Renova Industries Ltd v Emmerson International Corporation

• Jurisdiction: British Virgin Islands
• Judge: Wallbank, J.
• Judgment Date: 08 February 2021
• Judgment citation (vLex): [2021] ECSC J0208-1
• Docket Number: CLAIM NO. BVIHCM 2013/00160
• Court: High Court (British Virgin Islands)
• Date: 08 February 2021

[2021] ECSC J0208-1

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

COMMERCIAL DIVISION

CLAIM NO. BVIHCM 2013/00160

By way of Claim:

Between:

[1] Renova Industries Limited

[2] Wedgwood Management Limited

[3] Zapanco Limited

[4] Lamesa Holding SA

Claimants

and

[1] Emmerson International Corporation

Applicant

[2] Mikhail Abyzov

Applicant

[3] Romos Limited

[4] Fresko Financial Limited

Defendants

And by way of Counterclaim:

[1] Emmerson International Corporation

Applicant

[2] Andrey Titarenko

Claimants by way of Counterclaim

and

[1] Renova Industries Ltd

[2] Wedgwood Management Limited

[3] Zapanco Limited

[4] Lamesa Holding SA

[5] Viktor Vekselberg

Respondent

[6] Integrated Energy Systems Limited (a company incorporated under the laws of Belize)

[7] Odvin Financial Inc

[8] Gothelia Management Limited

Respondent

[9] Renova Holding Limited

[10] Vladimir Kuznetsov

[11] Alexei Moskov

[12] Alexander Kolychev

[13] Mikhail Slobodin

[14] Maksim Mayorets

[15] Renova Management AG

[16] Pao T Plus

[17] Integrated Energy Systems Limited (a company incorporated under the laws of Cyprus)

Respondent

[18] Clern Holdings Limited

[19] Starlex Company Limited

[20] Sunglet International Inc

[21] OOO Renova-Holding Rus

Defendants by way of Counterclaim

And by way of Ancillary Claim:

[1] Mikhail Abyzov

Applicant

[2] Romos Limited

[3] Fresko Financial Limited

[4] Andrey Titarenko

[5] Goldfort Limited

Claimants by way of Ancillary Claim

and

[1] Renova Industries Ltd

[2] Wedgwood Management Limited

[3] Zapanco Limited

[4] Lamesa Holding SA

[5] Viktor Vekselberg

Respondent

[6] Integrated Energy Systems Limited (a company incorporated under the laws of Belize)

[7] Odvin Financial Inc

[8] Flopsy Overseas Limited

[9] Vladimir Kuznetsov

[10] Alexei Moskov

[11] Alexander Kolychev

[12] Mikhail Slobodin

[13] Renova Management AG

[14] Renova Holding Limited

[15] Pao T Plus

[16] Integrated Energy Systems Limited (a company incorporated under the laws of Cyprus)

Respondent

[17] Clern Holdings Limited

[18] Maksim Mayorets

Defendants by way of Ancillary Claim

And by way of Third Ancillary Claim:

[1] Emmerson International Corporation

Applicant Claimant by way of Third Ancillary Claim

and

[1] Viktor Vekselberg

Respondent

[2] Integrated Energy Systems Limited

Respondent

[3] Vladimir Kuznetsov

[4] Evgeny Olkhovik

[5] Andrey Burenin

[6] Yakov Tesis

[7] Alexei Moskov

[8] Igor Cheremikin

[9] Irina Matveeva

[10] Pavlina Tsirides

[11] Irina Loutchina Skittides

[12] Photini Panayiotou

[13] Artemis Aristeidou

[14] A.B.C. Grandeservus Limited

[15] Starlex Company Limited

[16] Renova Industries Limited

[17] Sunglet International Inc.

Applicants Defendants by way of Third Ancillary Claim

Appearances:

Mr. Philip Marshall, QC with him Mr. Robert Weekes, Mr. Ajay Ratan, Mr. Oliver Clifton, Ms. Colleen Farrington and Mr. Renell Benjamin for the Applicants

Mr. Simon Birt, QC with him, Miss. Arabella di Iorio, Mr. Michael Bolding and Mr. Shane Quinn for the Respondents.

1 Wallbank, J. (Ag.): On 9th October 2020 Emmerson International Corporation (‘Emmerson’) and Mr. Mikhail Abyzov (‘Mr. Abyzov’), together ‘the Applicants’, filed an application for an anti-suit injunction against three respondents that are party to this litigation: Mr. Viktor Vekselberg (‘Mr. Vekselberg’), Gothelia Management Limited (‘Gothelia’) and Integrated Energy Systems Limited (‘IES Cyprus’) (together ‘the Respondents’). Entities associated with Mr. Vekselberg shall here for convenience be referred to as ‘Vekselberg Parties’. This is the Court's ruling on that application. For the reasons given below, the application fails.

Introduction

2 The orders sought were that:

• (1) Gothelia and IES Cyprus discontinue proceedings commenced on 26 ^th March 2020 by Gothelia, IES Cyprus, and companies called Brookweed Trading Limited (‘Brookweed’), CJSC KES-Holding (‘KES-Holding’) and LLC T Plus Invest (‘T Plus Invest’) in Cyprus;

• (2) Mr. Vekselberg should cause Brookweed, KES-Holding and T Plus Invest to discontinue the Cyprus proceedings;

• (3) Gothelia, IES Cyprus and Mr. Vekselberg shall not, without leave of the court of this Territory of the Virgin Islands (‘BVI’), commence or continue to take any steps in proceedings in any other court or tribunal other than in the BVI against Emmerson or Mr. Abyzov ‘in respect of any of the issues arising for determination in these BVI proceedings’.

