ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
MR JUSTICE FANCOURT
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE FLAUX
LORD JUSTICE NEWEY
| JSC COMMERCIAL BANK PRIVATBANK
|- and -
|(1) IGOR VALERYEVICH KOLOMOISKY
(2) GENNADIY BORISOVICH BOGOLYUBOV
(3) TEAMTREND LIMITED
(4) TRADE POINT AGRO LIMITED
(5) COLLYER LIMITED
(6) ROSSYN INVESTING CORP
(7) MILBERT VENTURES INC
(8) ZAO UKRTRANSITSERVICE LTD
Mark Howard QC, Michael Bools QC, Alec Haydon QC and Ben Woolgar (instructed by Fieldfisher LLP) for the First Respondent
Daniel Jowell QC, Matthew Parker and Richard Eschwege (instructed by Enyo Law LLP)
for the Second Respondent
Sonia Tolaney QC, Thomas Plewman QC and Marc Delehanty (instructed by Pinsent Masons LLP) for the Third to Eighth Respondents
Hearing dates: 22-25 July 2019
Crown Copyright ©
Lord Justice David Richards, Lord Justice Flaux and Lord Justice Newey:
The Bank's claim
Is article 6(1) of the Lugano Convention subject to a sole object test?
"A person domiciled in a State bound by this Convention may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments from separate proceedings;
2. as a third party in an action on a warranty or guarantee, or in any other third party proceedings, in the court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case;
3. on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending;
4. in matters relating to a contract, if the action may be combined with an action against the same defendant in matters relating to rights in rem in immovable property, in the court of the State bound by the Convention in which the property is situated."
"1. Subject to the provisions of this Convention, persons domiciled in a State bound by this Convention shall, whatever their nationality, be sued in the courts of that State.
2. Persons who are not nationals of the State bound by this Convention in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State."
Articles 2 of the Brussels Convention and of Brussels 1 are in materially the same terms, as is article 4 of the Recast Brussels Regulation.
"Persons domiciled in a State bound by this Convention may be sued in the courts of another State bound by this Convention only by virtue of the rules set out in sections 2 and 7 of this Title."
"A person domiciled in a Contracting State may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled;
2. as a third party in an action on a warranty or guarantee or in any other third party proceedings, in the court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case;
3. on a counterclaim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending."
The significant change was to introduce into article 6(1) the qualification of a close connection between the claims brought against the defendants. The same change was made when the Lugano Convention replaced the original Lugano Convention in 2007. The background to this change, and the reasons for it, are significant for the purposes of this appeal.
"In order for this rule to be applicable there must be a connection between the claims made against each of the defendants, as for example in the case of joint debtors. It follows that action cannot be brought solely with the object of ousting the jurisdiction of the courts of the State in which the defendant is domiciled."
" That might be the case if a plaintiff were free to bring an action against several defendants for the sole purpose of removing one of them from the courts of the State where he is domiciled. As pointed out by the report of the committee of experts who drew up the text of the Convention, any such possibility must be excluded. For this purpose it is necessary for a connection to exist between the actions against each defendant.
 It appears that, to ensure so far as possible the equality and uniformity of the rights and obligations which flow from the Convention for Contracting States and persons concerned, it is necessary to determine the nature of the connection independently.
 On this point it should be noted that the abovementioned report by the committee of experts expressly justifies Article 6(1) by the concern to avoid the delivery of decisions in Contracting States which would be incompatible as between themselves. That is, moreover, a concern which has been embodied in the Convention itself in Article 22, which governs cases where related actions are brought in the courts of different Contracting States.
 Therefore the rule laid down by Article 6(1) applies where actions against different defendants are connected at a time when they are commenced, that is to say, when it is expedient to hear and determine them together to avoid judgments which might be irreconcilable if the actions were determined separately. It is for the national court to ascertain whether this condition is satisfied in each particular case."
"It would be difficult to apply a subjective criterion which would necessitate asking whether the plaintiff did or did not intend to remove one of the defendants from the court which would normally have jurisdiction.
Whatever the circumstances, it must be possible to deduce which court has jurisdiction from objective rules. Legal certainty would hardly be compatible with an examination of the plaintiff's intentions, which would be both difficult and uncertain."
