In a ruling that was issued recently by Mr Justice Denis McDonald of the Commercial Court, JSC Khimaktninvest (Kai) was unsuccessful in its attempt to dispute an order allowing them to be included as a defendant in an alleged €2 billion conspiracy-to-defraud action that involves sanctioned Russian oligarch Dmitry Mazepin. This case was brought in 2016 by four Caribbean-registered firms, who claim that they were defrauded of their shares in a Russian ammonia production company, Togliattiazot (ToAZ).
It is alleged that a ‘corporate raider’ acquired a minority stake in the company before taking illegal steps to gain control of it. The plaintiffs have accused Dmitry Mazepin, another Russian ammonia producer called United Chemical Company Uralchem (UCCU), which Mr Mazepin supposedly controls, and a number of additional companies and people. These others are thought to have assisted Mazepin or acted in accord with him to harm the interests of the plaintiffs. Among these is Eurotoaz, a Dublin registered firm, also allegedly controlled by Mr Mazepin.
Eurotoaz stands accused of engaging in vexatious and false litigation in Russia to deprive the plaintiff companies of their shareholding in ToAZ. All defendants deny the claims, which include conspiracy to defraud the plaintiffs through illegal and corrupt actions. Previously, the High Court refused a challenge by the Mazepin/UCCU defendants to the jurisdiction of the Irish courts to handle the case, and an appeal is pending on that decision.
Kai attempted to have themselves taken out of the case, claiming that the plaintiffs were ‘forum shopping’ and trying to relitigate issues that had already been unsuccessfully litigated in Russia. However, Mr Justice McDonald found that the plaintiffs had established a good arguable case for the alleged conspiracy, and that the acquisition of the shares by Kai represented the completion of the alleged scheme of conspiracy.
Mr Justice McDonald also noted that, while the majority of the factors seemed to indicate Russia as the appropriate forum, the countervailing factors still weighed in favour of Irish jurisdiction in regard to the claim against Kai. These included the possibility of fragmentation of the conspiracy claim if the case against Kai could not be made in the same set of proceedings. Ultimately, he concluded that the plaintiffs had established a good arguable basis for their case, and that Irish jurisdiction was the appropriate forum.
