The High Court has ordered limited discovery in a dispute over claims that a group of companies was targeted in an alleged scheme to deprive them of shares and dividends in Russian chemicals producer ToAZ.
Mr Justice David Barniville’s ruling concerns two discovery applications between the plaintiffs and Eurotoaz Limited and its director, Andrey Gennadyevich Babichev. The judgment, delivered on 31 July 2019, does not decide whether the alleged scheme occurred. The defendants deny wrongdoing and say their actions were bona fide efforts to establish Eurotoaz’s claimed shareholder rights.
The plaintiffs allege that the defendants acted together to benefit Dmitry Mazepin and companies associated with him. They say Eurotoaz pursued civil actions, criminal complaints and regulatory complaints in Russia using false or sham evidence. Eurotoaz and Mr Babichev admit that actions and complaints were brought, but deny that they formed part of a scheme or were wrongful.
The judge ordered the defendants to disclose documents relevant to whether those Russian actions and complaints formed part of the alleged scheme, including communications with other defendants and records of Eurotoaz’s motivation and purpose. He also ordered documents concerning the alleged ownership and control of Eurotoaz by Mr Mazepin, for the period from 1 January 2008 to 8 February 2018. A separate category covers communications between Eurotoaz and Mr Babichev about the Russian actions and complaints from 1 January 2011 to 8 February 2018.
The judge narrowed the plaintiffs’ requests, finding some descriptions too broad or unclear. For example, he refused to order documents about the relationship between the defendants and Eurotoaz going back to 1995, limiting that category to 2008 onwards. He said the categories had to be tied to the specific claims and issues in the pleadings.
The plaintiffs were also ordered to disclose documents relating to their alleged loss and its cause, documents showing any interest ToAZ had in Eurotoaz Hungary, and documents relating to ToAZ’s or the plaintiffs’ awareness of Eurotoaz Hungary’s liquidation or dissolution. The judge declined to require broader discovery about the plaintiffs’ or connected persons’ alleged interests in Eurotoaz Hungary, describing that request as fishing.
The ruling addressed discovery only. The judge said he would hear counsel on outstanding issues, including when the ordered discovery must be provided, and gave both sides liberty to apply if further disputes arose. A separate judgment delivered the same day dealt with the plaintiffs’ discovery application against another defendant.