis.
The statement of claim alleges that on 29 December 2006 Krolle sold the subsidiaries which held the terminal to Carlina for US$239.1 million. It was common ground at the hearing that the price stated in the transactional documents was from start to finish US$230 million, with a further US$9 million being paid to reimburse a company referred to in the evidence as 'Argomar', which was under the control of Vitaly and which had held the terminal before it passed into the ownership of
The statement of claim goes on to plead that the alleged price (US$239.1 million) was only 75.5% of the value of the Krolle subsidiaries which were sold to Carlina. When the arithmetic is done, it turns out that the true value being attributed to the terminal in the statement of claim is about US$317 5 million. The pleading says that the difference between this figure and the passing consideration of US$239.1 million (on that basis, US$78 million) was treated as 'a contribution' made by the deceased (to what is not stated), with the deceased 'in turn accounting to Vitaly for 40% of the difference.' It is then pleaded that a similar arrangement was made in relation to the terminal's management company, with the deceased, through Vano as his nominee, holding 24.5%, SOCAR 51% and Petro-trans 24.5% in each of the two companies. The pleading claims that in the premises Vano has held the 24.5% stake 'as nominee on bare trust' for the deceased during his lifetime and after his death for the Claimants.
The pleading then alleges that the Claimants have brought substantive proceedings in Georgia seeking the transfer of the shares into their name and an account of profits wrongly obtained by Vano as trustee. It then proceeds to set out what is described as the 'Relief sought in the BVI.' Asserting that they are concerned that the Defendants may seek to deal with the shares to their prejudice, the claimants seek injunctive relief to protect those interests pending determination of the Georgian proceedings. They proceed against ACG because, it is alleged, they believe (correctly as it turns out) that it may assert a security interest in the shares. On this basis the claimants seek an injunction restraining Carlina from registering any change in the ownership of the shares and restraining Vano and ACG from dealing with them.
When the injunction was originally granted the only Defendant was Carlina, but on my insistence Vano as the registered owner of the shares and ACG as chargee were joined. Both Vano and ACG agreed to submit to the jurisdiction.
I have analysed the statement of claim at some length because it makes clear that these are ancillary proceedings, under the Black Swan 6 jurisdiction, for relief in support of the proceedings in Georgia. No substantive relief is claimed here in the BVI. Nevertheless, the claim and defences to it have been fully pleaded out and Vano and ACG have made counterclaims.
It is convenient to start by considering the summary judgment applications. The evidence for the Claimants includes an affidavit from Benjamin Marson ('Mr Marson'). He is an English solicitor who says that he has been advising the Claimants in relation to the securing of the deceased's assets. the figures are rarely precisely consistent in the materials before the Court BVIHCV 2009/399 23 March 2010
These figures 'show' nothing of the...
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