The High Court has refused a request for a separate, preliminary trial on whether Alexandr Vakiy remained a member of Maxela Limited and EastDeli Limited. Mr Justice Rory Mulcahy ruled that the standing issue might not be fairly decided apart from the wider dispute between Mr Vakiy and Max Bulgakov.
Mr Vakiy brought proceedings under section 212 of the Companies Act 2014, alleging that the affairs of the two companies were conducted oppressively or in disregard of his interests as a member. Mr Bulgakov denies those allegations and says Mr Vakiy transferred his interests to Corex Emerald Limited in 2021, leaving him without standing to pursue the claim. Mr Vakiy denies that the transfer was completed.
The judgment addressed only Mr Bulgakov’s motion for a modular trial. The court did not decide whether the shares were transferred, whether Mr Vakiy is a member, or whether the alleged oppressive conduct occurred. The judge said the background described in the ruling was not a final determination of disputed facts.
Mr Bulgakov argued that a short trial on standing could save time and costs if the issue were decided in his favour. Mr Vakiy opposed separating it, saying evidence relevant to the rest of the case would also matter to standing. He also argued that the motion was an abuse of process because Mr Bulgakov had earlier abandoned a motion to strike out the claim. The judge rejected the abuse argument, finding that abandoning the earlier motion did not prevent Mr Bulgakov from pursuing the standing issue in the substantive proceedings.
In refusing a separate trial, the judge said the evidence about the circumstances of the purported transfer, the parties’ conduct afterwards and the wider allegations could be relevant to standing and to Mr Vakiy’s estoppel argument. Assessing the transfer dispute in isolation could also prejudice Mr Vakiy if the respondent’s credibility were considered apart from the wider evidence. The judge accepted that a separate module might save time and costs if standing could be separated, but concluded it was not appropriate here.
The standing question will still have to be addressed in the proceedings. The judge encouraged the parties to reconsider mediation, noting that their ongoing relationship would need attention regardless of the case’s outcome and that costs consequences could follow if they failed to engage. The court refused the orders sought in the 31 July 2024 motion and listed the matter for mention to address costs and further directions. The judgment gives that listing date as 28 January 2024.