"47. In any event, the exception provided for in article 6(1) of the Convention, derogating from the principle that the courts of the state in which the defendant is domiciled are to have jurisdiction, must be construed in such a way that there is no possibility of the very existence of that principle being called in question, in particular by allowing the plaintiff to make a claim against a number of defendants with the sole purpose of ousting the jurisdiction of the courts of the state where one of those defendants is domiciled: Kalfelis v. Bankhaus Schröder, Münchmeyer, Hengst & Co. (Case 189/87) ECR 5565, 5583, paras. 8 and 9.
48. Accordingly, after pointing out that the purpose of article 6(1) of the Convention, and of article 22, is to ensure that judgments which are incompatible with each other are not given in the contracting states, the court held in Kalfelis that, for article 6(1) of the Convention to apply, there must exist between the various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine the actions altogether in order to avoid the risk of irreconcilable judgments resulting from separate proceedings."
"A person habitually resident in a Contracting State may also be sued in another Contracting State:
1. Where he is one of a number of defendants, in the courts for the place where any one of them is habitually resident, unless the action has been brought solely in order to cause the co-defendants to appear in a court other than their own court."
"did not believe it necessary to codify the other principle stated in the Jenard report, according to which jurisdiction is justified only if the claim does not have the exclusive purpose of removing one of the defendants from their proper court. It felt that the close relation that must exist between claims, together with the requirement that the court before which the matter was brought be the court of the domicile of one of the defendants, was sufficient to avoid the misuse of the rule (fn 8); this was not the case with an action on a warranty or guarantee or other third party proceedings regulated by Article 6(2), where the principle was expressly referred to in order to prevent a third party from being sued in an unsuitable court."
"In those circumstances, Art. 6(1) of Regulation 44/2001 may be relied on in the context of an action brought in a Member State against a defendant domiciled in that state and a co-defendant domiciled in another Member State even when that action is regarded under a national provision as inadmissible from the time it is brought in relation to the first defendant."
"However, the special rule on jurisdiction provided for in Art. 6(1) of Regulation 44/2001 cannot be interpreted in such a way as to allow a plaintiff to make a claim against a number of defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the Member State in which that defendant is domiciled (see, in relation to the Brussels Convention [Kalfelis] at  &  and [Réunion] at ). However, this does not seem to be the case in the main proceedings."
While not entirely clear, it seems likely that in the last sentence of , the Court was referring to the fact, as stated by the Austrian court, that it had not been established and could not be assumed that the claimant knew of the Austrian debtor's bankruptcy and hence that the action was inadmissible against him under Austrian bankruptcy law. It may be for this reason that its answer, quoted above, is qualified by the words "in a situation such as that in the main proceedings".
"There are two reasons for the connection requirement. On the one hand, it reduces the risk of diverging judgments; on the other hand, it avoids the unwarranted removal of one of the defendants from the courts of the state where he is domiciled."
Mr Howard also drew attention to the footnote to this paragraph where the Advocate General states:
"Although this second reason is mentioned in article 6(2)….it is not mentioned in para (1); but it can be deduced from the spirit and purpose of the provision, as a corollary to the connecting link (Jenard Report) or in an autonomous manner (Droz…considers that it is due to an involuntary omission rather than a voluntary silence)."
The suggestion that the absence in article 6(1) of any reference to the removal of a defendant from the courts of his state of domicile was "an involuntary omission rather than a voluntary silence" is inherently improbable and cannot stand with the drafting history described by Professor Pocar and by the CJEU in Freeport, to which we have referred. It should be noted that the Court did not adopt the answer and analysis proposed by the Advocate General.
"is it a precondition for jurisdiction under article 6(1), in addition to the conditions expressly laid down therein, that the action against a defendant before the courts of the state where he is domiciled was not brought solely in order to have a claim against another defendant heard by a court other than that which would otherwise have had jurisdiction to hear the case?"
"Article 6(1) of Regulation No 44/2001 applies where claims brought against different defendants are connected when the proceedings are instituted, that is to say, where it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings, without there being any further need to establish separately that the claims were not brought with the sole object of ousting the jurisdiction of the courts of the member state where one of the defendants is domiciled."
