Forum shopping takes a knock

Forum shopping in the English courts by foreign nationals has been dealt a blow after the High Court refused to allow Russian oil producer Yugraneft to bring a claim against Roman Abramovich, Russian billionaire, second richest person living in the United Kingdom and owner of Chelsea Football Club.

The case concerned an ownership dispute over a joint venture to develop Siberian oil fields.
Russian oil company Yugraneft, a subsidiary of Sibir Energy, brought a claim alleging Abramovich, Millhouse Capital UK Ltd and Boris Berezovsky, acted fraudulently by reducing its percentage interest in the venture from 50% to one per cent, and sought billions of dollars in losses.

However, Mr Justice Christopher Clarke ruled last week in Abramovich’s favour, setting aside the dispute and ruling Yugraneft had failed to prove grounds for serving Abramovich with court documents outside Russia.
Christopher Clarke J also set aside the appointment of a Yugraneft liquidator in the UK—the High Court had appointed a provisional liquidator in England and Wales for Yugraneft in November 2007. However, Yugraneft was already in liquidation in Russia when the court documents were filed.
According to Adrian Lifely, partner and head of international arbitration at Osborne Clarke, the decision “will allay fears of a flood of Russian claims hitting the high court” post Cherney v Deripaska.

In Cherney, the high court allowed a hearing involving two prominent Russian businessmen, the Russian aluminium industry and an alleged assassination attempt to go ahead on the basis a fair trial would not otherwise be possible.

“Jurisdiction is a big issue and an unquestioned barrier to entry into the jurisdiction of the English courts,” Lifely says.“The Abramovich judgment means any potential claims targeted at high profile Russian ‘Oligarchs’ in the English High Court must be carefully considered from a jurisdiction point of view before proceeding.
“For extremely wealthy foreign individuals who own property in England (among other countries), the court will not simply operate a ‘numbers game’ approach to their residency for the purposes of an action. The English court will look at the ‘quality’ of the stay at the property.”