VTB Bank (Public Joint Stock Company) v Miccros Group Ltd

• Jurisdiction: British Virgin Islands
• Judge: Jack, J
• Judgment Date: 23 January 2020
• Judgment citation (vLex): [2020] ECSC J0123-1
• Docket Number: Claim No: BVIHC (COM) 2018/0067
• Court: High Court (British Virgin Islands)
• Date: 23 January 2020

[2020] ECSC J0123-1

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(COMMERCIAL DIVISION)

Claim No: BVIHC (COM) 2018/0067

Between:

VTB Bank (Public Joint Stock Company)

Claimant

and

[1] Miccros Group Ltd

[2] Taurus Ltd

Defendants

Appearances:

Mr. Tim Penny QC and Mr. Brian Lacy of Ogier for the claimant

Mr. David Lord QC, Mr. Sebastian Kokelaar and Ms. Sara-Jane Knock of Withers BVI for the second defendant

The first defendant did not appear

1 Jack, J [Ag.]: On 22 ^nd April 2015 VTB issued proceedings 1 in this Court against Mr. Skurikhin to recover sums due under guarantees given by him of the debts of SAHO. On 30 ^th May 2017, VTB obtained judgment 2 by default against Mr. Skurikhin for 1,388,387,737.29 roubles (about US$22 million). The current

proceedings for the appointment of an equitable receiver are in support of execution of this judgment debt, not as a form of execution in itself

2 It is convenient to list the various short forms I shall use in this matter.

Accreda: a group of companies controlled by Mr. Meier, which provides off-shore financial structures and advice; subsidiaries include Accreda Trustees Ltd, the trustee of Olympic and Eastbridge;

Berenger: the Berenger Foundation, a Liechtenstein Stiftung, incorporated on 12 ^th January 2005 (it is said) for the benefit of Mr. Skurikhin;

The Bologna property: one of the Italian properties, purportedly held on a usufruct (life interest) in favour of Mr. Meier;

The Butcher judgment: the judgment 3 of Mr. Christopher Butcher QC (now Butcher J) sitting as a deputy judge of the English High Court (Commercial Court) handed down on 21 ^st July 2015 in the English proceedings;

The BVI judgment debt: the judgment against Mr. Skurikhin granted by this Court on 30 ^th May 2017 for 1,388,3897,737.29 Russian roubles (about US$22 million);

Crown: Crown Capital Holdings Ltd, a Hong Kong company which held the bulk of the member interests in Pikeville on trust for Berenger;

Eastbridge: the Eastbridge Settlement, a discretionary trust established under the law of Nevis on 2 ^nd February 2005, purportedly for the benefit of five executives of SAHO and Unidos (Unidos was removed as a beneficiary on 14 ^th May 2007); Accreda Trustees Ltd is the trustee;

The English proceedings: JSC VTB Bank v Skurikhin 4 in the Business and Property Courts of England and Wales (Commercial Court);

Mr. Hanselmann: Mr. Urs Hanselmann, an associate of Dr. Schurti and a board member of Berenger;

The Italian properties: Viale Tiziano 14, Cervia, Milano Marittima (a luxury property used by Mr. Skurikhin and his family); Via Gabara 3, Bologna (the Bologna property, another luxury property used by

Mr. Skurikhin and his family); and Via Lagune 9, Sasso Marconi (an empty plot of land);

Mr. Lerch: Mr. Beat Lerch, an associate of Mr. Meier; holder of a small interest in the membership of Pikeville;

Mr. Meier: Mr. Zeno Meier, said to be Mr. Skurikhin's right hand man and a key figure in the corporate and trust structures which feature in this case; holder of a small interest in the membership of Pikeville;

Miccros: the first defendant, Miccros Group Ltd, a BVI company, said to be a creditor of Pikeville; it has one issued share, originally a bearer share, but converted in 2009 into a registered share;

The Milano Marittimo property: one of the Italian properties, purportedly subject to a usufruct (life interest) in favour of Mr. Meier;

Olympic: the Olympic Settlement, a Nevis discretionary trust, established on 2 ^nd February 2005, a beneficiary of Berenger;

Pikeville: Pikeville Investments LLP, an English limited liability partnership, the members of which are Mr. Meier, Mr. Lerch and Crown; it was incorporated on 10 ^th December 2002 and holds the Italian properties; on 10 ^th June 2005 the membership interests in it were declared to held on trust for Berenger absolutely;

The Robertson judgment: the judgment 5 of Ms. Patricia Robertson QC sitting as a deputy judge of the English High Court (Commercial Court) handed down on 12 ^th June 2019 in the English proceedings;

The Russian judgments: about twenty-five judgments obtained by VTB in the Russian courts against SAHO and Mr. Skurikhin, as guarantor of SAHO's obligations to VTB for a total of about 2.12 billion Russian roubles (some of which may have been satisfied);

