Neutral Citation Number: (20171 EWHC 1968 (Comm)CL-2017-0000067

IN THE HIGH COURT OF JUSTICEQUEEN'S IiENCi~ DIVISIONCOMMERCIAL COURT

Before:

Rolls Building 7 Rolls BuildingsFetter Lane, London

Date: 28/07/2017

SIMON BRYAN QC (Sitting as a Deputy Tud~e of the High Court)

BETWEEN:RUSLAN URUSBIEVICH I3ESTOLOV

and

~ ~ ~ •

Claimant/Respondent

Defendant/~ipplicant

Rupert 'Cruz (instructed by Withers I.I. )for the Claimant

I3avicl Head QC (instructed by Kogan I,ovells Intel national I.LP) for the Defendant

Hearing date: 17 July 2017---------------------

Approve cl etI direct that pursuant to CI'R PD 39A para 6.1 no official shorthand note shall be taken of this

Judgment and that copies of this version as handed down may be treated as authentic.

1

~r~~a ~€~~~ir~r~

~._ . ,..~, ~.~r ~ ~. ~ ,a a* A i ;i n f' ~ &i ad- it7 tiir ni'i iii A~it1t~ i5a. ~t~C ~~i~iiuc`~i ~,1, '~'~;~ parti~~ a~;~~,ar ~e~~r~ t~„ ..:~~a r r ~~ i~ ,~ ~ ~,~,-- °~

~irnan ~Iiktorovich Po~varenkin, ("l~r ~'ovarenkin"j dated i i iV[arci~ 2i~17 see~Cin~ azi

order declaring that the English court declines jurisdiction and stays the claim on the

bads of foram non conveniens, in particular on the basis that Russia is the more

appropriate forum ("the Application").

2. Mr Povarenkin, a Russian citizen, was personaiiy served wi n ins ~idirl~ ~uiiii while

travelling through Ileatnrow airpo~~~ on 3 re~a~u~ry 2Ci7 ~whi~s~ i;~ ~va~ J~ a vi~i~ tv

~'~~~~n~~ r~ C;P.IP}Jt'.~tP the }~irth~9a,y of Iv[r Povarenkin's son and wife). Igo point i~ taken

on the efficacy of such service and, ~ccortiin~iy, i~r ~ovareilkin accepts iz~ai ih~

T~nglish c;ouri has jurrsdictioil strict sen.4a~ in c;onscquence.

3, ~f ~~e only basis for jurisdiction is service whilst Nlr I'ovarenkin i~ mexely present in

the jurisdiction, then it is open to Mr Povarenkin to challenge juz•isdiction on the bads

of forum r~on convenrcns. however the C laimant, itusian Uru~bievich ~sesioiov, ("Tvir

~3estoiov") su'~niits ghat there ~r~ three ~furtller bases ors tivh~ch the court his

jurisdiction in ~•e~pect o~t'the proceedings against ivlr~ ~ovar•enkin:-

(1.) l~r ~ovarenkirn i~ domiciled in ~n~land (as deFizied in paragraph 9 of ~~~edule 1

of the Civil Jurisdiction and Judgrrients O~~der 2001 SY 2001/3929 ("the CJJO")) and

as such the E~~iish court is obliged under ~.rticle 4(1) of the brussels Regulations

(recast) (Reg (~,U) ~Io 121.5/?012) (the "F~r~ussels R~gulatioi~s Recast") to accept

jurisdiction and cannot decline it as a matter oi~ discretion on f'or~~rt~ co~zveniens

grounds, as established by the ECJ in Owusac v ,Jackson (t/a VilCa .~'olzdays ~3a1 Inn

Villas) [2005] Q.~. ~Ol and affirmed in subsequent judgments of the English court

including, for example, recently in wig Royal Highn~s~ Okpabi v loyal Dutch Shell

~lC.~l;~~f~lCd;?ZE'V#Sfl~Gll ,~Ui(:~ oi"LC'~C 1~1i, i~~i~~ a~~~t~`ejiav Q(i ~rA,ria~~~9 }%iAl'il~.~',~~~'~.

ry

(2) The agreement pursuant to which Mr Bestolov brings a claim in debt against Mr

Povarenkin in the Claim Form and Particulars of Claim (seeking a sum of

US$7,535,147), namely Supplemental Agreement No. 1 dated 26 April. 2012 (as

defined below), is subject to a jurisdiction agreement in favour of the English courts

within the meaning of Article 25 of the Brussels Regulations Recast, and as such the

English court must give effect to the jurisdiction agreement and assume jurisdiction,

there being no discretion to decline jurisdiction on forum non conveniens grounds -

see IMS SA & Ors v Capital Ozl &Gas Industries [2016) EWHC 1956 (Comm), para.

[44]

(3) Supplemental Agreement No.1 is governed by English law applying Regulation

(EC) No 593/2008 on The Law Applicable to Contractual Obligations (the "Rome I

Regulation"), which would in itself be a basis of jurisdiction under paragraph

3.1(6)(c) of the Civil Procedure Rules Practice Direction 6B (subject to meeting the

other requirements to establish jurisdiction). However Mr Bestolov accepts that any

jurisdiction founded on this basis (as with service within the jurisdiction) is subject to

forum conveniens discretion applying the principles summarised by Lord Goff in

Spiliada Maritime Corporation v Cansulex [1987] AC 460 at 476C et seq. If

Supplemental Agreement No.1 is governed by English law this may, however, be of

relevance when considering whether there is a jurisdiction agreement, and also in the

context of forum conveniens.

4. It will be seen that if Mr Povarenkin is domiciled in England, or if Supplementary

Agreement No.1 is subject to a jurisdiction agreement in favour of the English courts,

then this Court has no discretion to order a stay on the basis of forum non conveniens,

and Mr Povarenkin's application stands to be dismissed. If, however jurisdiction is

only established on the basis of service in England (or on the basis that Supplemental

Agreement No.1 is governed by English law) then it is necessary to consider whether

the Court should decline jurisdiction and stay the claim on the basis of forLcm non

conveniens, in particular on the basis, submitted by Mr Povarenkin, that (so it is said)

Russia is the more appropriate forum.

5. In such circumstances the submission that N[r Povarenkin is domiciled in England

and/or that Supplemental Agreement I~1o.1 is subject to a jurisdiction agreement in

3

favour o~ the Engirsh courts stands to be ~;or~sidered fiz~st, as it v✓as ~y the parties

1JC1~J1C 1T1~ y l.JC~UI~t1Ll111~59i11~ ldS~ i~U~~LdllAl US fVl Lt lld yli>IC I.VfL+JC1GLCYL> ~35. ~+jJ ~Jil4.CilJis~~i,

The F~artnership !-~g~reerrient and Supplemental ~l~;reements -the ~n lash proc~edin~

h, Rnfih Mg• T~~ctplr~v and Mr Ppv~r~nl~in ~rP i2y5~r_an ~1fi~7~rtC. ~11r ~$~S$plpv'~ ~71157nES5

interests are exclu~iv~,ly ire P.u~si«, ar~u ~r P~~~~ere :kin's ~asi~ ~~s i ;t~~•~st~

substantially focus on Russia and tl~e C,I~. Neither nay any busine~~ interests or

business assets iti England.

%. I~r Bestolov's claim relates to a "Partnership ng~•eement99 dated 1 June X007, a

SL'.j~~,~viii~iiiL~r°~~ <n~ivvilidiifi ~66~i~+NN,`~'iiivii«Lij~ ~li~ivumun~ lii~~,, 1 99 ~au~pra ~~ ~~aa~ ~nl~

~nrl a ~i,t•ther ~z~pn~ement~ry P9gr~~_r~Fnt c~~~te~J 2p i~ee~ember ~01.~ (b~,t i~, fact exe~:~~t.eci

on 1~ I~llarch 2013) ("~lrpplemental t~greem~nt No.2"). Thy agreements tiver~ ~xecllted

111 d~l,1JJ1C1.lA Ctllll L11C~1 C) Ci1G :9V111C: U111C.1 Glll,l~.~9 111 L11G L1 U11J1Q L1VtIJ VUL0.1111iU Uy Lll~. ~p1G1A 1¢,AV 9.

t~or example, based ~n the translation ~btai~ecl tin benal of I~r Yov~lrerticin, iVir

I7ovarenkin subrriits that 66Partnership Agreement'" is more accurately translated as

66~~operation Agreement". It is not suggested by either party that the Partnership

.Agreement creates a partnership in the sense that phrase i~ ~~ed in English law. "I'he

~uaii~Y 'v`'v'vie`:; a:vili`~'.iii iv uie". iia. iaiia". c~i,ceaiiii~,iiiai~ L~`~ias',as'.i~I4illl99 'vx✓~i~ia a:ia".iaaasg~ iv iiis:

agreement ~f 1 ,dune 2007, and ~ will do the same 2or ease of identi~'ic;ation only. The

C~~t•4n~ rc}sir~ [.l Ri'~PYY9PYYS' rx~.~c ~ro~4A~a Sri 1~/Tr ~~~rinrAnlrin ~i~}in is nn4 c~~ ~rnr nc T nrvi .~rs~.~rc~b (.61 {.11W1 ~1A111./ <i~lb~bi1111✓111. VV UJ Cd1 UlLVU V,' 1tl11 8 VtlUd Vd1S>tdt tlV dlV 1.) lAV l9 5V LUA (A..➢ A UAAA UVV CtA Ai'

a qualified lawyer.

~. The agreerr~ents related to the exploitation of vaxious minim projects in the Yakutia

region of the l~ussian Federation. In each agreement it was Mated that the agreerraemt

way being entered into by Mr ~estolov and [fir Povai•e~zkin on behalf of therrise~ves

and (in both respects) an unnamed partner. In the Paxticular~ of Claim 1V1r ~e~tolov has

identified his partner as a Mikhail Alexandrovich I~harlamov (although l~Ir Povarenkin

has p it rn zssti~ the identity of Mi T3~stolov's partner and indeed whether Mr Bestolov

had ~ partnEr at a11). In his witness statement ~/1r ~'c~varenkin identifies that his part~nei•

was a I~oinan I~hudoliy, the CEO of a holding coraipaziy that xs rnaiority owi~ied by Mr

~ovarenkino

~.

9. Mr Bestolov and Mr Povarenkin agreed under the Partnership Agreement to

incorporate a holding company, incorporated under English law, which was to own

(through subsidiary companies) the relevant projects. The shares in the holding

company were to be owned: (i) 75% by Mr Povarenkin (and his partner); and (ii) 25%

by Mr Bestolov (and his partner).

10. In this regard Clause 2 of the Partnership Agreement provided (per the translation

obtained on behalf of Mr Bestolov):-

"2. The aforesaid company shall be incorporated under English law and shall besubject to the requirements of English law. The Partners acknowledge that allprovisions of the reached agreements will be reflected in the company's constitutivedocuments. The aforesaid company shall be the sole ultimate beneficiary for therunning projects. Any other companies incorporated for project purposes underRussian law or any other law shall be 100% owned by the joint company. All issuesof joint ownership and decision making process will be resolved at the joint companylevel."

11. Clause 2 of the Partnership Agreement (per the translation obtained on behalf of Mr

Povarenkin) provided as follows:-

"2. This company will be created under English law and will comply with therequirements of English law. The partners recognise that all the provisions of theagreements which have been reached will be written into the incorporation documentsof this company. This company will be the sole ultimate beneficiary of the projectsbeing realised. Any other project-type companies which will be governed by Russianor another law will belong 100% to the joint company. All issues regarding the jointholdings and decision-making will be made only at the level of the joint company."

12. In the event the English holding company was never established but, says Mr

Bestolov, Mr Povarenkin and Mr Bestolov nevertheless proceeded to develop relevant

projects jointly on the basis that they were owned by them on a 75/25 basis.

13. Mr' Bestolov's pleaded case is that pursuant to what became the Partnership

Agreement, Mr Bestolov would use what he describes as his substantial experience of

the mining business gained during his work in mining companies and his business

connections in the Republic Sakha (~'akutia) in this sector to identify appropriate

opportunities foz~ investment and supervise the acquisition of identified businesses,

5

r~uhi~st 1'v~x• ~~ovarer~kin was to p~•ovide tie ~~r~c9ir~~ for the ai:qui~itio~n end d~eveloprnent

v¢i~ t~1~ ~~~~~I~asi ~iii~il'ic~5. ~~v'siui ~a~i'~'c~ivivv, aiiu airy ~ziiiiiti vi ~ii5, v+i i9 iiJ a ~v~iiii~it iv

c~c, Gi~ici did, i~ very rr~uch i~~ iss~~ its t ie c~~~pra~e thai ~a~ trarls~~irec~.

~. ~,iuii,y' ~`v"e',aA~ iaisP.1'dc"sifi~iy i~jiia ili"1~1iu'~ividi L\l ~..J~ ~w'v t`~iI'C'~et:C~ ~%veJ2'% av`diJiJ~'i.i~ lit i ~i~i,1~1~t:

(1) The Sarylakh-Surma and Lvezda project, through Ong ~aryla~h-~arr~a a~~~ ~~,~;

~vezda, bath being companies regi~teY•ed ii1 the 1~ussian rederation; ar~ci

(2) The ~Ierkhnemenkeche project, through C)AC) GeoProlVlining ~lerkhnerrienke~h~,

another company registered in the Russian Fedet~ation.

15. supplementary A~reeme~at IVo.I. (entered into ~~n 2F ~~ril 2012 prr~v~~e~ (~P_r the

translation ol3tained on behalf of ~/4r 13e~tolov), "This Ag~~eernent is concluded

'~l~li ~~iii i`Zi iv ~i~c d~~)"iiiciiici/ n~ it~G /iG~iGi r L%L %"t~.)`~G(.~ (`%~ L'~GG l%G%'Gl uCVCG(%J%%C (,%LL (I4 l~l f;1 [ f h' l Y.,.. J J 1 J

projecis in ins ic~~aidlre ~~f~.~aici~a t r'c~icuiia),,. i~ara~raph 3 (per the tr~~n~iatio~ obt~~i~eci

on behalf of ~3eslolov) provided, "The Parties hereby agree to settle all thezr rzghts

anal obligations z~nder the Pcz~tner^shil~ A~-r•e~ment on the terns set forth ". Paragraph 3

(pert the translation obtained on behllf of ~/Ir ~'ov~trenkin) provided, "Under this'

B ~rroavenn»f t~cn 11n r}ri_ ~n i~. ~~ _mil t., ~. ..l~r a., ~, 17 Cal ..7, .: L.s ~.... .7 L, 71 .' I.'--.._ >~ .... ., .r.._..~. iii 'v "v:: Z"vivv L•va. 1. Lui Lii...i ici.0 'v ~.Nbr 1. i.. i,i, uii i I.~LLti.L~l. I.LGL lJj 4%EC. L%~ %~L~%LL LL%GI.L l%L4L~12 LGV%LJ GL/G1.L l./

the ~'oop~rcation Agreement on the terfns and condztzons ~f this Agreement blow ".

16. On its face paragraph 6 0~ the supplemental l~greernent l~to.1 provided for• the

terrr~ination of the ~'<irtr~ershr_p ~gree;~ent gave iii z~e~pect ~f the ~~~~kl~n~r~enk~c;he

Project wllicl~ was to be regulated by its own separate agreement (in the event

Supplemental ~~greement S~io.2), albeit that there are main differences in the precise

wording of the respective translations of par~~graph 6:-

(1) I'er the translation obtained on behalf of Mr ~3estolov:

466. The parties agree that except for the rights acid obligations o4 the Panties under the`Ierkhnemenkeche project, which shall be regulated in a separate agreement ina~~;~r~ ~~ir~e with paragraph ~ oaf the ~~greer~~ent ,the i artnership A~reern~;nt i~terrr~inated forthwith oy mu~ua~ ~~nsen~ of she 3'az~ties liven that:

h.1 The rights and obligations of each Party under the Partnership Agreement are

considered completely discharged."

(2) Per the translation obtained on behalf of Mr Povarenkin:

"6. The Parties agree that except for the mutual relations of the Parties in the

Verkhnemnkeche Project, which shall be regulated in a separate agreement in

accordance with clause 5 above, from the date of the signing of this Agreement, the

Cooperation Agreement shall cease its effect and shall be considered to have been

terminated by mutual agreement of the Parties, at the same time.

6.1 The rights and obligations of each of the Parties under the Cooperation Agreement

shall be considered to have been carried out in full respectively."

17. Under paragraph 4.3 of Supplementary Agreement No.1 Mr Povarenkin agreed to pay

US$9,035,147 for 90% of Mr Bestolov's interest in two of the projects in question (the

Sarylakh-Surma and Zvezda projects) within 90 days of the signing of the agreement.

Supplementary Agreement No.2 addressed the Verkhnemenkeche project and provided

that Mr Povarenkin would pay Mr Bestolov US$1.5 million for his share in that

project.

18. On 7 June 2012 Mr Povarenkin caused a company that he owns, Cuento Portfolio

Corp, to pay to Diageo Global Services Inc, a company owned by Mr Bestolov,

US$3million, US$1.5 million of this was part-payment of the money due under

Supplementary Agreement No.1 and the other US$1.5 million was in complete

discharge of the money due under Supplementary Agreement No.2.