3 The grounds for the relief sought were stated as being that:

• (1) The Respondents are amenable to the jurisdiction of this Court;

• (2) In bringing the foreign proceedings in respect of issues that are before the BVI Court, or which should properly be before the BVI Court, the Respondents have acted in a way that is vexatious and/or oppressive and/or unconscionable and it is appropriate that they be restrained by injunction in the form applied for;

• (3) It is in the interests of justice to grant the relief.

4 The evidence before the Court is comprised within: (1) the Forty-Second Affidavit of a Mr. Dodonov in support of the application; (2) the Twenty-Fourth Witness Statement of a Mr. Jeremy Andrews in opposition thereto (“ Andrews 24”); (3) the Forty-Third Affidavit of Mr. Dodonov, and the exhibits thereto.

THE APPLICANTS' ARGUMENTS

5 The Applicants submitted the following. I here very largely set out the Applicants' written submissions in their own words because it is important to note how they put their case and also, and in particular, what they do not say. I do so also to indicate that I have taken all these matters into account, which I have, even though I might not address all of them in the discussion section below. Those that I do not address are not, in my view, determinative. The Applicants' oral submissions largely followed their written submissions, but with some additional arguments and adjustments.

6 To assist the reader in navigating this judgment, the Applicants' submissions are set out (using their own headings and sub-headings) as follows:

Topic	Paragraphs
Summary	[8] to [9]
A. Background	[10] to [13]
B. Legal Framework	[14] to [19]
C. Necessity for Relief to protect Court's processes, jurisdiction and judgment
1. Conflict with Receivership Order
(i) Interference with the performance of a receiver's functions is a contempt	[20] to [24]
(ii) Conflict with Receivership Order	[25] to [30]
(iii) Respondents' knowledge of the conflict	[31]
2. Impermissible collateral attack on valid and subsisting BVI judgments and orders	[32] to [36]
D. Vexation and Oppression
1. Cyprus Proceedings are being prosecuted in breach of Mr Vekselberg's assurance to this Court
(i) Mr Vekselberg's assurance	[37] to [40]
(ii) Mr Vekselberg's control of the Cyprus Claimants	[41] to [42]
(iii) Role of Mr Cheremikin	[43]
(iv) Mr Vekselberg's assurance was given in bad faith	[44] to [45]
2. The claims made in the Cyprus Proceedings are hopeless	[46]
3. The matters raised are issues for the BVI Court	[47] to [50]
4. The Cyprus WFO is vexatious and oppressive	[51]
(i) It has extra-territorial effect	[52]
(ii) It lacks protective provisions	[53] to [54]
E. Discretion	[55] to [58]
F. Appropriate Terms of Relief	[59] to [63]

7 The Respondents' submissions are set out at [64] to [74] and the discussion section runs from [75] to [123].

Applicants' Arguments: Summary

8 Mr. Vekselberg has caused Gothelia and IES Cyprus (as well as three other companies which are also under his control, namely, Brookweed, KES-Holding and T Plus Invest, but not party to this action, collectively, the ‘Cyprus Claimants’) to bring proceedings against Emmerson, Mr. Abyzov and a Mr. Titarenko in the District Court of Limassol in Cyprus (the ‘Cyprus Proceedings’). Those proceedings are vexatious and oppressive and they amount to a serious interference with the integrity of this Court's processes and judgments. This is in particular and in summary because:

• (1) The subject matter of the Cypriot Proceedings is (i) the conduct of the claims by the Applicants and Mr. Titarenko in this action before the BVI Court; and (ii) orders made by this Court in this action.

• (2) The Cyprus Proceedings have nothing whatsoever to do with Cyprus. Rather, they are concerned with this action in the BVI. There is no proper basis for the Cypriot Court having any jurisdiction.

• (3) The Cyprus Proceedings are a collateral attack upon orders made by this Court.

• (4) In the Cyprus Proceedings, the Cyprus Claimants have obtained an ex parte worldwide freezing order against the Applicants and Mr. Titarenko in respect of assets up to a value of EUR 436 million (the ‘Cyprus WFO’ or ‘WFO’). The order is vexatious and oppressive in at least seven respects:

  • (a) First, it is in conflict with the receivership order made by this Court in respect of Emmerson's business and assets on 23 ^rd September 2019 (the ‘Receivership Order’);

  • (b) Second, the Cyprus Claimants have exploited weaknesses in the procedure for WFO relief so as to maximise oppression. Thus, the Cyprus WFO does not include any of the basic and fundamental safeguards which would be included in a freezing order made by this Court (or indeed an English court). Thus, it does not include, for example, any provision in respect of the legal expenses of Emmerson or Mr. Abyzov, any cross-undertaking in damages in favour of them, or even any provision for them to make an application to discharge or vary the injunction.

  • (c) Third, it is a freezing order, made in respect of these BVI proceedings, which there is no prospect that this Court would ever have been prepared to make, nor has ever been asked to make (indeed this Court has granted freezing orders against Mr. Vekselberg and companies associated with him and has never been asked by Mr. Vekselberg or those companies to grant any such relief against Emmerson,...