Court papers were filed with the English Court of Appeal in February and March 2025, seeking to appeal the High Court’s 17 January 2025 judgment on the preliminary challenges brought by the Defendants.
The High Court found that there was a strong case that some (but not all) Defendants conspired to use unlawful means – including threats and bribery – to take control of the Russian port operator, FESCO, ownership of which was ultimately passed to ROSATOM (the Russian State-owned atomic energy company). The finding was made against ROSATOM itself, as well as against the corporate raiders who supported it (Mr Rabinovich and Mr Severilov), and two former managers of Mr Magomedov’s assets and FESCO Board members (Ms Mammad Zade and Mr Kuzovkov). The Court also found that Mr Kuzovkov had arguably received a USD20m bribe from the corporate raiders.
The High Court did not, however, agree that the English Courts should decide the claims, indicating instead that the most appropriate place would be Cyprus. The question of where the claims will proceed is now subject to the application to the English Court of Appeal, which seeks to challenge this, along with other aspects of the High Court’s judgment.
The papers filed with the Court of Appeal say that the High Court wrongly took a siloed approach to the different components of the conspiracy instead of considering how they fitted together, leading to findings against some conspirators and not others. The Court, it is said, applied the wrong legal test for the relevant English law tort, and did not consider what could be inferred regarding the actions and participation of certain Defendants. For example, while finding that the corporate raiders were party to the conspiracy, it disregarded evidence that a representative of DP World, which stood to benefit via a joint venture with ROSATOM, attended a key meeting and was a director of a corporate vehicle the raiders used.
The Court also wrongly drew conclusions on issues, rather than simply ensuring that the claims were not frivolous or vexatious (the applicable test at this stage). In dismissing the claims, the Court also appeared to be influenced by the strains the case would put on Court resources, which is not a valid consideration.
Importantly, the Court noted that, had a sufficiently strong case been made against TPG (the US-based asset manager) or Mr Garber (another former FESCO Board member and associate of Mr Magomedov), it would have likely allowed the claims to proceed in England. However, in dismissing the claims against TPG and Mr Garber, the Court relied on inconsistent factual findings, and conclusions ordinarily reserved for trial (after disclosure of documents and examination of witnesses).
In relation to another set of claims concerning NCSP (the owner of Novorossiysk Commercial Sea Port), the Court concluded that there was a good case that the Russian state pipeline company, Transneft, had made an unlawful threat which resulted in it acquiring Mr Magomedov’s interest. Despite that, the Court rejected the case against Transneft based on Russian law limitation issues, and late factual evidence from Transneft. This was the wrong approach because Russian law limitation issues should not have been determined at this preliminary stage, and the Court misinterpreted the late evidence served by Transneft.
The Court of Appeal is considering the application for permission to appeal. The Court of Appeal has previously given permission to appeal on other aspects of the conspiracy as alleged by the Claimants.