19. Mr Fovarenkin did not pay Mr Bestolov the remaining US$7,535,147 pursuant to

Supplementary Agreement No.1. Accordingly, Mr Bestolov's claim against Mr

Povarenkin is for payment of this outstanding sum (and interest) and, as such, says Mr

Bestolov, is a straightforward debt claim.

20. Mr Povarenkin takes issue with that characterisation. He alleges that in fact the

relationship was much more complex, that there was an agreement whereby Mr

Bestolov and his unnamed partner were to assist in providing lobbying and

promotional services for the purposes of a new enterprise in Yakutia in Russia, that Mr

~3estolov refused to name his partner, despite several requests, that there was to be a

7

:>~ii~ v~ ~,itt;~c;:~~ iii ~i~~; ~j~c~~e~:t ~ej ~~~i c;exitl~~ ~jc;r ~;e~~C, iia~~t th~~ ~'a~~tgzet~~hi;~ f?~x'~~,~~a~.rztOt'1Lr~il~~~~V ~pilCltirlFrl rn '7(( I ~lj~ nn,~ ;v'~an~~a 17 0 , ht;,, o- r_,).)~, ~.,...~. ua, i~;lU. Jv~~~J~i~)±~t;s, L11clt .J1:1ti; ;I1:1~1~~ r~/?~

J F„ lA,., t.D .. a cam _ a. _ d~ v ,~~~,_. ~~, iv>a ~;,~t~~_~ il~~ 1~,C; x`Jt.i.~;~,.~:, •v'~ :is., ~w`J✓~afia ~ai1Qviii%✓c1i~C ii4at~llla~~1G[7 ~O 111

trnnaz~ne~ paz~tner~ i~ J~~rle ~~12, ~~ut i~a~ there~z`ter ~eriou:9 ~;ol~l~;er~a arose a~ to ~llE ~~atu~

~11~! iC1~~111tV ~~ IV1Y ~33C~tp1nL''~ ~av~9~n~r it ~~ ;~,~ r;;,~ q ~ . L, _ , ,t. „, ..~,.,.. „Ci ~ cs ~. i'v'Ai a ii ✓lAA l,A1d~AA1 1dV11C; IIAG.: .l (,:5:9 ~){j~(~

tl~~t znon~y ~~ecfzu~e he coulcl~'t be sure that non-n~~vr~,Pnr wn~~i~l ~,~r 7~~~~ r~ a~~v~~r7e

I'~~J~l'CL1~SS10I1~ 1[1 ~i1~Z11P1~1, ~1pC~ ~I' ~~0~/~1T'P;7~'.i1 St~~S ~~lu~ ii y' ti1(, ~.litic; Gi ~(;I'V14;~ O1~

%~'C~;v('.Caili~y,':~ uilCa i~i2 iialati1i~ Oi lei' ~Ilt1('I~1XI10V 'sl~i Itlt; SU~)~70SE;C1 ~7~1f~~l(;I" Of ~P' ~,(;;~~O~OV

IVtx I'ov~renkir~ ~~~~arr~e aware t~zat he ~ac~ been misled ar~d that raeit~aer i~/L~' 13estolov:~c,i~ iii:, ~~;iiN,~~;c~ ~artn~r9 i ~ tt~e ~•e iazcleeci ~Na~ c~rzc~, ~~aci the port c>t~ iY~f~fta~rlc~ a.nd aP~ili1~~ t~~prorr~ot~ ~r a~~ist with tob~yin~ zn relatiUr~ to this project that IV~~ ~3e~tolov 1~~lcl

r-

I. ial t~~e~ ~~o~~t~,xi a the c;haliex~~;c to juv~i6gc~i~~~io~~ r10 cl~;F~;x~~;e h« y~;~ c~~;c;ar serv~;~a ~,y fir~OV~It'~I1~Cli1. ~-~OWE;\IP,i.' ~I~.0 C'p~~nvE~l~ R~r Tl,! ~i:;l T'g',i1~ ~~.Y, uidiiil~ iiii, i:0'ti~tiC; Gi I!1`~ ()I";11

, .~:~..~~. ~ ~ ltir y iA.b l.. AA LII AA~.Id L1 AL, LA Ld 11A1C VL 111(;, ~,jt,,,.i fj~](e„(~'tij [(~C~C ~ynl A~v~vC~.t~~.11.~~l ~17~~C~ ~61,.d ~~C~I I~, (,.

to the ~l~u~n. ~-~e identified that IVtr ~'ov~~renlcin wotilcl say thaC he, way misled ir~a r~l.f~t:~i~~-~

iv she cor~~iusion of tree 1 artnership A.~;reerraer~~ anc~ the ~upplenzental ~~reer~ent~ asto the ~oientia~ fot~ the a~;tivity to be carz~i~d o~~t, and that w~~s ~~apposedly being c;arz~i~dUU~ ~V 1~~' d~~,~'iP.O~OV ~ltl(~ 115 tlt7n amat~ {-~r~e•tr~nr ~~f-,~l at,~t rl •,. ,.,,...~ t_ - ,;r.. r ,,_ _ __ ._.`_ ~_.~......_ y ,...: taau~ -rvx~.., dv C,i C~ liA l:QL1AC.~ t31 L1~U:s l:

~.~;I'e~;~xA~;t1t~ its t~;ii~ati t): iii ~~rtttet' pr()ir~oli~nLt~ ~t~c1 IOb(~yttz~ ~erviC~t;S ~vi~~~°fit i~~~ .~~t ci

W~I~ t~7~ 0~7~1~d~]0~1~ 0~ ~C }3e~P~n~nv ;tnr~ 1~r_~ rq:irtn~r ~in;l~;, rk4~ ~„9~a.,<,w~i..~, n- - r»-~--.~. rt uA ~AlA~15A1d FJ f'A~A ~~iA~l~i ~.l~

anc9 the ~up~lerx~en~az~y ~~re~z~ent~, ar~~otintin~ to repudiatol•y t~re~ch~s, orali~;a~r1~~l~vely t17a1 th~;x~e ~r~a~ a toC~~1 3aill~x~e; c>~ ~;oz~~rc~f~r~~tin±, i~l i~~:~a1i,~:~ to t~~F~; ;t~c,~a~;:qp~rrportedly ~ar~ed, with a restitt~tio~ary ~:lairn for ~~epay~z~e~t o~ the ~ura~~, c~l~ixileclazz~i/c~l~ a ~1air~~ z~r ci~~rnage~ to 'ue ;~~t oi~~~ agaia°~~t t11e clairra andiot~ tl~ai i~r~ ~~;xeel~ae~t~thexr~~ye]~i~~ w~,r~ void~i~(e and «~~~~~1~ox~~;ea(~l~o l~r Pov~~rerz~<ir~ will ~~l~o <~~~e~~t i:~~aC rf thea~;reeme~t~ are ~overn~cl by ~Z~~~tiiaz~ law tl~Xey ~ir~ tirrze~-bared no claim I~avir~~ t~~~ncorriznellced within three yeax•s of the accrual of any ca~as~ of ac;lion (~2L~s~i~~~ Iaw~~rovidin~ for a ~hxee year limata~ion period per the expert evidence of I~z~ ~oli~er onbehalf o~ ~/fr ~'ovar~nkirlj.

~'lse i~ru~~c;l~ ~~,~ul~lt~c~n ~~c~~,~l~t ar~ci r}~~ CTT~~

22. Domicile is governed by Articles 4(1) and 62(1) of the Brussels Regulations Recast

(Reg (EU) No 1215/2012) which provide, respectively, that:

"Subject to this Regulation, persons domiciled in a Memher State shall, whatever

their nationality, be sued in the courts of that Member State. "and

"In order to determine whether a pasty is domiciled in the MembeN State whose

courts are seised of a matter, the court shall apply its internal law. "

23. Paragraph 9 of Schedule 1 of the Civil Jurisdiction and Judgments Order 2001 SI

2001/3929 (the CJJO) sets out the legal position regarding an individual's domicile in

the UK. This provides, in relevant respects, as follows:

"(2) An individacal is domiciled in the United Kingdom if and only if—

(a) he is reszdent in the United Kingdom; and

(b) the nature and circicrostances of his residence indicate that he has asubstantial connection with the United Kingdom. "

(3) Subject to sub paragraph (5), an individual is domiciled in a particular part

of the United Kingdom if and only if—

(a) he is resident in that part; and

(h) the nature and circumstances of his residence indicate that he has a

substantial connection with that part.

(6) In the case of an individual who—

(a) is resident in the United Kingdom, yr in u particular part of the United

Kingdom; and

(b) has been so resident for the last three rrconths or more,

the requirements of sub paragraph (2)(b) or, us the case may be, saib-

paragraph (3)(b) shall be presumed to be fulfilled ienless the contrary is

proved.

24. It will accordingly be seen that there are two limbs to paragraph 9(2) which are

cumulative, so that an individual is domiciled in England if, and only if

(1) he is resident in England, and

(2) the nature and circumstances of his residence indicate that he has a substantial

connection with England.

9

~s vas staCecl try lady J i~ .~'zgh C~'ecCz 1`nternatior~al fl.G v l~erzpcaska (2~06J ~~i/HC;

~2ir> ~~~) ai [6~ ~res~rrin~ io tine icieriiic;al provi;~ion~ in ~ectit~n ~"~ ~ 'the ~,ivil

Jl:irisdic~ioz~ a~~acl :~i7dgrnents Act), the ~vvo c;otzcepts must be considered separately and

indep~;ndently. It is not n~cessai•y t~ address '`substantial connection°" unless

66i~~iCi811i,~" iia~ iicc~ii cSi~iviiSiict~.

25. It is settled law thak the relevant date for consideration of an individual's c~omi~il~ is

the date of i~~uc of the claim form, here 2 February 2017 W see C'cer~actu Trcast Co v.

Stolzenber~ (No.2) (2002 l ~iC 2 (~Ll; C"herr~r~y v ~eripaskn (2~J07? ~E~1u~' 9b5

~~JYiiiiij, ~iuiii.ii~j; ililuii~i"iiiiG'ji V iii~iiii"riOviCit ~t~,l~'U'o~ L'~',vJi['~1~. ~C71J iLUCI1TT1),

para.~44~].

Applicable test

26. On an interlocutory application of the ~re~ent kind, zn order to e~tabii~h that the

English courts have jurisdiction over his claim against Mr ~'ovarenkin, it i~ for T/Ir

~3estoiov to establish that there is a "good a~gu~zble case " that I~/lr ~~varenkin was

resident in England at the date of the issue of the Claim Form. That is ~ lower Pest than

"on the balance ~f probabilities" but because the outcome is effectively deter~in~tt~v~

0_F the iSSL~ Of ~~iri5~1~4i0~? ~~Cl b~Jf~!~ CIY'~Zlf,~b~Q CLISC'„ ~'~~U1.e~ ~~. ~e~~J~'~'.~J ~~~ hil`J~ ~~Ll

rnzaeh becte~ argurne~t on the mczteric~l cavaila~le " -see ~'ar~~sd~ 1 rust v ~'tolzer~berg

[199 ] 1 WL,~ X47 at 555G (CA per Taller T~,l) approved at [2002] 1 ~C 13 (AIL,) ;

Royal c4z S'zcn Allzance Insurance v MIS" Digital F'ZE (2006] EWCA Civ 629 ; f3ols

Distzllerzes }3V v Superior Yacht ~'ervices Ltd [2007] 1 ~i1L,I2 12 at 22 (~'~) and

~'herney v1>eripaska [2007] EWHC 965 (Comm) AT [20].

12esiclence

27. A person will be resident in England if it is for him a settled or• usual place of abode.

A settled or usual place of abode connotes some c~egrce of~~ermaner~ce or co~etinc~ity,

which will of co~~rse depend on the particular circum~tance~ of each cEi~e -gee Bank of

Dubaz Ltcl v. Abbas [199I] IL Pr 308 per Saville L.J at paragraphs 10 and 1l, Cherney

v. Derzpa ska [2007] EWHC 965 (Com1~), [2007] 2 All ER (Comm) 785 at paragraph9 "Yi /.

i ~1l.v

28. A point of some potential significance in the present case is that it is possible for a

defendant to reside in more than one jurisdiction at the same time —see Levene v

Commissioners of Inland Revenue [1928] AC 217 at p.222; and Cherrcey v Deripaska

[2007] EWHC 965 (Comm), para. [18]. Also of potential relevance in the present case

is that it is possible for England to be a jurisdiction in which a Defendant resides even

if it is not his principal place of residence (ie. even if he spends most of the year in

another jurisdiction) —see Lowenstein v de Salis 10 TC 424 and Levene v

Commissioners of Inland Keventee [1928] AC 217 at p. 223.

29. In Lowenstein v de Salis, Mr Lowenstein was a Belgian subject with a residence in

Belgian who visited England each year, and when in England he occupied a "hunting

box" (which in fact appears to have been a substantial estate) belonging to a company

of which he was a director and held over 90% of the shares. In no year was he in

England for a period of 6 months or more. In 1923-1924 he arrived in early November

and stayed there for fox hunting until the 21 December, about which time he left the

UK before returning in January and leaving again in March. In 1924-1925 he arrived

during the second week in November and left the UK in the second week of

December, returning at the beginning of February and leaving during the second week

of April. He was found to be resident in England for tax purposes. Rowlatt J concluded

(at page 9 of the report),

"you look, at the substance of the matter and say: this is the house in which hecould reside and did reside...he has got this house to come to when he likes;he does not own it; he has got no proprietory interest in it, but it is just as goodas if he had for the purpose of having it for a residence, and there, it is. I ambound to say that I do not think there can be any question on the facts asclearly found in this case."

30. Equally in the Scottish case of CoopeY v Cadwalader 5 Tax Cas. 101 an American

resident in New York who had taken a house in Scotland which was at any time

available for his occupation, was held to be resident there, although he in fact had only

occupied the house for two months during the year.

3L In Levene v Commissioners of Ifiland Revenase, Mr L,evene, a British subject lived in

London until 1919 when he left England under medical advice with the intentiozl of

1 "1

livrr~g abroad. ~-Ie returned to the United I~irr~c~o~n for ~i period of about five ~ia~nt~is i~l

eacl~~ yed~ i~rLii 1~2~ ror the purpose of obtaining rnedicai advice, vi~itin~ hip r~~ativ~s,

~aking; park irn Jewish religious observances and dealing with hip tax affair. I-~e was

found not ~o ~i~ entitled to relief from tax o~ the gro~.znd that he was nei~hey° "r~sici~r~t"

