The High Court has refused an application by a Russian company known as Kai to set aside permission for the plaintiffs in a long-running dispute over Russian chemical producer Togliattiazot (ToAZ) to serve it with proceedings in Russia.
Mr Justice Denis McDonald ruled on 24 April 2023 that the plaintiffs had shown a good arguable case that Kai was a proper party to their Irish action and that Ireland was the appropriate forum for the claim against it. The decision concerns jurisdiction and service, not the merits of the alleged conspiracy or the plaintiffs’ claim to recover shares.
The plaintiffs allege that the defendants conspired to take their ToAZ shares and place them under the control of Dmitry Mazepin or a company he controls. They say Kai, which bought shares at an auction in February 2022, is part of that alleged scheme. The defendants deny wrongdoing. The judge stressed that he could not determine the competing accounts on the affidavit evidence before him; the allegations would require a full trial.
Kai argued that the plaintiffs had already pursued proceedings in Russia, where courts upheld the criminal convictions and damages award arising from proceedings against ToAZ interests and rejected challenges concerning the shares and their sale. It said the plaintiffs were trying to relitigate issues decided there, and that comity and the Russian connection of the events favoured a Russian forum. Kai also argued that the plaintiffs’ description of themselves had changed: they now said they held the shares as trust managers rather than owners, without identifying the underlying owners.
The judge accepted that most relevant events, witnesses and documents were in Russia and that Russian law and procedure would feature heavily. But he concluded that the balance still favoured Ireland. Kai now holds the shares, and its absence from the Irish case could prevent the plaintiffs from securing an order for their return even if they succeeded against the other defendants. Keeping the alleged co-conspirators in one case also avoided fragmenting the claim. The judge further considered that key witnesses might not be able to travel to Russia and that discovery and cross-examination there would be limited.
On the trust-management issue, the judge found that expert evidence for the plaintiffs provided a plausible basis for their argument that Russian law allowed them to pursue the claims in that capacity. He did not resolve the conflicting expert opinions or decide the plaintiffs’ ultimate entitlement to relief. He also left open whether decisions of the Russian courts could later support an issue-estoppel defence or otherwise limit the Irish case.
The court dismissed Kai’s application under Order 12, rule 26, leaving in place the earlier order permitting service of the amended summons at Kai’s registered address in Moscow. The judge listed the case for a further hearing on costs and related matters on 3 May 2023.