The High Court has ordered ten companies to be added as plaintiffs to a commercial case over shares in Russian chemical producer Togliattiazot (ToAZ), while adjourning a decision on proposed changes to the pleadings until the plaintiffs revise their draft documents to set out the Russian law they rely on.
In a judgment delivered on 5 May 2023, Mr Justice Denis McDonald allowed joinder under Order 15, rule 13 of the Rules of the Superior Courts. He refused the applications under Order 15, rule 8 and Order 17, rule 4. The court did not determine the ownership dispute, the merits of the alleged conspiracy, or whether any claim by the new plaintiffs is time-barred.
The existing plaintiffs allege that the defendants conspired to take control of ToAZ and its shares. They say the shares were sold to the twelfth defendant through steps in Russian bankruptcy proceedings and that the sale was unlawful. The defendants dispute those allegations and have made separate allegations of wrongful conduct by the plaintiffs, which the plaintiffs deny.
The proposed plaintiffs are ten companies: two incorporated in Cyprus, one in Switzerland and seven in Tortola in the British Virgin Islands. The existing plaintiffs had previously described themselves in their pleadings as owners of the shares. The proposed amendments would instead describe them as trust managers and the new plaintiffs as owners and settlors under trust management agreements.
The parties relied on conflicting Russian law expert opinions about ownership, the effect of the share sale and the parties’ standing. The judge said the joinder application was not a trial of those disputes. He found a prima facie case that the proposed plaintiffs owned the shares under Russian law, or did so until their transfer to the twelfth defendant, and had standing to pursue the claims. He also found joinder may be necessary because the existing plaintiffs might be found to have lost standing after the sale. These were preliminary conclusions for the procedural application, not final findings on title or liability.
The judge said the new plaintiffs’ joinder under Order 15, rule 13 does not relate back to when the case began in 2016. Defendants may raise any limitation defence in due course; the judgment did not decide whether such a defence would succeed.
The requested amendments remain unresolved. The plaintiffs must prepare revised drafts pleading the material elements of Russian law on which they rely and the effect they say that law has, and explain trust management and the existing plaintiffs’ role. The judge also directed them to address the representative-capacity endorsement rule if it applies. Costs and the form of the orders were due to be addressed at a further hearing on 18 May 2023.