ilea" ~`~iCiiii~iiij/ i~~iC~tE3ii" ft~P i11CC)rT1~ l~X ~LII'pOS~S n~/ ltle ~(~eClal C01111711SS10ri~PS, a

~~~~~~~J~? ~~~~9 t~J?S ~~~1T'!~12e~ ~2~' ~~~~Ji~rt T t1~A f~..,,rr ~ !a~~t

i ~ >~.,, tY c r .~,.u~~ a ii v ~..t~ui~ ~i ~ ~a:,ca.~ i~'i't ~a~c~ i ~C3d~~5~' ~~. ~~Lil~.

Although the decision itself was founded on the decision of the Spe~i~,l

~omrrli~si~ners being findings of fact whit;h could not be clisturbed, iri the course of

his speech Viscount Cave LC, said at page 222:

"My Lords, the word "reside" is ~ ~tamiliar English word and is definediii ~iia, vniviu Lx ~k:ti~ii i_ii~; iii ~(~n i'v ~~ ~r5 t~wt rit Ti t7 [n ri ~x~P~~ n~rmanvnrirr v^iv ~ yy j..... ....,~......,. ~i~

for a consiaerabie time, to have one`s settled or usual abode, to live ire or~t a particular place." No doubt this definition must for present purpos~;sbe taken subiect to any rriod~ficE~tiop whil.;h may result from the tet°rr~s catthe Income Tax and Schedules9 but, subject to that observation, i~ mayvd, ca~'.i;~icCe i't~ 'r.~i1 iA4;l;u1slic; ii1t~1Ccdllvil vI [11e 111e~1111I1~ OI C1lE WOl't~

"reside99. In most cases there is no difficulty in determining where a rnanhas his settled or usual abode, and if that- is ~s~ertaine.d he is not the lessresident there because from time to time he leaves it for the purpose ofbusiness or pleas~lre. Thus, a master tnar•iner who had hip home in~r~c15~04V ~N~lEI'e ~l C wl~P ~1~[~ fa~ily liyarl' i;;.~ t~ ::~h~r;h h~ rat„~--o,~

V 1Si 1, 661 d10~12

curing phe ;ntervals bPt~~veen hip sea v~ya~es, ~~a~ held to re~i~le there,although he actually spent the greater part of the year at sea: In reYoung ; Rogers v Inland ~tevemle ~imil~rly a person who haS hishome abroad and visits the United Kingdom from time to time fortemporary purposes without setting up an establishm~rit ire this countryis not considered to be r°esident here .... ~3Lit a min may reside in snorethan ore pl~c~~. Just as a mein ~~ay Have trn~o horrie~ -- one in I,c3;Idc~~~and the other in the country --- so he may hive a home abroad and ahome in the Ualited I~in~cioni, and in that case he is held to reside ir~lboth places and to be c;hargeal~le r~rith tax in this country. Thin, inCooper v Cadwalader (2), an American resident in I~1ew York who hadtaken a house in Scotland which was at airy dine available for hisoccupation, was held to be re~idenC there, although in fact he had onlyoccupied the house For two months duril~~ the year, and to the gameeffect is the case of Lowenstein v de Saks .The above cases arecomparatively sirri~le, but more difficult c~ue~tions arise when then~rcnn cni~bh~ to ~;,~, ;,1i+i~i~iu iiii:~ ii0 iivtilt~ Vt G9l~lU1lJililiC lli 111 iiil~/

country but lives his life in hotels or at the houses of his friends. If such

a man spends the whole of the year in hotels in the United Kingdom,

then he is held to reside in this country; for it is not necessary for that

purpose that he should continue to live in one place in this country but

only that he should reside in the United Kingdom. But probably the

most difficult case is that of a wanderer who, having no home in any

country, spends a part only of his time in hotels in the United Kingdom

and the remaining and greater part of his time in hotels abroad. In such

cases the question is one of fact and degree, and must be determined on

all the circumstances of the case ..."

The above passage was quoted with approval by Langley J in Cherney v Deripaska

[2007] EWHAC 965 (Comm) at [40] and [43], a case to which I will return below.

32. In IRC v Lysaght [1928 AC 234 a case where someone who was living in Ireland

would come regularly to England for a total of less than three months a year, and

would spend a week or so in a hotel for the purpose of board meetings, Lord

Buckmaster noted at pp. 247-8:

"Though a man may make his home elsewhere and stay in this countryonly because business compels him, yet none the less, if the periods for

which and the conditions under which he stays are such that they may

be regarded as constituting residence, as in my opinion they were in this

case, it is open to the commissioners to find that in fact he does so

reside, and if residence be once established ordinarily resident means in

my opinion no more than that the residence is not casual and uncertain

but that the person held to reside does so in the ordinary course of his

life".

33. In Foote Cone &Belding Reklirn Hizmetleri v Theron (2006] EWHC 1585, Patten J

came to the conclusion in that case that residence had been established. The

defendant's wife was permanently resident in England in a house in Kingston owned

by the defendant, his passport showed him as permanently resident there, and he

occupied the Kingston house on regular monthly visits of at least a week or more,

and was registered for council tax and utility bills. The matter was summarised by

Patten J at [23] in these terms:

"... The Kingston property is his home when he lives in England ...

One can have a residence in more than one place and domicile under the

statutory definition depends on residence, not on the old common law

test of where one intended to permanently reside in the sense ofindefinitely and exclusively".

13

3~. I~ high Te~Gt ~nt~rr~a~ionttl v bleb Vfcdz~ri; ~vir./~ .~e~•ipa~k~ ~2~~~j ~;~J~-~~ X2"76

~~~~ 1"P~lia:2~v~; ~N~l~; ~~cl~°~~~ Lit;~;l ~~:~ ~l~'J`✓£ ~i~ r~u~~ 1:1 ff;~2e~iCi1 i~ ~~1~ ~i5i~ ~ iii ~✓~i

l3eri~~a~~<~, ~~n e~~tre~ely w~~~it~?y I~..~?:~~ia~ (~~ti:~~n ciornicyle~i i~1 12u~sia r~~~ way al~c~

alleged to be clomi~i~ed in England. A1t4~o~ag4~ he o~,vne~l t~~o valuable ~aorn~~ in

~ngiand (one in v~ieybrid~e anti one in ~eigrave Sc~uar~e), ~~is visits were almost

always for business purposes and were de;~crrhecl afi 66flvin~~ vi~~t~". ThE~ c3ay~ r~ral~P~i

together between two and three months a year, although as Eacly J ~~oted at [16), the

pattern of his visits was "much mope f~cagmented than that which eYner~ed from the

evidence i~t Cc~dwalc~er, ~%oote Cone oN Lysaght. " Eady J identified, rightly i1~ ~~iyview, that residence is not to be judged according to a "numbers dame" and that "itis u~~~°~~riuie io uc'edress ilze escalziv ar~ci naiure of ~ the visits in questio~a " (pare ~4}(my emphasis). At paragraph ~~~ J he Mated,

'`~itiiu~agii iv~r ~eripaska owns iwo v~;ry ~u~staniiai properties rn ~;ngiand, iresponsible for the council tax and utility bi11s, and keeps them "ready ~`or°use" thr~u~h staff employed fir the purpase, it would not be Y-ight, in thecage or a man so wealthy, to make the leap from property owning to"residence". There is undoubtedly permanence and continuity i~ ownership

,• ,• ..arici ~~ncair~ci~ oc;cupaiion, gut not neces~ariiy when one tomes to address``r~sidenee" or "~ibode". There is c;c;rtairily no regular pattern, comparable tothe situation irl the eaYlier cases cited to me. fllthough iV[r I-Iunter appearedto be suggesting that a presumption of residence arises i~rom the mere fact ofournership, ~ find no authoritative support for Chic proposition. It seems tome that it must be a question of fact and degree in each case, according to~h~

s~.rr~rre~riata Ef~P~I;;:'r~ ~'f n.~~F T~Tr, ~f,,,hr 'f ~a 7r v e.av uv~ iii lit C6il y' 6~[A ~t;.J 1L WrV L61U VG

relatively easy Yo draw ~n inference ~f re~ic~P~c~~ ~~~~m the pt~s~es~ior: ~~~~~s~~n~ial i~oiise iii ii~i~ jurisdiction. here, however, the total picturenPrmitc nn cii~h infPranCd ~jlP:~ u:P ¢.^,^;h~I~c j~ ~A.r~r„1 ' ,J',.a:,.rr t,:,,t,[' ~'--'-"" - > i ~]v v i,.l u1 j~l'd11JU16. L1V 11J W 11A4.1d

are there for convenience when it is necessary to hold business meetings.'I"hey may perhaps also have some incidental value as inve~tment~, but theuses to which they are put su~~~~t ~o me that they are "stopovers” ratherthan homes ire any conventional sense. I~r Deripaslca'~ visrt~ to England cangenerally be classified as merely ancill~z~y to the ~ond«ct of his Russianbu~ine~ses."

(my ernpha~is)

35. It is also noCable, on the facts of that case, that Mr Deripaska's wife only spent a

limited nurriber of days in England (for example in 2005, 11 days whilst her children

spent only 5 days) end the (limited) visits of 1VIrs Deripaska did not x7ecessarily overlap

with those of her hrisbarid. ~Iis visits were e~~eriiially business related, rather than

family orientated, and were flying visits with a fragmented pattern of visits. Ultimately

I~

Eady J concluded, on the facts of that case, that it would not be realistic to describe Mr

Deripaska as residing in England.

36. In Cherney v Derzpaska [2007] EWHC 965 (Comm), Langley J also had to consider

whether Mr Deripaska was resident in England. At paragraph 18 of his judgment he

expressed the view, rightly in my view, that there is some risk of over analysis —the

words are ordinary English words —the question was whether or not, on the evidence,

Mr Deripaska "is resident" in England, and in this regard the benefits of certainty and

predictability in the interests of defendants need to be kept in mind in addressing the

question, referring back to what he had said at paragraph 14 of his judgment by

reference to Owusu (supra),

"In Owccsu v Jackson the Court of Justice of the European Communities heldthat Article 2 of the Brussels Convention (in materially the same terms asArticle 2 of the Judgments Order) was mandatory and so not subject to anyexception derived from the principles of forum non conveniens. The courtemphasised that "respect for the principle of legal certainty" and "thepredictability of the rules of jurisdiction" underlay and supported such aresult, as well as the legal protection of defendants who would generally bebetter placed to conduct their defence before the courts of their "domicile"as defined."

37. On the facts, like Eady J, he identified that there was no pattern to Mr Deripaska's

visits to England, save that the majority were one night stays and involved a constant

flow of business meetings. Once again the major factor relied upon was the

permanence of the establishment kept by Mr Deripaska at 5 Belgrave Square and his

visits and those of his wife to England. Expressing himself in agreement with the

views of Eady J he did not accept that submission stating, at paragraph [45],

"It is not a numbers game, although the numbers hardly support NIr Cherney'scase. The "quality" of the use of the house is, I think, ec~uall~mportant. Inmany ways its use by Mr Deripaska resembles that of a private hotel It isinfrequent, intermittent, and ~enerall~fleetin~ The house has the character ofcontinuit~d permanence; its use does not. It cannot, I think, in any normalsense of those words, be described as a "settled or usual place of abode" of MrDeripaska."

(my einpha~is)

15

3~. L,ar~~;ley hi~illi~hted, t~~erefore, as did ]~,ady J, that it is the naCuz~e ar~c~ quality ~f, tale use

ta~~a~e tt~aY is i~;~c~rtaY~t; r~~t17~►~ t}~a~~ ik~ ownership; ~n ~ol~siclerir~~ wl~et~er F~;r~~l~~c~ i~ ~A

se~tl~d or usual place o~ abode that connotes some c~egrce o~f perma~erlc~; or ~ontinulty.

:~9. f1 rather different case, and one which Nir ll'Cruz, who appeared for 1Vir i3estoiov,

SLLUTTIIlI~;:.l I1dC1 Wltls!1 f1C ll~~'.~Ii~Cl 'dS [1ctVtll~ scSl[It~iCl~ g1.Illiill.!tC599 ~J liir ~Ja~'3r.-.'il! ~.;1g~ :J

that of Vc~rsani v Relfo Lt~' [2010] EWCA Civ 560. In that ease the Court of Appeal

once a~air~ had regard to the nature or quality of the use of the preinise~. In that ease

the premises were occupied permanently by the defendant's family and could fairly be

described as the "family home"

~u. Tne question nor determination was wnetner a property in ~ ngiand ~ C~ainsb~rougn

v~iuciis, ~u~waic, iviiuui~ScX ~iiTc 66LiU~WCI(G civiijc"j "wa3 ijic a~~~i~iiaiii'S 66L~JUQ1 vi

last known residence" wifhin CI'R 6.9 in the context of whether the appellant had been

properly served in the jurisdiction. The appellant way ~i ~riti~h citizezi with a full

~3ritish passport, who had a business in Nairobi. 1-~e was x•ec~uired to obtain an entry

permit t~ re~i~e in Kenya and he had a re~identiai adt~re~~ ire ~lairz~bi. The a~p~,llu~~

and his wife were registered at IIM Land registry as joint legal proprietors of the

Edgware I--~[ouse. It way transferred to him in ZOOS when, according to evidence which

h~ give in proce~aings ~n ~~~igapo~•e, iris wipe a~1~ c%ildr~sl (who are not i~ritis~

~1Liz~Ti.~i~ cc.~r~'i.ii~'i.i~~ i.i ~11~' TJ i71 L~'i ~.l 1~~iigtdv lTi. Lid uii~ ~"i1."i ~i~Jll~ a'Id~ iil~d~ Cii~l`~.~i ~ii9 `vidliv

were ages ~, :iy anci ~u at the tirrie of the deputy .Tucige :~ judgment. Tne~ ali iiveci in

the Edgware ~ou~e, together with the Appellant's father, mother and disabled sister.

There was no estrangement between the Appellant aid his wife. She viszted arrd st~yecl

wrth hip wife and family in the Bdgware ~ou~e every year when and to the extent that

hip work perrriitted. ~e stayed there for 27 c(ay~ in 2002, 49 in 2 03, 43 iii 2005, 3~ ira

200b, 53 in 2 07 and 31 in 200 . ~-Ie also had other assets ire the ju~~i~diction. Ill the

Sinepore proceedings he had affirmed in various affidavits that the Edgware l~ous~

was his residence, or at least one of them, and described it as his home.

41. ~.t first instance Jules Sher Q~', sitting as a DepLity Jude of the High Court, found that

the; "quality" of the appellant's use of the Fd~ware hoti~e; wits ~~ ~ Dome; it was w_h_e_re

h;~ ~vrrT;P~1,?4~~ ~i:C~ txJ~r~~r ~farngl,~ l;~~Ev~: ;4 `~.~uc; ~xfhrrA hn~. ~~'~1:."~AiI ~u`;11 y'PP,: ~~..:m ~(1~1~

xx~~ -+ sic v~ -A ~v~-i r~ ~•l~v)ia ~•n r~ c~~4 '~o i~}. ~. i T 7 '9' f~l~~.~ .-i .~ '~.vv isli. ~ss.~ ~I~~a. e~_su s.,ssai_i_t,zs ~t,~~s~.e`% iii iti~., vi~ cEi1Ci 1~ ~Idti`~' iz~i~ ~t~i~i. ~a~~s`;Y'iv~E~ ?i~i1i3

home in proceedings in Singapore. It was there, as in the present case, common ground

that on the ordinary meaning of the word "reside" one can reside in more than one

place at the same time, and the Deputy Judge did not doubt that the appellant resided

in Kenya, but that did not detract from the possibility that he resided in England as

well, and in view of the quality of his occupation of the Edgware house as his home

the Deputy Judge found that he did. He distinguished Cherney v Deripaska (supra) and

O.ISC Oil Company Yugraneft (in liquidation) v Abromavich [2008] EWHC 2613

(Comm) as cases where the defendant, who was in each case an exceptionally wealthy

businessman with houses in several countries, whose primary business interests were

not in the UK and who stayed in houses they owned from time to time when on

business trips, such houses being, in contrast with the Edgware House, not "homes

where the defendant's family lived" (see para [18] of the judgment of the Court of

Appeal).

42. The Court of Appeal concluded that the Deputy Judge was "both entitled and right to

conclude that the claim form was properly served on the appellant at the Edgware

House" (para [33]) as his usual residence. At paragraph 27 of his judgment Etherton

LJ (with whom Elias LJ and the Chancellor of the High Court agreed), stated as

follows,

Whether a defendant's use of a pro~erty characterises it as his or her"residence", that is to say the defendant can fairiv be described as residingthere, is a question of fact and degree. In the present case, the EdgwareHouse is owned by the Appellant and his wife, and is the place where hiswife, children, mother, father and sister permanently live. It is the placewhich the Appellant has affirmed in court proceedings is not only his"residence" but his "home". While such affirmation is not conclusive, it isplainly highly material. The Appellant visits that home every year to see hisfamily, staying; for not inconsiderable periods of time as and when his workin Ken~~ermits him to do so. It is, in an obvious and very real sense his"family home." Taking those facts together, it seems to me quite impossibleto contend that the Appellant does not reside at the Edgware House at all.The Appellant himself did not contend to the contrary in his witnessstatement in support of the Application. To be fair to Mr Jacob, the co~ltrarywas barely pressed by him."

(my emphasis)

43. He continued at paragraphs 29 to 33 of his judgment which merit quoting in their

entirety:-

17

29 I do ~~ot accept ~r ;~acol~'s subrr~ission that, in d~t~r•rriinin~ whether a

r~s~~en~e is d "~asu~l" r~si~i~n~? within (~PIZ. 6,9 t~1e lest to be ar~ulied is

e~~enti~Ily one o~ merely comparing the ~urati~n ~f peri~d~ o~ oc;~;~apaiioa~,

ta~Cin little account of the nc~tzLr~ o~ °` lity" o~~ use o~ the premises, and

i n n~ altogether that the premises are occupied permanently by tl~eriPfPr,~1_~nt'.c favn~ly ~~c~ t~~t the ~rer~rise~ c;an fairly be describc;~i a~ the fa.rr~ily

horrie. I~/1r Jacob`s suggested approach ig too narrow and ariificiai. i a~re~ write

Mr Peter Shaw, counsel for Rel~fo, that the critical hest is the defendant's pattern.

of life° In Levene v Commi.~sioners of Inland l~eveniae j1928J AC 217 the douse

of Lords considered whether° the taxpayer was "ordinarily resident" for the

purposes of i~icomz tax. Miscount Cave LC said at page 22~:

`°The suggestion that in order to determine whethc;r a man ordinarily

resides in this country you mint count the days in which he spends here

and those which h~ spends elsewhere, dnc~ that. it is o~~iy i~t any year the

former are more numerous than the iatier inai ire can ne nerd iv ne

orc~i~narily r~si~ent h~r~9 app~~rs to me to be without substance".

3u i,ord Warrington said at page 2~2:

"A member of this House may well be said to be ordinarily resident in

London during the Parliamentary ~e~sion and in the country during the

re~es~. If it hay any definite n~eanii~~; I should sad it means according; to

the way in which a man's life is usually oz~dered".

31 The settled pattern of the Appellant's life is to visit the Edgware ~-Iouse, as

hip ~~~~mily home, regularly each year-, albeit not at the same Cime each year, for

reasonably extensive periods of time in order to gee and stay with his family. Ita1r a aN,,,,~ a„ ~bo., F.,,af„ [`~,~:-,v..:,nl,,: ! R!: h ~h' 1-~ ]°t th

1J tll lllcil ril~ll LV11 L1 QJL W L11G 1Q1. L:9 dAA tJ 4~11~1 ctJnU ullll rtviC'titiV V'iiii VV'11ii.dly liti~:. Ldla.

