News & Views

Success for Sherrards’ client defending $300m lawsuit in Record-Breaking Trial


High Court Judge, Mrs Justice Moulder, has recently given Judgment dismissing a claim brought against Sherrards’ client, Mr Pavlo Ovcharenko, and his co-defendants in a claim brought by Russian oil giant, PJSC Tatneft, following a 12-week trial.  This was the largest virtual, fully-remote trial ever to take place in the history of the Commercial Court, High Courts of Justice.

Moulder J. presided over a virtual court which saw witnesses and experts provide testimony from locations across Russia, Ukraine, the UK, France and the States.  Much of the evidence was given in Russian with a leading team of interpreters, located in London at the new International Arbitration Centre, providing a simultaneous Russian and English translation.

This was a logistical feat, navigating through a major trial at the height of a pandemic, with each of the different jurisdictions facing different levels of lockdown.  Paul Marmor, the Head of Litigation, at Sherrards operating from London comments: “We embraced cutting-edge technology and new trial techniques on a scale which had never been attempted before, added to which we had one of our teams operating in Paris during one of France’s most severe lockdown, working with our counterparts in Ukraine.  There was nothing remotely routine about this highly complex, multi-party and multi-jurisdictional case.”

The case itself concerned a claim by Tatneft, one of Russia’s largest oil companies, alleging that that the defendants have siphoned proceeds in excess of $300m from the sale of oil away from one of Ukraine’s leading oil refineries located in Kremenchuk, Ukraine.

The proceedings were conducted entirely under Russian Law pursuant to Article 1064 of the Russian Civil Code, and the Judgment provides significant guidance as to the application of the limitation period for tortious claims provided by Article 200(1) of the Russian Civil Code and, in particular, as to the meaning of “harm” in Article 1064 RTC, the General Provisions on Tort.

Moulder J. concluded that the claim was time-barred in an extensive Judgment running to more than 150 pages, in which found that “All four witnesses called for Tatneft on limitation [were found to be] evasive, unreliable and in some instances likely to be not telling the truth”.  The Judge also had concerns over Tatneft’s failure to adduce evidence from a number of individuals and to preserve relevant electronic documents.  Mr Ovcharenko has been awarded his legal costs to be paid by Tatneft on an indemnity basis which is the highest scale possible in his favour.  

In other aspects of the case at an interlocutory hearing which took place in the run up to the trial in PJSC Tatneft -v- Bogolyubov and Others [2020] EWHC 2437 (COMM), Moulder J, held the legal privilege extends to communications with foreign lawyers, whether or not they are “in-house”, provided they are acting in the capacity or function of a lawyer.  There is no additional requirement that foreign lawyers should be “appropriately qualified” or recognised or regulated as “professional lawyers”.

Marcus Staff of Counsel of 24 Old Buildings, instructed by Sherrards, states: “Engaging in cross-examination of numerous witnesses in a fraud trial and doing so remotely in a virtual set-up was a first and, indeed, unique experience and this was a ground-breaking trial in so many respects.”

Marta Grieve, Head of Sherrards’ Russia and CIS Desk, comments: “The Russian legal issues were paramount and there is no doubt that being based in Paris during the heart of the French lockdown, working in Russian, Ukrainian, English and French, did have its challenges on occasion but I was pleased to be able to deploy all my Russian and Ukrainian legal experience to good effect.”

Paul Marmor adds: “This was a truly multi-jurisdictional, multi-party and multi- layered case, quite unlike anything else I have ever been involved in working under Russian Law.  Witnesses giving evidence in real time in locations such as Moscow, Kazan, Kyiv, Paris, London and Washington DC, and to do so while we were in lockdown, meant everyone had to be at the top of their game.  We are delighted with the result for our client.”

Sherrards’ team comprised Paul Marmor, Marta Grieve, Emma Anderson and Maximillian Marmor alongside Marcus Staff of 24 Old Buildings.

Click here to read the full Judgment.