It has been reported on FESCO’s website that a company associated with Mr Ziyavudin Magomedov withdrew its defence in London Court of International Arbitration proceedings between that company and a subsidiary of FESCO.
The proceedings referred to by FESCO were an LCIA arbitration by a subsidiary of FESCO, called Halimeda, against a company owned by Mr Magomedov (Maple Ridge). In those proceedings, Halimeda sought to enforce certain loans which originated from the acquisition of a stake in FESCO by Mr Magomedov in 2012. Maple Ridge disputed the enforcement of the loans on grounds that the enforcement of those loans by Halimeda (and related actions) formed part of an unlawful means conspiracy to seize control of FESCO and other interests. The conspiracy case is central to the claims pursued by Mr Magomedov and his companies in proceedings currently taking place in the High Court in England against, amongst others, TPG, Rosatom and DP World, as well as Halimeda and FESCO. Mr Magomedov claims damages of well over US$10 billion in those proceedings.
The Defence in the arbitration has been withdrawn in favour of pursuing that claim in the High Court where full disclosure from the alleged conspirators and others can be pursued. The High Court claim is unaffected by the withdrawal from the arbitration. The quantum of the High Court claim is primarily based upon the value of FESCO, meaning that it will reflect a large part of any debt recovery from Maple Ridge.
The English High Court has found that there is a good arguable case of conspiracy against at least some of the alleged conspirators, including ROSATOM, and that there was an evidential basis that they were coordinating, that a ‘hostile takeover’ of FESCO was threatened, and that this was accompanied by menacing behaviour. The Defendants to the English proceedings have challenged jurisdiction and/or sought to strike out the claims in order to avoid any determination on the merits by the English Court. Mr Magomedov is determined to seek a fair hearing of his claims in London.
Judgment is awaited in relation to those jurisdiction challenges.