:i~pu9y Judge, I consider of n~ assistance and not remotely like the present rase.IVtr 1~eripasica, for example, was spending something iike 20 to 30 nights a yearAll dll~ d_..Vd101V11 11V1d7G UL 111E 1li1CiVQ11L ll~iil.y VUI*, LAAI~ 111GtjlJilLy~ VL 111 V~1.~71LJ VV~l,iili i\Jd

single nights and involved a constant flow of business meetings. 1-~e had housesin several countries including three in France. I-Ie had significant business

lntere~ts in England but they formed 1 minirrial part of his total interests, whichwere larger Russian. Flis family did not live in the L,onc~or~ house, ~lthoug~i

they also visited it sporadically. Ike was in tie house at the same time as his

wide for only 5 nights ire 204) and 7 iii 2006.

32 In IVIr Ab~•amovich's case, his ~risits to London were almost exclusivelyrelated to his ownership o~ the Chelsea I~'ootball Club, in z~espec;t of which h~had no executive function, anc~ attendance at football ma~cl~es. Although 1n thepast hip wife be~a~l to live in England during the school term time to be with thechildren who were being educated here, and he flew in and out of England tovisit them, by the relevant time in late 2007, when the proceedings were issuedand served, he had divorced his wife, he did riot visit her and chiefly sa~,v hischildren outside term time in 12ussia ox on holidays outside England. T}ie itid~ec~ncl~ded tlidt the ~en~re o~ his rel~r;~~~hr~ ~,vrrh his rhildr~n was z~o~ inEngland.

33 Those were cages in which the court fouz~cl that the d~.t~endant way not

i zs

resident in England at all for the purposes of jurisdiction, and so the question of"usual" residence never arose as a serious issue for determination. The markeddifference between the settled pattern of the Appellant's life in the present casein relation to his use and occupation of the Edgware House, and the facts ofthose cases, provides a good illustration of cases which fall Mainly on differentsides of the line of what is and is not a "usual" residence."

(my emphasis)

44. From the above cases, I would identify the following propositions:-

(1) It is possible for a defendant to reside in more than one jurisdiction at the same

time.

(2) It is possible for England to be a jurisdiction in which a defendant resides even if it

is not his principal place of residence (ie even if he spends most of the year in another

jurisdiction).

(3) A person will be resident in England if England is for him a settled or usual place

of ahode. A settled or usual place of abode connotes sorrce degree of permanence or

continuity.

(4) Residence is not to be judged according to ~ "numbers game "and it is appropriate

to address the quality and nature of a defendant's visits to the jurisdiction.

(5) Whether a defendant's use of a property characterises it as his or her "residence",

that is to say the defendant can fairly be described as residing there, is a ga~estion of

fact and degree.

(6) In deciding whether a defendant is resident here, regard should be had to any

settled pattern of the defendant's life in terms of his presence in England and the

reasons for the same.

(7) If a defendant visits a property in England on a regular basis for not inconsiderable

periods of time, where his wife and children live, in order to see his wife and children

(including where the centre of the defendant's relationship with his children is

19

~,nglaszrl), such property has the pogenii~l to tie regarded as the fcan~ily home or his

yao~nc when in .~'r~gl`u~tct", which itself i~ ~videnc~e which r ay go towards ~lzpportia~,~ the

concl~rsior~ that England is for him a settled or usual placE of abode, a11d that ~~ is

re~iden~ in ~nglarid, albeit that ultimately it is a question o~f fact and degree v✓~e~~er he

is re~ideni here or not, having regard to aii ine fads of the case inciudin~ any

d' 'l.1 a+~ J at, d'e7 ,7~ 7.,,.ro-~ l: E'„ 'a L.,... I..~. t.~.,.. aCai>C;~,iilli~ii. Sc'ai ~u fi~ii~u'i~i +i~ tis~' icc.~~i21 rsrca ,~ y~f~ iii it s I~ ~~ca:r E~~:ry v~~ ~~ ~1~~ /.i'~'~:iii'~lY2n i0

the way zn which a man's life is a~szcally ordered.

'The present case

45. I77 the present case:-

(1) The I~e~endant was born in Omsk in the US~~ and is, and has been throughout his

t7.i•: •..1_r~ t J.. __1_•r r rr r i r~iit, rc~iuc~~~ iii ~ussizi, aiiu iS td~ u~tzi~c;i~eca i[l t'~us~ia, t-~e reSitt~~ ~n a v ~earoortl

hn~~cc~ in A/Incnnii> >hinh h k 1 F 1 G rl &.' L. 1 .d.,.,,...:1. 1.°.,a.v u.~d. ..i lvsv.~a..v vv vv iii`,ai itV i1uJ vvv'ila~.0 lvi i✓ y'a;ui7y uiiLa w'1 tilJtl Ails LI C~9l,.1tV~J 111 1d1S

evidence as the fiarnily dome, "~dhile l~/Ir ~'ovarer~kin travels t~egularly for business, he

runs his b~isinesses from Moscow. ~eoPr~IV~ining is headquartered in ~/Ic~~t;ovv anti

engages a rrlanagemeilt teams ~f aro~rnd h5 people there. tVlr Povar•eclkin has an office

there v1h~~h t~P con~idP~~s his prin~ipa? pia~;e of ~rc~rk. ~et~Pr~~~ining e~plo~s ar~u:~~

2000 people on the ground in Russia and l-~rrnenia, Mr Povarenkin also runs ~cmero

Capital, a I-Iong ]E~ong investment company which irlvest~ in Russian aiicl European

~u~~~~aiiie;~, ruin a (se~aiaie) u ice iii ivios~:ow. %ie inag spent a minimums of ~u~ ciEtys

i~~t' yt~~3r lrt P~c~ll of ~h~ 1;51 t~rrP~ ~~~~r~c in ~.uSsi?e

(2) Mr Povarenkin zs married to Irma Povarenkina, and they hive a young sore and

cia~ightet• (all of whom are Russian nationals}. Mrs I'ovarenkina and the two children,

who are educated in England, live togetYier ire England at least during school team time.

(3) IV[r Pov~renkin Mates in his evidence that his wife bought ail apartrrlent in ~,on~or~

in July 2012 off-plan, namely Flit i~, 1 Ebury ~c~uar~ in Belgravia ("the Belgravia

Flat'), aid rrloved to London in 2013 whin his son was approaching school age. Prior

to the completion of the Belgravia Flat, Mr Povarenkin's wife and children lived in

rented accommodation at another Belgravia address narriely 100 Ebury Street, London

which he describes as being, at the time, the usual address of Mrs ~ovarenkina,

(4) ~C,h~ ~3elgra~vi~ Flat, which is recorded ~~ being purchased in 2015 for £1"1,300,2 0

is registered in M~•s I'o~~ai•~nkina's n~m~ with the Land Registry, ~r~c~ ~; such is, ~n a~~y

-,,,~,~,

view, a very expensive property. Mr Povarenkin has confirmed (in a response to a

Request for Further Information) that the Belgravia Flat was funded from joint monies

of Mr and Mrs Povarenkin, "such monies being held jointly by operation of Russian

matrimonial law". There is an issue between the parties as to who owns the Belgravia

Flat. Mr Povarenkin states that his wife does. Mr Bestolov's s evidence is that he

understands from conversations he had with Mr Povarenkin that Mrs Povarenkina had

no independent source of wealth and that he therefore believed that the Belgravia Flat,

and all other UK assets purchased by Mrs Povarenkina must have been funded by Mr

Povarenkin or his business. He also argues that if Mr Povarenkin funded the purchase

this means (or at least is likely to mean) that Mrs Povarenkina holds the property on

resulting trust for Mr Povarenkin or that Mr Povarenkin would be entitled to claim half

the property under Russian matrimonial law. There is before me expert evidence from

Drew Holiner (on behalf of Mr Povarenkin) and Maxim Kulkov (on behalf of Mr

Bestolov) in relation to various aspects of Russian law including Russian matrimonial

law. The question of ownership is a complex one, raising as it does issues of conflicts

of law in the context of immoveable property in England. I do not consider it either

necessary or appropriate to seek to express a view on the matter. What matters is not

ownership, but the nature and quality of the use of the Belgravia Flat, as reflected in

the authorities cited above. It suffices to note that the Belgravia Flat is on any view a

substantial property In England, purchased with monies held jointly by Mr and Mrs

Povarenkin by operation of Russian matrimonial law. Sy the same token I derive no

assistance by seeking to draw any comparison between Mr Povarenkin's 6 bedroom

Moscow house and the Belgravia Flat, not least because there is no evidence before me

as to comparative property prices in Moscow and London.

(5) Mr and Mrs Povarenkin's children are educated in England with their son attending

preparatory school in London and their daughter attending nursery in London. Mr

Povarenkin explains in his statement that Mrs Povarenkina moved to London in 2013

when their son was approaching school age — ie so that she could be with the children

while they were being schooled in London. It follows that Mrs Povarenkina and the

children have been in London (at least during term time) for some four years.

(6) Due to the length of English school terms (and the further factor of Mrs

I'overenkina's visa status in the UK which I address separately below), the likelihood

21

i:~ th~~t ~/~r ~~ov~jt•erik..iz~a ~~~lcl t11~,ar c:hilelt~en s, ~e.ld tt~e ~~ajt~rity- (teat i;~ zrat~re t}laYr k~~~l~i

of ~,ac~~ ~t;ar ire ~,n~i~an~. i h~ e~~~ic~en~;e ~~~ t~ w~e~~~~ ~i~e an~iiy ~~e~a~i r~~;ir ~irr~~; oui ~

~c;t~c>oi Z~~•zn t~r~1e; ~;c~m~;~ 1~rorrl Iv1~~ 1'ov~~rcnl<i~~'s tirs~ ~-~i~rl~:~s sta~~rxl~~rit. 'I h~rfv° is soaz~~

di:~~ut~; a~ to w~liat c;o~clu7ion~ ~;a~7 ~e c~ra~~,~ri f~r<~rn ~;u~;r~ ~;vider~c;e. I~~ that ~;crl~~;;~t ~ r~~ila

[nererore quote what tvir ~ov~i'en~c.~r~ ~ay~ zz~ ~na~ z-~;~aru ~ti. p~tra~ra~~1~ ~~s ~~~ ~~t:~ ~~r~i

,.r„r„n-.,,„~,a-:9LUL\..[lil.id lL~

:. (~~r~i~t~, tl~~~ sc;hool hol ci~~~~, ~r~y i~.~it~ ~lncl ~1lilci~~~ra ~ith~t~ ~~4:t~.~z~n tc~ tine t~~~x~~ily

horrlc in t~o~cow ~~°, during the Eater and Su~~rr~er :school i~z~lic~ay~, w~ ~~ena

tine together at a chateau in ~'ranc~ ~~t Gaiter a~1d approxii~zately it~ree to four~.~F~~~~~ thf'„~~ ~.'~~'F,A 4hP ~~.m,rl~r. ~~I.~, .:nr~4tllxi cr~r~;~n~a f~ir~,~ ~'l~r~ctmGc I~nl~~,;tic tic ~;

~~1~111].V X19 ~1011'lf' l.Yl ~OS(.',pW,~~ J

dirty ~iai~~ii~:~l:q j

i ~;oi~sid~;r that, as ~«bmitied on ben~~li vi ~r ~s~~Culov, ~iavir~g ce~;arci iv iii w~or'ci ”"orr",

thy; ~'ac,t that ~?~~~ter i~ ~ai~i to lie ~pe~~1~ ~~t tl~e; ~;11atc;aL~ to~~;ther vrith th~~~;L tc~ t~o~rr w~;c~-~~;

ire the ~uznrner, and tl~e f<~~t that it i~ stayed that the family normally spend the

.~_,'7 ::•::~: x::~:.~. ':; ~?:;-i :; a;:~ v:: Mfr; :c~;+; ~.::; a. l_._ :::-:~:; :::c n: !': ,, <. L; ::4 I~H.., Y7. ~.. ., _.. 7.-;.; :..J ;.. o-:.6'„ ;~.

\.1A1 d9LdAAU:9 AllJd l4A CLy.9 1dA Atl1 V.5 brV VV~ LAAli lldAty .S llV9r11ix.Ci lAll36i LAlUI Ivdl A Vvt~ld+vdAARAdd lb.A e.~Ad LAA.lii.~

hip wife fled ~hildrezl staying pit what he ~:~zara~teri~es as tl~ie family home in tvlos~ow i~

at ~:ilristlnas. in any event, anti vvhat~v~x~ time may b~ spent ~t Mr i'ovar~rikir~"s i~o~~n~

ii. ~ v w.~v iP aAa~~ilei onr9ornr~t ~~ a4 ~ i ~ ~9~e -iran~rrn ui~i~ ~hA ~ it.~ni~iv.°i~a ~~'r'.zx~ ~~i~.

rri~~o~'tV o~ ti~i~%r 9~~r~~~ ~~~ P1~.r ~ifls~_~~iv~~ ~'I~jt.. w~~c;~ ~ iii i~iv view t~~7ty iO i~~

c; ii~A~zCi.f'~i~c(A ~iti t~i~ ~c0illf: 0~ ~~t'~ ~'ti"V~i~~ia~iil iiiccA ~~~c; ~;~AiaCsi~;il i~a s,~i~R~AaACA, iiilCa iilc~(~~;G,

a~; ~uz~tl~~;r adc~~~~~~ed below cazi t~roperly be cllaracteri~ec~ as a (~arraily hoz~ne9 i~ ~~~o~ the

Car~~iily home,

{7) 1VI~° ~~c~~,~<~t~~ t1l<i~~':~ ~s~~icict~~;~v is thai 1~~; c~o~:5 z~ot lz~~~~~ a~1}% bu~~i~e;~s aa~i~zcd~;i:~ i~~

~,n~la~a~, ~n~l that he c~oe~ ~1ot have any a~5~t~ ire ~;n~;l~r~c~ (t~~ol~~l~ the la~t~r i~ rr~ i~~L~e

dep~ndi~g o7~ who i~ the owner of the ~~l~ravia Flat and o~ve~~ £7~0,(~~0 ire ~hare~

~L~~-~h~s~~ in IVi~r~l~ to :lttly 2013 a5 dart of tl~e rec~ui~-~m~nts off' IUIrs l~ovare~~l<ina_'s ~1~~

T'i~;r 1 Iiive~tor `Lisa, Chose shares beiri~ Mated to ~e purchased o~lt of ~nonie~ ~ern~

11eId jointly by iVtr rind Mrs Povaz~enkin by operation of ~2us~ian laa~trimonial 1aw).

(~) 1~.~ l~fir k ovarenkin a~knowledg~;~ (and 7~~le~d ~l~✓ens), atld a~ i~ clearly tie c,a~P, ~Zi~

vi~it~ to ~'~l~latld ~~ce to visit hip wife ~~x~cl childt~en. Hip vi~it~ are t~raerefor~~ not nut o• .:_

il~(,:f~^itii~j/ ~~~(71 iill:Sa1C;~;~i a'~;i't~(iIl> ~SiiC:~] ~1:~ ~711`~111E;~;:~ ii1LE~1~1~~;1, ~Ll ~l ~ilit[CUa' C7f ~5c;e'~;OI1~1

choice (to spend time with his wife and children in England, no doubt at the Belgravia

Flat).

(9) In the years 2014, 2015 and 2016 Mr Povarenkin spent (respectively) 60, 75 and

79 days in England. The purpose of the time that he spends in England (London) is

solely to see and spend time with his family. Indeed, he was served with these

proceedings when he was in London to celebrate his son's and his wife's birthday. His

routine is to visit the family frequently for a few days at a time. The dates of his visits

are apparent from tables that he has produced, and which have been highlighted in

yellow in versions thereof annotated by Mr D'Cruz. There is a distinct pattern to

them: namely that Mr Povarenkin comes to London twice every month to spend time

with the family (that was the case for 7 months in 2016, for example). The exceptions

are during the Easter and Summer school holidays when the family spends time in

France (April 2016 and August 2016) and the odd month when Mr Povarenkin comes

to London only once (in July 2016) or three times (November 2016). This shows that

his relationship with his children is centred (certainly for a large part of the year) in

England. It will be noted that number of days he has spent with his wife and children

in England has increased each year over the last three full years.