SAHO: a group of Russian companies active largely in the Russian agricultural sector, founded by Mr. Skurikhin;

Dr Schurti: Dr Andreas Schurti, a Liechtenstein lawyer and member of the board of Berenger;

Mr. Skurikhin: Pavel Valerjevich Skurikhin, a Russian businessman who founded SAHO and served as its chairman and apparent chief executive officer; said to be a fraudster;

Taurus: the second defendant, Taurus Ltd, an Anguillan company, which holds the sole issued share in Miccros, a share (it is said) held as to 55 per cent for Berenger and as to 45 per cent for Eastbridge;

Unidos: Unidos del Puento SA, a company incorporated in Costa Rica and sometime beneficiary of Eastbridge and Olympic;

VTB: the claimant, VTB Bank (public joint stock company), the second largest bank in Russia, majority owned by Russian state.

Procedural overview

3 After VTB obtained the BVI judgment debt against Mr. Skurikhin, it issued on 10 ^th May 2018 the current application for the appointment of an interim receiver over the single issued share in Miccros. Miccros is said to have lent Pikeville some €19 million for the purchase of the Italian properties. (Whether it did lend this money or not is not clear: Dr Schurti says that it did, but there is no documentary evidence of the loan.) By an order dated 21 ^st July 2015 of Mr. Christopher Butcher QC, sitting as a deputy High Court judge in England, equitable receivers were appointed in England over the interest of members in Pikeville: see the Butcher judgment. These receivers in turn, by order of Mann J of 6 ^th August 2015, have been appointed administrators of Pikeville. An application made to the English Commercial Court to discharge the appointment of the receivers was refused on 12 ^th June 2019: see the Robertson judgment.

4 Steps have been taken by Pikeville's administrators to obtain possession of the Italian properties in the face of grave difficulties. For example, in relation to the Milano Maritimo property, the Italian court bailiff attended on 4 ^th October 2018 to take possession. On that date lawyers for Mr. Skurikhin served a Court application actually on the doorstep of the house seeking deferment of the taking of possession. In consequence, the bailiff adjourned taking possession until 3 ^rd December 2018. As Stephen Katz, one of the administrators of Pikeville, explained:

“[41] I again attended with Mr. Meier's lawyers on 3 ^rd December 2018. It became apparent on gaining access to the premises that Mr. Skurikhin had, in full knowledge of the attendance, allowed an acquaintance of his who is recovering from a stroke and his carer to move into the property on 29 ^th November 2018. The acquaintance was claiming that he was not medically fit to move and that he could not return to his home as he was in the middle of divorce proceedings.”

5 Eventually a doctor confirmed that the acquaintance was medically fit to move. The acquaintance (despite his allegedly grave health problems) threatened the bailiff with violence, but was deterred by the attendance of the local police. Sales of the Italian properties are imminent.

6 In this jurisdiction, on 30 ^th May 2018 Wallbank J appointed Mr. Mark McDonald of Grant Thornton BVI ex parte as interim receiver of the share in Miccros. On 20 ^th June 2018 VTB issued an application for an extension of the interim receivership. On 22 ^nd June 2018, Taurus issued a cross-application seeking to be joined as an additional defendant and for the discharge of the interim receivership. Taurus was added as an additional defendant by order of 25 ^th June 2018, but the cross-application for extension and discharge of the interim receivership was adjourned. Due to counsel's unavailability, these adjourned applications only came before me for a two day hearing in December 2019. It is these adjourned applications which I now determine.

The short answer

7 There is a short answer to the application to extend the equitable receivership. The type of equitable receivership sought by VTB is a mere protective measure, designed to preserve assets. It is usually sought as an enhanced form of freezing order. Such measures are intended to be temporary. Like freezing orders, they are often sought before judgment has been obtained.

8 In the current case, VTB have recovered a very substantial judgment against Mr. Skurikhin in this jurisdiction. The share in Miccros is, VTB say, an asset of Mr. Skurikhin against which execution can issue. Under the Judgments Acts 1838 and 1840 (UK), VTB can seek a charging order over the share: see the discussion below. That is a straightforward remedy, which is much cheaper than the appointment of a receiver: see below para [23]. VTB say that they are concerned that in the period between the making of an interim charging order and a final charging order there is a risk that Mr. Skurikhin and his proxies will attempt to interfere with the sale by Pikeville' administrators of the Italian properties. This appears to be a real risk. Ms. Tatiana Menshenina, an English solicitor and a partner in Withers LLP, who act for Berenger in the English proceedings, says 6 that “Miccros could, if it so wished, use this control [as the largest creditor of Pikeville, owed some €21,748,943.14] to pass a resolution at a creditors' meeting requiring the administrators to apply to the English court for an order terminating their appointment.” This risk can, however, be easily dealt with by a very limited form of freezing injunction, preventing any such interference. (For completeness, I should add that Mr. Lord QC, leading counsel for Taurus, disputed that it...