(1U) Mrs I'ovarenkina has a UK Tier 1 Investor Visa which entitles her and her

`dependents' (including Mr Povarenkin) to temporary residence. From the evidence

before me (which was not disputed on behalf of Mr Povarenkin) an investor visa is

granted to persons (not otherwise entitled to reside in the UK) who invest significant

sums of money (the categories are £2 million, £5 million and £10 million) in

particular assets in the UK (including government bonds, share capital and loan

capital). A holder of a UK Tier 1 Investor Visa is entitled to apply for indefinite leave

to remain and/or UK citizenship after a specified period of time following the making

of the relevant investment (between 1. and 5 years depending on the level of

investment). The evidence is that this is by far the most common reason for applying

for an investment visa and, indeed, such visas are designed for high net worth

individuals who want to relocate themselves and theiz~ family to the UK, albeit that

there are other reasons why a UK Tier 1 Visa might be applied for (for example they

are more flexible than a Tier 4 Child Student, and Parent of a Tier 4 Child Student

23

~~i~a, ~vi~7i~I~ ~rou"td have been anot~~r option for 1V1rs Povar•enkina and the ~;hildren, i~z

t~aat they ~a~,~~ tc ~~ ~e~ulurly re,b~,~,~~, a~l~ ~;o ;~c~~ ~r°vide ~c~r iia~ur~ ~~rl~i~drren~

resider~~ ~~i~ht~ j. ~'~e evidence be~~o~•e me, that those actir~~ fir ~/ir ~'ov~rez~kin were not

able to gainsay, i~ that in ~xder t~ protect her elig~l~ility status under ~~ez° L1~ Fier 1

~/i_~;19 ii/Trc T~nt~~aj'~n1.:1,::11',:C~ :;^~ }9,A, u'~=✓~ij' iivl i i:ii. TiJ ~ ~,vT iiivif; tilFtii .i.C~7v t"~tty~ iil Qily

year. It follows, therefore; that Mrs i'ova.renk. na ,x~~~gr ypE~.~,~1 ar ►F~~~r t sz~ ~ay~ ,~

England in each year in order not to jeopardise her eligibility status (as Ii~r dead

accepted on beh~i~ of ~r ~ovarenkrza}, and aecordingiy it seems likely that I~rs

Povareilkina spends the majority of her time in ]England. It also sums likely that the

sQ~e is ii`ii~; ~ li~Y ~hiic~r~rr given ih~ir ages (aitnou~h the act~i~~l numbers of ~l~ys

spent by IVIr~ I'ovarenkina or the children in England ~is not in evidence).

(11) M~•s F'ov~renkina's Tier 1 Investor Visa, including I~er right to apply fog' indefinite

leave t~ ~~ air end/or U~ c~tize~s~i~ after a speciii~cl ~erioci, expends eo the i ter 1

investor's family (including spouse), and Mr Povarenlcin is a named dependent under

Mrs Povarenlcina's 7.'ier 1 Investment ~lisa. This entitles hirn to unz-estricted entry into

the UK, and dives him The official status of temporary r~siclen~e in the UI~ (fir 3 y~ar~

si~lce 2013 and extended for a further t~vo years in 2016). This is the basis on which ~Ze

has be~~i ~nterinb ~?nd spending ti:nP ~n the L1K ~in~~, 2~? ~3. when T~r~ Dovarenki~a

'~ecorne , ent~t~~~ t~ apply for ~,er~ar~ent resicle~icE/seiiiement, ter t~ovarenkin will

acquire the game right. Mr l~ovarenkin hay confirmed that they have not (at this time)

app~ieci for permanent 1•esi~ency, but has declined to confii•r~ whether th~;y ~nter~d to

do so in the future (denying the z•elevance of~ the same). In my view what i~ o~f

relevance is not any futu~•a intentXvns of Mr or Mrs ~'ova~~enkiiz, but wY~at, if anytl~in~;,

the events ~f 2O13 tell ~rle about Yheir intention at that tirr~e,

In that r~~ard I consider that the evidence supports the conclusion (and I find) that a

decision was rr~ade in 2013 by Il~r and I!/~rs Povarenkin for Mrs Povarenkin~t to move

Co London aril live there witYi their children at the very least during berm time (and

probably for the majority of the year under the Pier L Investment Visa) in the contest

o~f the children's education in England with the ~3elgravia Flat being a permanent base

in London w~~ere I~rs Povarenkina ~~Zd tie children resided Eor a ~i~l~~t~~nt.al n~rr ~~F

the year, and in all likelihood for at least 185 days a year, the Belgravia Flat being

purchased together with over £750,000 in UK shares in the context of the Tier 1

Investor Visa, out of monies held jointly by Mr and Mrs Povarenkin by operation of

Russian matrimonial law. On any view this is a substantial commitment and

investment not only in assets but in a lifestyle choice, reflecting a joint decision to set

up a home in England which I consider is properly to be characterised as a family

home for Mrs Povarenkina and their children in England, and which I consider can

also be properly be described as Mr Povarenkin's home in England.

46. In the above circumstances, and whilst it is clear that Mr Povarenkin was resident and

tax domiciled in Russia at all material times, the authorities recognise it is possible for

a defendant to reside in more than one jurisdiction at the same time, and England may

be a jurisdiction in which Mr Povarenkin resides even if it is not his principal place of

residence. This is just such a case.

47. I am satisfied that the circumstances that I have identified above demonstrate clearly

that Mr Povarenkin is also resident in England and that Englalid is a settled and usual

place of abode for him with a degree of permanence and continuity having regard to

the facts that I have already identified, and in particular that:-

(1) His wife and children have, since 20:13 (ie some four years), resided in a substantial

property in England, namely the Belgravia Flat, for the majority of the year following

a decision, and life style choice, taken by Mr and Mrs Povarenkin that iVlrs

Povarenkina and their children live in England during the school year whilst the

children are educated in England (no doubt over a period of many years), with the

Belgravia Flat being rightly being characterised, in my view, as a family home in

England (and probably the family home not only for Mrs Povarenkin and the children

but also Mr Povarenkin, given the limited evidence as to the time at which Mrs

~'ovarenkina, the children and Mr Povarenkin spend together at the house in Moscow

as opposed to the time they spend together in England).

(2) Mr Povarenkin spends substantial, and increasing, periods of time in England

since 2014 rising from 60 days through 75 to 79 days. This is clot a point about the

ilurnber a~ da~vs in the i~ri5dictionq or a "nurriber~ ~arri~" rather it is ~boi~t the reason

t~or his vi~~l:~; anc i4~.~; naaali.~y ~~nc~ n.ai:ure o:f these visits w~,ic°h ~~re r~c~~ oily r~g~~~~~°, ~~~t

personal, iri order to sper~c~ time with his wife ar~d children in L,ot~don in the F3cl~;ravia

Flat, r consider ire this 1•egard that the centre of i~r ~ovarenkin's relationship ~~~th hip

wife and cl~ildret~ i~ ~aroperly to be identified as ~;n~land on the evidence bef-or•e me.

(3) The nature of Mr Povarenkin"s use of the ~3el~;ravia Flat chai•acteri~e~ it a~ a

residence re~ardle~~ of who, i~ 1aw, owll~ it. It is not used by hurl as a private hotly

but very much as a home, not only for his wife and children, but I have no doubt also

for him whilst he is in .England on his re~iilar fai3lilial visits staying with ~iis farriily.

His use of the Belgravia Flat is not infrequent, intermittent, or generally fleeting, as

was the case with ivir i~eripa~ka, but regular, Frequent anti ox ~ub~tance, anti the

~~~~~~~a ~~u~ l,u~ u~~,y ~~a~ ~~~c ~:~~arae,~ci° vi Lu~~~i~iti~iiy aiiu ~erm~rlerice, bur. ~~ loo does

iCs use by dim as well as the rest of the farnil_y. The 13e~lgravia ~ldt pan very rnt~ch be

described as a "settled or Usual place of abode" of Mr Povarenkin.

(~) ~-~i~ ~✓i~its tc England follow a regular and distinct pattern cf life with hire c~r;~ing

to London twice every month to spend tirrie with hip family (for example that way the

case for 7 months in 2()16), the exceptions only being during the. Easter. ~lnd Summer

sciriooi hoiici~ys wtlen the family spends time in F~ra~lce (April 201.6 and August X016)

acid Y~:e cd~ rr:t;nth ~av~e~ I~R: ~ova:enk::. ~~e~ tc ~,c~~Jon c~ly o~~c~ (i~~ Jury 2~1~} or

Three iirnes ~I~iovember 20i~j. inese are very muc;i~ personal visits to be with ~iis wife

and family and show a regular and distinct pattern of family life in England on a

regular, substantial, ar~d on~oillg basis.

(5) I~r ~ovarenkir~ and his wife, have expended verb ~ignifi~;ant sums out from monies

held jointly b~ operation of l~ussian rnatrirnonial law to satisfy the requir•emer~ts of a

UI~ 'Pier 1 Investor Visa and create a perman~rlt way of life for ~`[i r I'ovarenkin and hrs

family in England, that has not only led to the establishment of a family Dome in

England, but has also led to M~• Povarenkin, end the remainder• of his .family, havitlg

temporary residence ire England, with the potential for them to apply for perrr~anent

residency in the future. This invesrrra~~,t in ~n~lish ~,•~~~t•~y ~~,,~ ~~SPr~, a~~~ ~~~

r[~lnrafiinn nf~ l!/rrc 1~n~~arnnlri~, and thF ~},~l~~rAr, to Y ~,nr1~„, ,1. !,, d,_~_..d..._.,__ ~> _.__„ a.,,....,.~..,.. ...... ~a... ~,.~...a..~,. ~v ~,~~uv..~ i:uu viii iiisJi, u~iii a

'p~br~I~:1.~z~ c__e~ +~J~ao~~~vl~.s e:e,t.,s~l~li~ ?tase'.t ii~£'.Si~ii. t.iiv3:.u'9 vi1 ~ilL ~al't l%~ ~~iT~ itA1G ~1~'S

Gb

Povarenkin in 2013, at the very least to establish a home in England where Mrs

Povarenkina and the children would live for the majority of the year for the many

years of the children's education, and Mr Povarenkin would use as his home when in

England, spending time there with his wife and children who had relocated there (at

the very least) for the furtherance of the children's education.

(6) Mr Povarenkin spends time in England not on a visitor or business visa but on a

residence visa under the UK Tier 1 Investor Visa of his wife, and as such has

temporary residence in the UK for immigration purposes, with the potential to obtain

permanent residency.

48. In such circumstances I am satisfied that Mr Bestolov has not only a good arguable

case, but a much better argument on the material available, .that England was a settled

and usual place of abode of Mr Povarenkin at the date of the Issue of the Claim Form

taking into account the settled pattern of his life that I have identified, and that he is

resident in England within the meaning of Paragraphs 9(2)(a) and 9(3)(a) of Schedule

1 of the CJJO.

Substantial connection with England

49. On the basis that Mr Povarenkin is resident in England the next, and separate, question

is whether, for the purpose of paragraph 9(2)(b) and 9(3)(b) of Schedule 1 of the CJJO,

the nature and circumstances of his residence indicate that he has a substantial

connection with England.

50. In this regard it will be recalled that paragraph 9(6) of Schedule 1 of the CJJO

provides,

"In the case of an individteal who—

(a) is resident in the United Kingdom, or zn a particular part of the United

Kingdom; and

(b) has been so resident for the last three months or more,

the requzrenients of sub paragraph (2)(b) or, cis the case may be, sub-pc~ragraph (3)(b) shall be presumed to be fielfilled unless the contrary isproved. „

27

5i. l~.~;coic#i~~~lv 9 i~l i~~;la~ion t~ she ~~~;orarl li~i~, ~ara~ra~7t~ 9(Ei~ ~i~~e~; ~~i~e t~ a ~~r~;~~a~~antiGn

i~t~P ~N6~f~.rc~ ,ari i~~<~~vi~li~i.l l~»~; l:,r~r'n rt_~ic~~~~it f~~>r t~,ir~c~ r7jr~ritFi~; nr ~Tir~rr~ ~~jr~ S,~i,~,~ ~nr;;~i

coi~~re~tior~ ~;~s~c~itic>z~ witl Lie r>re:~um~;cl t.o (~e ('ulf'ill~;c1 u~~l~;~;~ z.'r~e t:oclt~~ar y .M; r~rc~v~~ci:

`~~, In tl~e pxe~ent ~;~~e I`J~r ~eac1, o~ beh~~li~ ot~ i~/[r ~~varezzkin, cx~z~essly accepted cftzri~l~

the ~ours~ of the hearing that. on the faits o~ the present case i~~ I ~ver~ Co concli.i~~; ghat

iY~x Por~at~en?cin ~r~~~ ~es~~~nt ~n ~,.i~lan~! then nothing had ch~~n~e~:1 in the ;~~A~ee ~~a;~x~z~h~

priot~ to ~;or~nr~zen~er~etlt of the proceedings, no~~ laced tl~le broad ~tat~~s ok~ ~i~ ~o~t~~t

P. ;; l.... S;r=r'i(l r~ C~ii.>>.~~i~... _ s.~in~i+, n~~ eil!A:il~' :li: ~~ l~p.ae. J'~;:L 1:.: :.!,,. ..., ., ,... ~S~ui

preslirriptio~ a~~lieci. i-~~e ne~ertla~;les~ ~i.d[~Ynztted ~}~at tl~e pre~~~r~ption ~ho~al~i b~

(~tS%1_C?t"~~iC'.~~ r)rt f~f~ f~,i~fi~ rF>j~iir7c> i~r7nr~ ~;~rnil;e:r f:ir~9nr-6. (in f.r-~v~t~~~: n4~ ii/9w ~~n+,~-,vF-,a,lr;p~~s_

,',OC1C:,6',11J11~ ~b'1~ri ~LISSiu G;G~1pfICi;Ci t%Ji~~1 ~,il~luilC~j t0 tilOS(; I'Liic;u il(~Oil uy illiii tie ii1C

cor~t~ xt of ~~e~icl~~lc.c;,

~~. ~~1 t ie prese~~t cage, got only ~3oe~ the pres~~rnption a~p1y, but [ con~ic~~r that tie x~za~urs

ttl%l'd 4,%i~C',ldlli~`lcllll,(~:i l)l 1VAA ~~V[111;11tClll~b 1C~1l1Gllle;t; 1CICIYC,iILL, UVf:t~~V(1(;(1111T]~1~/~ r[~a[ [](; (1<j~

a substantial connection with ~;n~1~r~c~ having reg~~r~ to the maCtcrs that ~ ha~~~ alr~a~jy

ider~tifiec~ at para~ra~hs 45(x)-4S(11) aid ~k % ~bov~,, anti C~lat fihis ~;ecox~d rE~c~~iremexii

:~ ¢L1~~:IIFa'.d~. ~.1 j7ibI~~1CU1cli ~a1E'I'~ 1~ [il% a3f'i4~T'~i~'iu i i~at VJf11Cil iii ~i :~;ii~_iS(~Itl~l~li ~IYIC~

Yi;i'Aiiriiic;iti ia:i:~c;i iit a_~i1~1~t11U ~JU1l.Alit°,(;Cd Ult"l O1` ~llltll It1~~LI11I1U111211 a`°i`it;l:i ~I't;~~1T'CIlf;56s OX

w~ao owns the teat in law), whi~la forrn~ a fatiaily ~or~a~ ~=~,ngiar~cl not o~~ly for his wife

and childz~er~ ~b~rt also, as alz•eady ider~ti~~ied, fo~~ tVtr ~ovarel~kirz, Mr Povarenki~~ ~~z~icl ~i~

wife; h~~vin~, ~n~lc~c ~~ li~~~iyle; c~hoi~,~~ 10 ~;~t ~~~ a ~~~~rna~~cc~~. ba~~; anc~ ~zc>~~ i~~ ~;r~~IG~nc~

whilst: th~~r ~~hildx~en are educated ire the (1~{, tl~lat home ~ei~z~ u~~,~1 zlot only key 1V~r~

~'~varenki~a and tl~e childr~;~ gut also try IV~r ~'ovar~n~d~~ nn lu q [~requent anr~ t~e~;lr~az•

vi~it~ to ~ r~~laalcl to s~je~lci f~~~r~iiy irne with them, as part of ~arr~ily life in ~sn~lanclo

~~ac~a ~ub~tar~tial corinectio~l with Ex~gl~l~zd i~ also reelected in the Crec~uen~y ~lnd

regularity o~ IV~~~ Povare~~in'~ ~ta~~ iza the home in ~;n~;land and the overall nuz~b~r oaf

stays ea~~a year• i~ such homy. It i~ also set a~ain~t Che backc(rop of~ Clue s~~b~tantial

inve~trnent IVIr and fvZrs Povaren~cin have rraad~ izl ~II< pz~o~erty ~~nc~ [~~~ ~l~a~~es~o~~t of

~piiil it? ~iri~7?r~;7i~~1 ~i~~t',~~ :;; f~2:, ~,':):'.~('X< <Vf~ fhF~, -~..~1(,'~ 1 ,Y~,~~r.,,~.>„o ~/t' , 7 r(,~„~- ~ Al v ti.)I.11A~✓Al 1, V 19 Gi Ul~ld I.11 l✓lA

i4a 4~. ~fc Cl~ ~7.k~iitl lA.WAl.A4.114y LAllil 4i UAlil k.t.

~i)

54. In such circumstances I find that Mr Povarenkin is domiciled in England for the

purpose of paragraph 9 of the CJJO. Accordingly this Court is obliged under Article

4(1) of the Brussels Regulations Recast to accept jurisdiction, and I therefore dismiss

Mr Povarenkin's challenge to jurisdiction there being no discretion to decline

jurisdiction on forum convenrens grounds in such circumstances, as was accepted on

Mr Povarenkin's behalf.

55. I would only add that I consider that the conclusion I have reached is entirely

consistent with the "respect for the principle of legal certainty", the "predictability of

the rules of jurisdiction" and the legal protection of defendants who are generally best

placed to conduct their defence before the courts of their domicile (as defined), as

referred to by Langley J in Cherney v Deripaska, supra, by reference to Owusu,

having regard to the fact that Mr Povarenkin does have a settled place of abode in

England and has substantial connections with England, as a result of which Mr

Povarenkin is domiciled in England and as such best placed to conduct his defence in

this jurisdiction in relation to any and all civil and commercial proceedings that might

be brought against him in this jurisdiction.

56. In the above circumstances the alternative basis of jurisdiction alleged (jurisdiction

agreement within Article 25 of the Brussels Regulation Recast) and Mr Povarenkin's

challenge based on forum conveniens do not arise. However as I have heard full

argument on them I will address such matters below.

Jurisdiction Agreement -Article 25 of the Brussels Regulation Recast

57. Article 25(1) of the Brussels Regulations (recast) provides that:

"If the parties, regardless of their domicile, have agreed that a court or thecourts of a Member State are to have jurisdiction to settle any disputes whichhave arisen or which may arise in connection with a particular legalrelationship, that court or those courts shall have jurisdiction, unless theagreement is null and void as to its substantive validity under the law of thatMember State. Such jurisdiction shall be exclusive unless the parties have

29

agreed ~therwYse. 'I'~~le a~~•ee~rnent ~om~fer~i~1~ ju~~isc~iction shall be .... in writi~:~~r evi~Pnc~d in v✓riti~?g." (~~phasis

a~~~~t)_

58, ~s his ~Ir~~dy c~een rloted9 E nd as is common ground between the par•tre~, if Article 2.5

applies, there is no discretion to decline juri~ciictiorl ~~ for~~m Eton convenze~zs grounds,

uifu iill; ~C)Ui'i 131U~! ~iV~ ~i ~Ct~i ifs iiiC Ci~V~itl rl~1'LCtiidti~ dfliG tsUll.i1C ~1;:"i~:11'.,'liL3T1 ~~e~

I1V1S ~'A c~ Ors v Capital Oil c3z CTas Indczstries [2016] E`GNHC "1956 (Comm), parse

[44]).

S), ~r T~'~rt~~~ nn h~.half of jar ~~.~fr~]n~~9 m,~~Pc YhP ~~sint9 ens do rl~~rl~ ;~=~l~t9 th;t thr*,

~u~stion of whether a ~ontra~.t ~~ntain~ a jurisdictiUn agreement and what that

"If7Y?P.t"Y1Pil9" fnPµln6 rC ;~ mslfi4Pr of ~nntr~ic~tiu;~l r~ntPrnra4~tinn :~nril~~in t~v nrin~inlac ~~f

interpretation of the governing law of the contract. ~)ndei• English law9 that, of course,

ret~~ire~ an ot~jective approat;h a~plyirig ~h~ well kn~vrn ~rinc~pl~;~ of ~;ontracCual

construction that have been identified in cases such as IrzvesP~r.~ Cr~rraperas~atz~~t

S'cherne .I,td v West Bromwich Buzldin~,~ Society [1998) 1 W.L.IZ. 896, Rcti~ty .Sky S~ v

Kovkrni~~ Bank [2011] 1 WLR 2900, ,~rrioCd v B~itty~ [20151 AC 1619 and Wood v

~'a~zta InsuYance Services Limited [2017] U~SC 24. IVIr D'Cruz in t~ii~ regard

lai~hli~hts the follo~vin~ points:-

(1) The court will ascribe to wordy and clauses the meaning which they would

convey to a reasonable person having all tale background knowledge which would

reasonably have been available to the parties in the situation in ~hi~h they we~~e at

the time o1~ the ~on~rac;t.

(2) The court will not approach the task of construction with a rigid concentration

upon individual words but, rather, will adopt a construction that will. best effectuate

the intention of the parties, to be collected from the whole of the agreement, with

~z~eatex~ ~•egard beizlg heel to the dear intentions of the parties rather than any

particular words they may have used,

(3) Coin~ercial contracts must be construed in a b~isiness Fa~llio~a and there ~n~~st be

a~cri~ed to the words a meaning that would make food commercial sense.

iii

60. Mr D'Cruz also draws attention to the fact that as far as jurisdiction agreements are

concerned, the Privy Council has recently confirmed in Vizcaya Partners Ltd v Picard

& Anor [2016] UKPC 5 that it is possible to imply a jurisdiction agreement into a

contract where actual consent can be demonstrated from the context with reasonable

clarity.

61.. Once again the burden is upon Mr Bestolov to establish that there is a good arguable

case that he and Mr Povarenkin entered into an agreement on jurisdiction which

complies with Article 25, which means the better of the arguments on the material

presently available as opposed to a balance of probabilities standard (see, for example,

Goldman Sachs International v Novo Banco SA [2015] EWHC 2371 (Comm) at [77]).

62. It is not suggested that any jurisdiction agreement exists on the express words of

Supplementary Agreement No.1. Instead reliance is placed upon paragraph 2 of that

agreement which states (in the translation provided on behalf of Mr Bestolov) that it is

"concluded pursuant to the partnership agreement dated 1 June 2007 .. in respect of

the joint development of the projects in Republic of Sakha (Yakutia)". It is submitted

that from this, and from the title to this agreement ("Supplementary agreement to the

~artnershi~ agreement" (emphasis added)), that Supplementary Agreement No.1

forms part of the Partnership Agreement, and that accordingly any dispute resolution

choice made in the Partnership Agreement would apply equally to Supplementary

Agreement No.l. I accept that such a conclusion would likely be reached by the Court

-but is there any such jurisdiction agreement in the Partnership Agreement?

63. Mr D'Cruz relies upon the terms of paragraph 2 of the Partnership Agreement and

what is there said about English law. It will be recalled that there are some differences

in the translations thereof obtained on behalf of Mr Bestolov and Mr Povarenkin. For

ease of reference I will set them out once again:-

(1) (Per the translation obtained on behalf of Mr Bestolov):-

31

~`2 "I~'he afoz°said corr~p~r7y shall be inco~~orEitect under English lam aril shall~~ s!1bje~t ro pie i•~;g17ire!~nent~ n~ ~~?gl~~h lam. '~':~~ ~'artners ~~~°knc>~n~1e~bP thapail provisions of the reached ~~r~~ments will b~ retlect~ci in the company'sc;onstrtutive documents. 'T"'he aforesaid company shall be the pole ultimateb~z~eficiary for' the running projects. any other corr~~a~iies inco~°pasted forn~t~ject nt~~°~~~e~ t rtt~c_'r ~2ir~~~~3n law p~' ~r7v c~Yher l~~w ~h~ll 17~ 1.~3fD% riwn~ci Bev

the point company. Ali issues of joint ownership and cleeision rnalciizg ~roee~swill be resolved at thy,joint company level."

(2) (e'er the translation obtained on behalf of Mr Povarenkin):-

"2. This company will be created under English law and will comply with thei~.e`.~L's1ii,T2leTIt~ v~ iT2~~i~sii iu4~'. a ~'ii; puitilf;i ~ iCC0~ii1SC iildi viii ~~"t2 ~~ii~Vl~i1011~ Oi

i~i E: i~~iv~liv Ai ~.~i ~x/~'il~;il iiii v'E: !v'v~li ii, i~viia,'v v✓iii vE' v✓ iiiE'ii iii~v ii3i, liii:vi'~:~vi"uilvti

documents of this company. This company will be the sole ultimatevas'.. iias°.il`;it~'.si vi iiit. tc l~e~:~„t 1'r.~rl h tl-,a tr o,,,-~.,uiviiiw va,iu~ iiuii~~,u. niiy v~iii,a ~iviid,~-~yvc C~uiiuuiilcS

v✓ail`;ii vd".ai vv ~vJi~iiivii v`y' ~'uJ~iisii vi uiiviiii~i i~iVv VJlii v,ivii~ ivii~IG iv iai2

~viiii viii uii r~ii 1~siic~ is aiuiii"` ~1ic ; vi►i~ iiviuiil" ~ dtiii CicGtS Oii-IiiaiCiii

will b~ lnad~ only at the lev~t ofthe joint company."

E4~. T✓It~ D'Cruz identifi~;:~ from such provi~ion~ that by paragraphs 1 and 2 of the Partnership

Agreement the parties agreed:

(1) To incorporate the joint company;

(2) that the af~resai~l t;~mpany ~hal1 be i,~~,:~rpor~tetil under ~ngtssh 9_~3i~ ftn~ shall ~e

sii~ject to r~quir~~rents of ~r,~iisi~ law,•

(3) that the aforesaid company shall be the pole beneficiary for the running projects;

and

(4) that all issues of joint ownership and decision-making processes wi11 be resolved

~~t the joi~lt c;orrip~ny level.

E~. iV1i~ D'Cruz tlZen develops hip subrrirs~ion5 as follow. ~-le ~ubmit~ thaC the requirement that

the partnership operate thraugh a joint venture company that was to be incor~or•ated

ender English law and which was to be the sole benefzciary of'the partnership assets (i.e,

the relevant mining projects), shows the importance the parties placed on their joint

venture being regulated by English law, and the company being subject to the

requirements of English law. They also provided that all issues of joint ow~~ership ar~d

decision-ma~cin~ pro~esse~ be resolved at the company level which Nlr I~'C:ruz ~ubrriitted

3

amounted to them recording that ownership issues were to be subject to the requirements

of English law.

66. Mr D'Cruz identifies the next question as being, applying principles of contractual

construction under English law, what (if any) agreement did the parties reach about how

their disputes arising from the partnership were to be resolved. He submits that the

answer is clear. A reasonable person would, it is submitted, take the parties to have meant

(and intended) from all this that they wished all their disputes relating to the partnership

to be subjected to the jurisdiction of the English courts as, of course, any dispute arising

in relation to the operation an English company would have. to be anyway (irrespective of

any agreement). Applying a commercial and practical approach, the parties considered

choice to incorporate an English company as the vehicle for their joint venture cannot be

taken to be an end in itself. That decision simply reflected a broader and more

fundamental commercial intention that their relationship should be subject to the

requirements of English law. Subjecting the relationship to the requirements of English

law, must, it is said, as a matter of common sense, apply not just to the law governing

their agreement but also the method of resolving their disputes. The fact that an English

company was not incorporated does not detract from this broader intention as to how their

disputes would be resolved (which, of course, must be judged as at the time of the

Partnership Agreement and not after).

67. It is then said that the passages of the Partnership Agreement referred to above evince a

clear intention on the part of Mr Bestolov and Mr Povarenkin that their disputes should be

subjected to the English courts (primarily as a matter of simple contractual interpretation

or, alternatively, to reflect their obvious but unexpressed intentions). Thus, it is submitted,

this Court has jurisdiction over Mr Bestolov's claim against Mr Povarenkin which it

should accept under Article 25(1) of Brussels (recast). Certainly, submits Mr D'Cruz,

there is at least a good arguable caseto that effect.

68. It will be seen that Mr D'Cruz relies upon English law at various stages of his argument,

in particular it is an integral and important part of his submissions that the Partnership

Agreement is governed by English law. This is an issue which would also have been

relevant to I~r Povarenkin's application in relation to foram non convenier~s (had that

arisen). It makes sense to address it at this point, albeit it is well established that the mere

33

fact that an a~re~ment is ~ove~~7led by ~n~lish law does not thereby ~rriean that there i~ an

a~l-ee~nent ihai tine ~~~1i~h courts have jurisdiction for the t~~ar~ose~ of ~xtic;le ~~~

Tlae law a~~licable to tie ~~reements

~Q ~~ .a.. ~~a);:~.u~~~ ar.,~~nr7~r~orr rirvnr 4n "1 "7 Yl n~w~h~« '(1(1(1 / Ga„w I-.;r,L, a~ TD,_ Y Y➢,. Y.. e.°__.v,...~ uvr.c Yilvi iv i i ~via.~.iiii~~l irv> ~cAl.bca vvi~~~,ti L c, raiJ~it' ~ ~~~~..Ila,b3~Ji.

(I~o. 593/2008) took effect), the question of applicable law of the Partnership Agreement

i~ governed by the ~;ontracts (Applicable Law) l~ct 1590 (the "1990 l-~c;t"j, ~✓hichincorporated the Rome Convention. Pursuant to Article 3 of the Rome Convention, a

contract is ~ov~rn~;d by the law chosen by the pal•~i~;s. ~-lo~vever the "choice must be

expre~~ or demorn~trated with reasonable certainty by the tez•rns of the contract or the~'n rv~i+r~ L-~4-I~. .. 99

~.LL l~U111J 6Cti 1l. C.J lJl It 1C~ 4~C1JC%

7(). In construing the Roane Convention, the Report on the IZotne C.'onvention by 1 rofes~or

Mario Giuliano a~~ Professor Paul L,agardu, t3J 1981) I~10 C/282/1 (the "~i~iliano-~,agarde

kLeport") may be considered i~ ascertainirr~ t~~e rrYeaning or effect o~ any provision of the

~orr~e C_onv~ntior~ (sFe seEtion 3(a~ of the 1990 Apt).

'71. The Giuliano-I.,agarde deport (at 2 2/17) provides, amongst o~~zer matters ~hat:-

••The choice o~ lam ~~y tta~; ~~rrie_,s ~,vrll of~~n be ex~res~ bar the ~~::~~er:t:c:::ec~gr.ize~ ~hvpossibility that the Court may, in the light of all the facts, find that the parties have madea zeal choice o~f law although this is slot expr•e~~ly Mated in the contracC."

~Iarious ~x~rrxples are then givem for example ~Yandai•d -Form contracts knov✓~ to ~egoverned by a particular system of law, a previous c;otirr~e of ciealiri~ whez~e the applicable

law has been expressly chosen, or an e~pre~s choice of law in re(~ted transactions

between the carne parties.

'72. however the Report there provides

"T11e article does not permit the court to infer a choice of law that the parties might havemade where they had no clear intention of making a choice. Such a situation i~ governed~y Particle 4".

73. Article 4 of the Rome Convention, provides that to the extent that the law applicable to

contract has not been chosen in accordance with Article 3, the contract is governed by the

law of the country with which it is most closely connected. Subject to the provisions of

Article 5 it is presumed that the contract is most closely connected with the country where

the party who is to effect the performance which is characteristic of the contract has his

residence, or where the contract is entered in the course of a party's trade or profession,

the country of the principal place of business of that party. Article 5(5) displaces the

presumptions in the event that characteristic performance cannot be determined or if it

appears from the circumstances as a whole that the contract is more closely connected

with another country (as to the applicable principles see generally, Dicey &Morris at

32R-039 to 32-080).

74. The Rome Convention principles were considered in British Arab Commercial Bank v

Bank of Communications [2011] EWHC 281 (Comm), where Blair J noted (at paragraph

29) that the Rome Convention rules should be looked at from a broad Convention-based

approach, and that Article 3 requires a real choice which the parties had a clear intention

to make. He continued:-

"A tacit choice must only be found where it is reasonably clear that it is a genuinechoice by the parties (see Clarke J's review of academic authority in Oldendorff vLihera Corp ~1996J CLC 482 at p. 505-6, cited by Potter LJ in Sarncrete EgyptEngineers and Contractors S.A.E. a Land Rover Exports Ltd [2002) C.L.C. S33 at[26 — 27]). It follows that both parties must be shown with reasonable certainty tohave had a common intention, though I consider (in agreement with Mr DanielToledano QC, counsel for CBS) that it is unnecessary to distinguish betweensubjective or objective intention in this regard. The fundamental question is whetherin the absence of an express choice, there was nevertheless a real choice."

75. In the present case, and in addition to the points made by Mr D'Cruz that I have already

identified, there is evidence from Mr Bestolov that Mr Povarenkin and he "agreed from

the beginning of our discussions relating to our partnership that it would be subject to the

requirements of English law" and that (based on his assertions as to what is said to

emerge from the text of the Partnership Agreement) there was "an understanding" that

they "would never seek to resolve disputes in the Russian courts but that ouz• disputes

would be subject to English law and t11e jurisdiction oi~ the English court". Mr

Povarenkin denies, in his responsive statement, that there was any such agreement ox

35

11ilC~P~'`,~~,1.~1C~11~F`,y~~ cl:ti:9{;~~lil~ ~PIcl~ 1~ ~~1~;TE.; ~li1C~ i7 f;(;d1 ~l~%1C;:;i(lf~l"11~ Ol1 ~t()~)~1~ t)t)2t; (G14V ~S11C~~C)T"

~uri~~ictioz~z ~tl~ i~art~~e~ wo~~id ~~ir~c~o~ihtec~ly have rr;c~~~c~e;ci ~~~ch ~~~?r•e~~~ent~; ire t~7c rF~l~:~va~rt

cioa u~ne,nt~~),

~~~o. ~ aiia ~~o~ z~~ a po:~iiion ~o rE.~soive iris con iici or evidence. itaez~c i~ ~o~~~lethin~ to be said

~~nr 4{~7H rjnrv7t S~7-~~itr it 41.7na~n c, nw. ~., c~, r. i-, ,.vr,, .. .-, ,, .,o- .. ~~ w„!„ -,, ,1:..~,.. ~e i~J 'L... ,. Y ._~~iv ~viaib X11 cM~ xi IA AI.d r✓ ~VV Cl.j Ully .~1S 4..il U~A4.. l.f f~l. ~l (. i./A lli j(,il 1'}I ~IJiiiil~ ~~ 1/1~~,1,11[ ii~~'/C' ~I(~(~eT

recorded e~piressly in the Partzler~hi}~ Agr~errient, ~-~owevez' aga;n~t t.i~at the ~'~rt~iPrst~i~a

~reez°~ent °~~~~ cl~a tecl ~;y I~r ~~v~~rer~.l~i~; who ~~~ 'riz~ve ai~~eacly ~iateci i~ nog, ~~ zar a~ i

arl~ aware, a lawyer aild parties often fail to address (at lean expressly) a choice of lava i~~

t~"lf~,ll' ~;OTl~t~[;p~ E111C~ ~~l~tt 2T1u~/ ~)~; ~iC ~b'K,'i li ~,Flf;i"L I4y ~l I'(;cl~ (;AlOICf; i}`1 iubY'. tj-$C~ili~1C)Cl~i~~~/ l~i

I'ovarer~lcirl hiz~riself ~s~e~~ts that the ~'artn~z~ship agreement ~lic~ zlot x~e~:o~~c1 all C11~, terxn~ o~4 li ri .i rs-c.~ .~.-w .~ o-. 4~ . <.. b L. .. b d. Y.. .. s.,~ ...,_ _. ,_ r. Y,. 7 :.,_.. ~.:._ "_ _. _ _ _ _ it If Yl _ _ Y / i t ~ rui~, a~,avc.iixcxa~ iii uict~ ~itcac wCtC l)U11~dL~Utl~ u~JUll, lbll ~C;ilUlOV ~GtIlQ IIIS ~7dCLI1~I'~ LC1ilL ~7+/~C~

YlflY a(l(~Y•H~~~~1 ~(i t}"~e ~aA'i;iu:Sti,~i ta~A: Piii~'Tii.

~~~, 1 [~C)il~iiClPi' 9}~~tf 9~1G O!1~~/ ~!iPF', F`Ol1T1.1~1[10:: ~~J:" T,°J,'1~iC~f;:"111 `JJ~lf;t~lf;: t~l( ~i~IT'~1G~ i"1~1'J', iz~lCe~ ~t

r~;~~l c11oi~;~; t~ I~~w, althc~t~~t~ ~~ot oXle ex~~t~e:~tily ~t~~ied irl the ~'artY~er~tli~~ ~~reernenY, z~ a. ,.

COIiS1C~~,~dt10t1 ~~~ Tf1~, f'.X~t'f,5,~ j~iiilc n~~ Y{i~ ~~l1~Ilvs'~;.?.~ f:~~.:,~;::;~;:~ ~llaC.~ :.~2 s~~,r~' ~ law- ~.i Cxx ii„iatux

paragraphs "1 ar~c~ 2 thereof. This is, ixi any event, the area that IVIr D'C~'rliz 1~oc~iS~ed upon

i~~z both 11i~ ~wz~it~en anc~ oral s~ibmi~siorl~.

s~ ,,c~~ I7 f)~iP'dP,l'~l~")ti ; O~ l:~lE; ~~ll'i11E~r'~~~i7P~i AcrrF.F_~7e~t~ t37a e~ariir~c ;u'C:?:C~;,;~ I~~:~:; :~;TP~'f;~>v, dA 1 j' ~j' """""'•" ' r•~~^ ~~v•.• lUdl llV Al y {.L AA I.i

r nn. n. ~.~ 4., .~~~..... ,......s ..u~,Q,a:~Av~A, ~.v iCtt..v~~v.taic ~ )Giiii ~Vtil~atl;y ~lC1Cl ~7Ur~Ll~lllC CO dal"a~i'~1~7~1 G CC1~it C~OITIrJc`lZl~ ~IOI~IC!

~e iaacoxporat~cl wilder ;'~,~glish law grad lie sia~ject t~> (or comply wit~a) t~~e ~~ec~uirecne~~t~ of

~,n~lis~h ladv a~~~ alb the provi~i~z~~; of a~reerr~eriC~ whic;~1 1~Xad ~Per~ ~~~a~;~ed wo~~l~~ ~c

~~~ittera into tl~~ iil~orpoz~atio~ ~foc~~me~~~ o~ tlae ~;o~~~pa~y. T'(~at co~n~any was a~r~ec~ tc b~

t~a~ soiL uc~c~~•ii~,~iary nor i.~le runnit~~ ~roje~t~ azlci °a.ii i~~ue ~ o~ joint ow~~;r~11i~ ~~n~l

cle~;isiox~-~~1tl~~i~~~~ ~7~0~ e~~~~ +:vi11 lje ~~;~yolvec~ at t~~e jc>iz~t ~o~rl~ar~y le~,~~1".

79. [ consider t1~aL the sk~ort an~w~x is t~aat the n~er~ fact that a company Thai i~ to be

incorporated is ~oin~ to be incorporated under i~,nb1is11 I~~w does riot gay anything about

the law appl~cal~le to the ot~li~ations in~;t~rnbei~t L~p~~~ tl~e individual pa~~tie~ to tie

~'ar•tner~t~ip ~~~~~ern~nl. I~~q~~ally ~ do not consider that tl~e fact t11a~ ttre holding cc~r~,nanvv _.._"1""""J

L[I~l`L ~Nt~."i k'-r1~V1~ti~l~~CJ WC)11~.C~ ljP, f~1C', ."iO~E; 11~P~9YYlA~E'. ~1P9lP~~iC'.i,tt"V (l~~ 9hf' r~1rnir~r~Pc and iziniil~l nvxrai

\l1.A ll.~ i/i ltl„II1.((A1 1.1li {111~tiI IS.~q, \Nllt lllfa l' Ifi(fAhN IA'fA' l7/ll/FaxaF~ll 11'l/ xdllC .r t :. el I•~tsy~ ~~a• d~vi `Jt ~l°vt 1~~ .. .e ~

✓J v9

says anything about the law which applies to the obligations set out in the partnership

agreement. By the same token, the reference to "all issues of joint ownership and decision

making processes will be resolved at joint company level" is, in my view, referring to the

method by which decision-making will take place within the potential corporate structure,

ie at the top level of the corporate structure, but again I do not consider that this tells one

what law is going to apply to the obligations contained in the Partnership Agreement.

80. For the purposes of this jurisdictional hearing, I do not consider that the evidence

currently before me supports the conclusion that there was a genuine and real choice of

English law to govern the Partnership Agreement for the purpose of Article 3 of the

Rome Convention. On an application of Article 4 thereof, Russian law would apply to

the Partnership Agreement and Supplementary Agreement in circumstances where Mr

Bestolov and Mr Povarenkin were resident in Russia, and the Partnership Agreement was

closely connected with Russia.

81.I say no more about the law applicable to the Partnership Agreement and the

Supplemental Agreement given that the law applicable to these agreements will be a

matter for final determination in the action, and it would be wrong to determine the issue

once and for all at what is only a jurisdictional stage, not least in circumstances where at

trial there may be evidence as to whether there was or was not an oral express choice of

English law (as Mr Bestolov alleges). Suffice it to say that for the purposes of this hearing

the Partnership Agreement and the Supplementary Agreement are to be regarded as

governed by Russian law -that is fatal to any jurisdiction agreement in favour of the

English courts under Article 25.

82.I would merely add that even if the Partnership Agreement and Supplementary

Agreements were governed by English law this fact alone would not justify the

conclusion that the parties had entered into a jurisdiction agreement in favour of the

English courts. The mere fact that a contract is governed by English law does not in itself

mean that the parties have entered into a jurisdiction agreement within Article 25 (see, in

this regard, Vizcaya Partners Limited v Picard (2016) UKPC .5 at [58]).

83. Furthermore, I reject Mr D'Cruz's submission that a reasonable person would take the

parties to have meant (and intended), from all the matters submitted by 1V1r D'Cruz, that

37

rhe}~ ~,vi~hed ~al~ th~,ir ~~i~pl~t~;~ rclatin~; to thy; ~as~tn~,~~hi~ to be s~~je~te~ 1:~ t~1e jl~ri~~~~tion

~1~ tn~, ~n~li~~~~ ~our~fi~ given i~ (ct~ratr~~x~v i:o m✓ ~;~n~l~a~ior~ ~t the iui~iscl~c;ti(»~al ~~t~~~~l ti~~

~over~ain~ I~~w of~ the ~~'artner~i~lip l~~rees~ner~t arrcl the ~u~~lex~l~ntal ~.~r~e~~~nt way

~~~gli~h Iaw~. ~°aY~a~raprl~ A and 2 of the ~°arta~er~fl ~ ~~ a~e;e~~leY~t say ,1c~ti~i~~~ at <~11 ~~ijoi.~C

jtrz•isai~tzon ana i ao not ~orl~icier e~~t it i~ possii~ie to t~a~e out of those ~~ovisroaas as~~

v, S~ Y-. . t v 4 L. ~ ,.4-, 9~ 6... 4 4 L~ . i~ .I . . I-, a. L„ 7"➢, .1,„ n. ~ o-.-~ ~ a , r. ~, .~ .n ,. ~. „ ..-, o- -u~~Ve.,iln,iu vi.lw ~.lrl~ L~~~;i t- A~~S76~G. .~ ~iJ. c~~ ~I! ~i~4_. ~ v -viii ~,~~ ~% ~li~~J~iil~ .d iJ iJUL ~i~.~ _.:~i ~~~[~.i ~~,p

~~reemen.t (or the ~~~pplemer~C~~l l~gre~ment), the matters ~~~;~~E to b~ ~cl;uclic~teci b~ the

?ng~i~ ; ~:aur~~.

~~n..~(:(;()I"Cjlil~~y a C~'.) 71t)~ ~UI1~iIC~LT 'L~l~i9 ~~T' 1~E;.`~~G~C)~J x"l~t; (',:~f~i~~~i9~1;U tpl~l~ ~~Ic`;i'2 l:s ~i p;0()C~

argira~le ~;ase that h~ anci l~~• Povarez~kin ~~ter~cl ~irato an agreement ors juris~~ictio~ which

,_,_---- y--- ---~~,_ A _~~--~- "~-I;UIIIjJliG~ W11.11 f'~CL(~1f' 1J,

~'UCU[TI l.001V(;Ili(;il

<`~ ~. ~~~i t~~e "~j~t~t~ t,~al ter ~~c~v~~t~e~i~ti~~ is do~rlicil~;d i~~ ~rl~ la~zci, r~o c~uL:~tioxl a~~i5e~ o~ t ie ~ou~~t

(_~E'['.~i Ylii1 ~3 .111 Y'i G(~~i(`.~i(l~"1 (l l i-{l P. ~l~l~;i?~ it ~, ~s)i'~~t;6~ t~~:?t~ :~.?t~~'':~~~'a~c~ ~~r~~~~~~*~~i Fd', ~' 4iy ih Acy v-~nr ni vx~~~ci I.IV iAAt VV UiS

also fully argued 1 will address it. [t ~e~;n~s to n1e that for the ~urpose~ of this Scenario I

have to as~urn~ that I~r Povarenki~ is got dornicilecl irl Er~~lan~1 (for i~ he is rio que~tio~l

O ~Ui ClYid tZOiL L"UdiV('!'llE'.ii.S' ctI'1~(;~). 3I 1`.°9; 170W~V('.C; T'[ IL`VrlI11 t0 C~IhF 1P1tC) ~1~~.O71PlY, tii~;

86, ~["~Ze applicably; ~t~inci~l~;5 are ~urnr~~az~aSec~ Kira .Spilzc~c~a I~c~ritime ~'orporation v ~c~yts~alex

( 19~?'%] ~aC: ~r6(). ~'e~~ aac>rc~ ~c3~~~ at ~7b~' c,t ~;~c~;

`~ i h~ basic prin~ipi~ ~is tr~~t ~z s~~~ ,viii o~~:~y be ~;r~nteci on the gz•our~d o~~ t~or•~a~rr ~~e~i~~onve~~iens where the court i~ ~ati~~lie~~ that there i~, 5ome other av~ilaole ~o~r~irr~.,h~~vi~~ ~ornpete~at jtrrisdi~tiorz, which is the appropriate t~~r~irrr for the tz~ial of ~h~actio~~i, x.co i~ whi~~ the ease may be tried Y~zore suitably foY~ the i~tere~t~ of aI~ tt~eparties and the ends of justice.(b) As Lord ~innear's formulation o~ tl~e principle indicates, iz~ ~;enet~al the burde~~ ofproof x~est~ oz~ the cle~~endant to pez•~uade the count to exe~~c;i~e its di~cr~tion to gx~anC astay (see, ~.~,, the Societe clu ~a~ ca~~, 1926 ~,C.(~1.~,.) 13 , 2,1, per ~,orc~ ~urr~x~er9arzd f~ntozl, P~•i~~ate Interr~atio~~ial ~.aw (19~"7) p. 1~0). Zt i~ how~~ve~ of i~nport~inc~ tore~ne~rii~er that each party will peek to e ytab1i~11 the e~i~tence of ~:ertuill i~~rattcr~ w~~~ici~~r✓ill ~~~ ~i~t hi~n ix~ ~~~~z~~i.~aciin~ tf~~; ~o~~z~t to e;;~er~~~ise its c{ ~-~;retrc~ri i~~ f~i~ ~~a~io~~r, ~~r~s_~ thatit'i r'~4r'iPt~~ ni~ arnv cii~~h maPtPv fih~ Pr~irlPn4rol h„riJ~s, ,.71 cr rtn~., ,•r., ,,,i,,, tea..

ii*"~ Pk ie;ir iii F, r iifi, iirrrri~lir i.! !rld' r,:)ly r~ i~ c~~t r~cTy ~~r rn ~r~ r~~r-vF rc n~~n- i t~i_ ~n~-,,,~-,-o

~t~7 C~

which is prima facie the appropriate forum for the trial of the action, the burden willthen shift to the plaintiff to show that there are special circumstances by reason ofwhich justice requires that the trial should nevertheless take place in this country (see(f~, below).

In my opinion, the burden resting on the defendant is not just to show that England isnot the natural or appropriate forum for the trial, but to establish that there is anotheravailable forum which is clearly or distinctly more appropriate than the Englishforum. In this way, proper regard is paid to the fact that jurisdiction has been foundedin England as of right (see MacShannon's case [1978] A.C. 795 ,per Lord Salmon);and there is the further advantage that, on a subject where comity is of importance, itappears that there will be a broad consensus among major common law jurisdictions. Imay add that if, in any case, the connection of the defendant with the English forum isa fragile one (for example, if he is served with proceedings during a short visit to thiscountry), it should be all the easier for him to prove that there is another clearly moreappropriate forum for the trial overseas.(d) Since the question is whether there exists some other forum which is clearly moreappropriate for the trial of the action, the court will look first to see what factors thereare which point in the direction of another forum. These are the factors which LordDiplock described, in MacShannon's case [1978] A.C. 795 , 812, as indicating thatjustice can be done in the other forum at "substantially less inconvenience orexpense." Having regard to the anxiety expressed in your Lordships' House inthe Societe du Gaz case, 1926 S.C. (H.L.} 13 concerning the use of the word"convenience" in this context, I respectfully consider that it may be more desirable,now that the English and Scottish principles are regarded as being the same, to adoptthe expression used by my noble and learned friend, Lord Keith of Kinkel, in TheAbidin Raver [1.984] A,C, 398 , 415, when he referred to the "natural forum" as being"that with which the action had the most real and substantial connection." So it is forconnecting factors in this sense that the court must first look; and these will includenot only factors affecting convenience or expense (such as availability of witnesses),but also other factors such as the law governing the relevant transaction (as to whichsee Credit Chimique v. James Scott Engineering Group Ltd., 1982 S.L.T. 131 ), andthe places where the parties respectively reside or carry on business.(e) If the court concludes at that stage that there is no other available forum which isclearly more appropriate for the trial of the action, it will ordinarily refuse a stay; see,e.g., the decision of the Court of Appeal in European Asian Bank A.G. v. Punjab andSind Bank [1982] 2 Lloyd's Rep. 356 . It is difficult to imagine circumstances where,in such a case, a stay may be granted.(~ If however the court concludes at that stage that there is some other availableforum which prima facie is clearly more appropriate for the trial of the action, it willordinarily grant a stay unless there are circumstances by reason of which justicerequires that a stay should nevertheless not be granted. In this inquiry, the court willconsider all the circumstances of the case, including circumstances which go beyondthose taken into account when considering connecting factors with other jurisdictions.One such factor can be the fact, if established objectively by cogent evidence, that theplaintiff will not obtain justice in the foreign jurisdiction; see the The Abidin Raver[1984] A.C. 398 , 411, per Lord Diplock, a passage which now makes plain that, onthis inquiry, the burden of proof shifts to the plaintiff."

39

~7. ~cco~~s~in~ly ~h~ "gust limb" of the St~ili~dz test rec~~zares the L~etc~l~dant to show that the

intere~Pc c~i~ j~~~ti~~e ~~~vol~r a ~t~ay of proc~e~;c~in~~; }~y ~;howin~ there i~ .~n~Ph~r ~v~~ l~blf_

g~orurrl ~,vliich is clearly or distinctly more appropriate than ~;~~larid. 1.f the defendant

succeeds in that task, the burden thin passes to the claim~.nt under the "se~~n~ limb" of

the test to show ~hv it ~,vould neveriheles~ be so unjust to prevent leis suing in England

_,. .. .. t,_ -r'-' vt_r. _ ._ t' ..9_ .~.i~~ ir~~ ~:i~ii~t~ ~:ud'Pr,~a~i~~s s~i:~uiE. ri:~i i~~ ~ia;~eW~ a~ipY ~i: ~~t;d ~~id~°all, ~r'z~r~s c~z ~:~~e~,

Czvzl .Tatrisdzction cznd Jticclgme~ets, 61h ed., at 4.17 to 4.40). The burden of provim~

injustice has been described as a heavy one: see Bri~~s c4z..Rees at 4.1.7a

8~. `~vailability99 of~ the foreign forum c;onnc~tes (so far as relevant to the present

proceedings} that Che foreign court must be shown to have personal jurisdiction aver the

cierendant: see e.g. tjriggs~ csc #tees ai X4.11, consistent with Lorca liofT's ret~renee to a court

r.,___._.. ~ ~ ~.~d•___ ~_,__ ._~v~ ~,uiii~cicili juii~uic;~ivi< <uuuvc~.

89. ~.s to the factors r~l~van~ to whether the foreign forum is the "natural" or "appropriate"

forum, I3rz~;~gs c~ IZee.s proffer the view (para 4.23) that t1~e ~fii•st limb of ~pzlzada

COiTl~3Y',l~f;~; :)Sle .`~U~~~iCP ~✓~Ilt;~l ~iCT ec`~5~ OA en~7t)~atlCfl j I71u~f ~Je eniliiilII~C3 ltili~ei aiJ~

headings: 1) the personal eonnec;tions which the parties to the litigation have with

particular countries; 2) the factual connections which the events which make up the story

have wxt~2 pariicuiar places; ~ j tie question o~ which law should or wi11 lie appiiecf to

:~~C,S/F„ ~~1~ ~'~!~?~til~~l`J~ :`.~'311~~ 11'~ ~i.~1~~l~t"iUi~~ ~rj ~~"i~ ~7^v`~~i~Ji~itj/ ~i~ i~1i;T~, }'iiiii~ca ~i:s Ci~lt~l

pejaciens in ario[her ~our~; and 5) the ovex~ali shape or file litigation.

9U. For the purposes of the evaluative e~et~case to be tiindertakerz 6y the c;ourf, it is important

to know what issues are likely to arise at the trial of the action on the merits: Chic sloes not

mean that the defendant mint set out his evidence in great detail (wrre~her of for~i~n law

or fact): the pup-~o5e of the exc~~cise is simply to state what t~ze issues of fact are likely ~o

be: see VTR ~'apz~al plc v Nut~itek lnterriatzonal [2013] 2 AC 337, per Lord Clarke at

[192] to [194].

91. In relation to the significance of governing law, in ~~iliada Lord Goff remarked (at

p.4f31G) that the proper [~w of the rel.ev~nt conir~~;9. may in ~~ert_~~n c_~se~ b~ ~~'vP_ry grP~~~

irnr7nrt;~nrP ~1ir4 rvr:~v r-nv~r~~rcr~l~r in n4hF~r-c~ I-~<~ of 1i4t7r-~ irvirti~~rtne~~~n ,x,hc~rn ec~nn iza thF+ nnn4<.vt

~s~ t~i~so ~x{-~ n v ~orP YrYA vio~-1,~ p~ o7rTi'7~ ,(~ '4 1 p {~ v i~ri.,.,,~U j..~ Pt~e~ ,+ /„a t-~ ~.A a-i..,avi Liter Y✓SiV ~N 'dGl.S✓, ~iAiiii iiii~ y ill 'y i b9 °v C7 J~'i lLli LVli; 1YALid1'w.6i SJ lJ ~ti1 V i',✓Ll tLlL ~J 2ti i1 ~V~ LS1Ut

~~

whereas it is generally preferable, "all else being equal", that the case should be tried in

the country whose law applies, that factor is only of particular force if issues of law are

likely to he important. In that case, taking the view that (under English conflict principles)

English law applied to the torts alleged, he observed that parties could plead and rely on

English law in Russian courts, and that even if the Russian court were to conclude that

Russian law applied, there was no reason to believe that Russian law would not recognise

and impose liability for deceit.

92. Mr Povarenkin contends that Russia is indeed an available forum which is clearly and

distinctly more appropriate than England, and the jurisdiction with which the dispute has

the most real and substantial connection.

Available forum

93. There is no dispute that Russia is an available forum in the present case. Although it

appears that the commercial or ("arbitrazh") courts may not have jurisdiction (there is a

dispute in this regard between Mr Kulov the Russian law expert instructed by Mr

Bestolov, and Mr Holiner the Russian law expert instructed by Mr Povarenkin) it is

common ground between the experts that the Russian courts of general jurisdiction are

available due to Mr Povarenkin's registered place of residence in Russia, albeit that there

is evidence from Mr Kulkov that proceedings in the courts of general jurisdiction would

be "complicated and burdensome". This is addressed further below under the second

limb, but for present purposes it is clear that the Russian courts have jurisdiction in

respect of Mr Bestolov's claim against Mr Povarenkin.

Appropriate forum

Personal connections

J4. In terms of personal connections both Mr Povarenkin and Mr Bestolov are Russian

citizens, Mr Bestolov is resident in Russia, and his career has been focused on and located

in Russian mining corporations. 1VIr I'ovarenkin is resident in Russia, and most of his

business activities are in Russia but as I have already found he visits England frequently,

usually twice a month, to visit his wife and family, and has the Belgravia Flat to stay in

when in London. He is a temporary resident in England and can come and go in England

as he wishes.

41

~~`acttral connections

~~. ~n t~~° ~estolov's ~a~e little, if anyt~iir7~;, turns on Factual connections with ~2u~sia, oriicieed tactual evidence. F(~ c%?~? ;~ rhar ~hzs i u ~~ra;~ ;t io~-wai•ci claim in c~et~t on theexpress terms of Suppleme~atal A~reemer~t l~(0:1_ ~n r~ Iafirnn ~~ ,_,~; ,~ <.-:~d.~....,~. ~i. vviiaC,ii ~ii~J 1%?~~:id2

connections and factual focus are simply irrelevant. Indeed it is possible that Ivlr ~estolovmay seek to have hip clairr~ c~etermYzz~c~ summarily. 1f 11e clici s~ then (cea•tainly in thisjurisdiction) any decision ~,vould be on the basis of wiCness statements and submissions.

~e. in contrast i~r ~'ovarenkin submits that the substantive issues that ai•e likely Co prise in the~;dSE I~1r~i~~I~.:_

1 the circu~nsta~lces of execution of the F'art.ner~~hin ~arPPn;Pn+ ~7 n~;~ gu.~ c b r(2) 7'he terms of Chi ParCnership 1~greernent, including the nature and extent of theobligations incumbent on each party (and/or their respective partners) in t•elation to the

__~ i... ~,~.,.. ~.~ as uJ.7i u.

(3) The identity Ind status of ~/Ir ~3estolov's partner.(4} The Mork done by ~Ir ~estolov aild/or his partner in :Furtherance of the projects inYakta~~a, indluding ~h~ extent cif 11r L~~;stolov's involvement in the identification,c1SSe5$:CT1~I1~ ailt~ T12~OC7.a~i0l1~ ~Ot' ghP r~~irc~h:~~v ~f ~:: i~,, Ii, i uiCiiiiii.r

(5) The ex~Jtence, timing acid bads of payment requests made 17y Nor ~P~p~~:~ .~ a~:~ thereasons for Mr Bestolov's ref~~s~l t~ r?.~e~~1 rt;P ~.a~~~,~~ +~~.'~ ~l uiS ~~niCifl~i.

(6) The ~xten~ to which l~/Ir ~estolov shared any part of the US`~3m with his partner.(7) The extent of ~tny ac~Cnowledgement of debt by ~/(r• ~'ovarenkin or those authorisedto act for him.

97, 1VIr F'ovarenkin submits that the factual analysis to be l~ndertaker~ by the couxt (wlie~he~~English or I~ussiarl) wzll almost exclusively relate to events in Russia. ~-Ie poirlt~ out ghatamong other things:

(1) I'he Partnership A~reeme~lt and both Supplementary Agreements aver°e negotiatedand exe~;uted in Russia and drafted in the Russian langu~i~e.

tom) ivA1' ~C~L()lOV'S n~t'tt~P.r x,~ac ? G?'„~~~~i iiiui`viiiu~iz ~iS YVcl~ 1V1I Y0~/~ll'ell1C111 S ~7c`il'~11~2'.

4?.

(3) On either party's case, the obligations imposed on each party (and/or theirrespective partners) related to mining projects to be acquired in Yakutia, Russia.

(4) Any relevant performance of such obligations (including the alleged identificationand assessment of mines and/or negotiations in relation to the acquisition of suchmines as suggested by Mr Bestolov and denied by Mr Povarenkin) was intended totake place in Russia and did in fact take place in Russia.

(5) The proposed investment in Russian mines was effected via the acquisition ofRussian corporations.

(6) All meetings between Mr Povarenkin and Mr Bestolov took place in Russia.

98. It is not clear at this stage, how much factual analysis will ultimately be needed not leastas many of the points identified above are common ground. However to the extent thatfactual evidence will be needed it will inevitably be focussed upon events in Russia.

Evidence/Convenience/Expense

99. In VTB Lord Mance observed (at paragraph 62) that the issue of location of witnesseswas "at the core of the question of appropriate forum". In the present case Mr Bestolov isa Russian resident but has chosen to bring these proceedings in England. Mr Povarenkinthough a Russian resident, has a substantial connection with England, he visits Englandfrequently, usually at least twice a month. He is a temporary resident in England and cancome and go in England as he wishes. Whilst in England he can stay at the Belgravia Flat,and in such circumstances he would have no difficulty in attending a trial in Englandwithout particular additional expense (given his frequent visits to London in any event).

100. Other potential witnesses are likely to be in Russia. These include Mr Kazdobin, MrI~udoliy and Mr Kharlamov. Whilst there would be additional expense if such witnessesgave evidence in England it is common for witness evidence before the CommercialCourt to be given by video-link. It is likely that all witnesses evidence would be given inRussian and would require interpretation when preparing and giving evidence. TheCommercial Court has considerable experience of such trials, however it would no doubt

43

a~ a~i u ~~~r~ ~~~ci ex~~;r~~e c~o~7~~ar~;c~ to s~i~;h e;viclenc~e being given zza ~Z~~s~r~l. ~;~ually ttrthe extent that r_h_Pr~ are a~~iti~n~: d~~cu~~,~ts o~f i~eievance, such do~~im~ntatio~ i~ 1ik~~y~~ ~e lot;~~~t~ it _~Ed~~ia. I~ i~ nog clean, i~owever, what voitlrr~e oz ciocurrientation exists.~'~ny rei~vant documents would Yieed to be tra~islatecl into English (a5 hay already beendone in resr~ect of the ~enrr~t ~~prr~~~,,~~; ~~~~;~~~1i~~. ~dEia~i tine preparation anti izearin~O~ ~V1C~eI1Cf; ~OI' ~~1(' pl1l'~OSCS O~ pI'OCe2(~11I~QS 111 ~.gt~lt?t~~l ;c l:l:~,~~' ~v iii', i~iiic~ ~;ji~+„j~ji~i`✓C 9

and potentially more inconvenient, than in relation to proceedings in Russia, tho~lgh it isto b~ noCer~ that the clairr~ is su~st~aziial (~J~$`7,~3~,~47).

~e~~~~e ~ a~~✓

~~~~, 9-'f1➢" Y1: ~vvn~ ten rr~r~o cn ~ 9 7 4 i a-N Nui{✓v ~LJe [lull I CI Yf'.!I fill YY]~ ~i;]i:iii~J y li ~. QfJ tlt ll, (~„U(G l!~(W l[~~ [~ ~C1~~E.'r ~l

English law} is likely to be Russian law. It apnes~rs Char R,~~c~u~;; ~ ~„~ ~;~;;~ u;;~, ~%ed~ u~~iyas a matter of Russian ~on~lic;t principles, although thez~e is a di#'i'erence of opinionbetween Mr Holiner and ~/Ir Kulkov. In this regard it appears that the relevant Itizssianr_;~ ~= ~~rr;, ~ a:au: ~~ i~~{A~ ~r~~,~~ i«c i~ome i:onvention, and the c(ebate between experts~ocu~es on similar issues to those raised above. The Engli~l~ ~ot~rt~ aY~e, o~~ ce~irse, veryf~a~niliar with hearing evidence on foreign law, including Russian law, and foreignli~nit~t~o~ perio~iU ~~✓~r I'ovarerkir's primary position is that the claim is time barred under$~LlSS1i1I] ~ilW~, cl 1V~~ Of r1]:llfiF~ r~ oiilarl J~ r~~t~r~: ve`~a buy' iiic Lit~~i~il C;vU]'IS. lil the (JI°~S~il$cage Ii~~ ~~ad identifies an behalf of (~Ir ~'ovar~nkin t(~at there is ~~~ su~;ge t:~~ t~~L

,. ,•Russzan law is different from ~.nc~lrch ?K~~~ ~❑ ;nur~;,rs of su~siz«ice. yr course were theb _.,

applicable la~v to be English law then the English courts would ire best placed todetermine rnatter~s under English la~,v (thou~la th€ ~us~ian courts al•e also farrniliar withadjudicating on matters under foreign law).

Overall Shade of the I.~iti~ation

102. How the shape of the litigation is to be characterized very much defends on whoseperspective of the litigation is taken. On one view it is a simple debt claim turni7lg on theproper construcCzon of a short a~reeinent, or1 another it will involve a factual analysis inrelation to evens in Russia, involving evidence from witnes~e~ ii1 IZ~rs~ia ~~~c~o~umentatiorl khat is also likely to be in ~us~ia.

n_~

Russia as a clearly or distinctly more ap~ro~riate forum?

103. In the above circumstances I am satisfied that Russia would have been an available

forum and an appropriate forum. However, on the hypothesis that Mr Povarenkin is not

domiciled in England, would Mr Povarenkin have discharged the burden of

demonstrating that Russia is a clearly or distinctly more appropriate forum? I regard the

matter as finely balanced, but having regard to all the matters identified above I consider

that he would have done so.

Spiliada Limb 2: Inequity and refusal of a staX

104. This is not a case where it is suggested that the substance of the claim cannot be heard

fairly in the Russian court (e.g. on the type of grounds raised in Cherney v Deripaska).

However Mr Bestolov's expert, Mr Kulkov, makes a number of points directed towards a

submission that litigation of the claim in the Russian courts of general jurisdiction (as

opposed to the commercial or "arbitrazh" courts) would be "complicated and

cumbersome" complaining of procedural and/or administrative aspects of the Russian

court system. His evidence is that if the commercial or "arbitrazh" courts do not have

jurisdiction, the general courts deal with less sophisticated litigants, they are

"overloaded", cases are disposed of in one hearing within 2-3 month time limits, there can

be problems with proving foreign law and the Russian courts are "reluctant" to call

witnesses.

105. There is an issue as to whether the arbitrazh courts would have jurisdiction, but even

assuming the matter would proceed in the Russian courts of general jurisdiction Mr

Holiner's evidence is that it is not possible to obtain accurate statistics for the general

courts' case load, that it is possible to extend time limits, that foreign law is (within Mr

Holiner's own personal litigation experience there) frequently heard by way of expert

reports and that the Russian courts have agreed to hear witnesses in appropriate case.

106. I do not consider that the matters raised would have led to it being unjust to prevent

Mr Bestolov suing in England had this stage been reached. In this regard I bear in mind

that it is not normally appropriate for the court to compare the quality of justice

obtainable iii a foreign forum which adopts a different procedural system: see The Abidin

45

~ave~~ (19~3~] ~C; 39~, ~,orc~ ~of~ in 5'pzlic~cic~ (~t 4~2-3) a~c~ Dicey <~ l~r~rris at 12-036 to

12~n:~9.

107. Irz the event ~no question of granting a stay on fo~•r~m convenzens grounds arises i~7 the

context of ~i1• ~ovarenkin's domicile, anti i~r ~ovarenkin's ~~pp~icatiort i~ ~iisrni~~E~~.

108, I would hope thaC the parties will be in a position to agree an Order reflecting rri~

judgment, ai d the incidence of costs in the light of my jl~dgment, bud if <in~ issues remain

outstanding 1 wi11 hear argument fi•oYn the parties on such matters on the handing down of

the judgment.

A t~"~ (~