"52 It should be recalled that, after mentioning the possibility that a plaintiff could bring a claim against a number of defendants with the sole object of ousting the jurisdiction of the courts of the member state where one of the defendants was domiciled, the court ruled, in Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst & Co. (Case 189/87)  ECR 5565, that it was necessary, in order to exclude such a possibility, for there to be a connection between the claims brought against each of the defendants. It held that the rule laid down in article 6(1) of the Brussels Convention applies where claims brought against different defendants are connected when the proceedings are instituted, that is to say, where it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
53. Thus, that requirement of a connection did not derive from the wording of article 6(1) of the Brussels Convention but was inferred from that provision by the Court of Justice in order to prevent the exception to the principle that jurisdiction is vested in the courts of the state of the defendant's domicile laid down in article 6(1) from calling into question the very existence of that principle: the Kalfelis case, para 8. That requirement, subsequently confirmed by the judgment in Réunion Européenne SA v Spliethoff's Bevrachtingskantoor BV (Case C-51/97)  QB 690, para 48, was expressly enshrined in the drafting of article 6(1) of Regulation No 44/2001, the successor to the Brussels Convention : Roche Nederland BV v Primus (Case C-539/03)  ECR I-6535, para 21.
54 In those circumstances, the answer to the question referred must be that article 6(1) of Regulation No 44/2001 applies where claims brought against different defendants are connected when the proceedings are instituted, that is to say, where it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings, without there being any further need to establish separately that the claims were not brought with the sole object of ousting the jurisdiction of the courts of the member state where one of the defendants is domiciled."
"In accordance with the court's consistent case law, "the rule [on jurisdiction laid down in article 6(1) of the Brussels I Regulation] cannot be interpreted in such a way as to allow the plaintiff to make a claim against a number of defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the member state in which the defendant is domiciled" (my emphasis): the Reisch Montage case, para 32 and Painer's case, para 78, and the case law cited. This restriction concerning a potential ousting of jurisdiction of the court seised, which was supported in the Jenard Report is perfectly consistent with the requirement that derogations from the jurisdiction in principle of the courts for the place of the defendant's domicile, laid down in article 2 of the Brussels I Regulations, should be interpreted restrictively."
"Provided that the deceitful tactics alleged, disputed in this case by the parties concerned, are not just probable but confirmed, which it will be for the national court to establish, such an abuse of rights, which is designed to deprive one or more of the defendants of the general jurisdiction as a rule of the court for the place where they are domiciled, ought in my view to be penalised by refusal to apply article 6(1) of the Brussels I Regulation in those circumstances, given that the criteria relating to connecting factors were not truly satisfied at the time the action was brought. The advantage of its being the court for the domicile of the "anchor defendant" that examines and tries the claims against several defendants at the same time, in accordance with that provision, disappeared as soon as a binding transaction put an end, vis-à-vis that defendant, to the legal obligation that the applicant could have relied upon against it before that court. Apart from these specific cases, there is, on the other hand, no need in my view to examine and penalise an abuse of rights in a legal context of this nature."
"25 It must therefore be considered that determining separately actions for damages against several undertakings domiciled in different member states which, contrary to EU competition law, participated in a single and continuous cartel may lead to irreconcilable judgments within the meaning of article 6(1) of Regulation No 44/2001.
26 That said, it remains to be considered to what extent the applicant's withdrawal of its action against the sole co-defendant domiciled in the same member state as the court seised is capable of rendering the rule of jurisdiction provided for in article 6(1) of Regulation No 44/2001 inapplicable.
27 According to settled case law, that rule cannot be interpreted as allowing an applicant to make a claim against a number of defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the member state in which that defendant is domiciled: the Reisch Montage case  ECR I-6827, para 32, and in Painer's case EU:C:2011:798 ,  ECR I-12533, para 78.
28 The court has nevertheless stated that, where claims brought against various defendants are connected within the meaning of article 6(1) of Regulation No 44/2001 when the proceedings are instituted, the rule of jurisdiction laid down in that provision is applicable without there being any further need to establish separately that the claims were not brought with the sole object of ousting the jurisdiction of the courts of the member state where one of the defendants is domiciled: Freeport plc v Arnoldsson  QB 634, para 54.
29 It follows that where, when proceedings are instituted, claims are connected within the meaning of article 6(1) of Regulation No 44/2001, the court seised of the case can find that the rule of jurisdiction laid down in that provision has potentially been circumvented only where there is firm evidence to support the conclusion that the applicant artificially fulfilled, or prolonged the fulfilment of, that provision's applicability."
"Since article 8.1 is itself to be restrictively interpreted because it derogates from the primary rule of jurisdiction in article 4, it might be thought that the Court of Justice would liberally apply an abuse of law principle where it perceived that article 8 was being misused as a means of circumventing article 4. None the less the cases show that abuse of EU law has been restrictively interpreted, even in this context."
"In its judgment, the Court of Justice [in Cartel Damage] expressly affirmed that opinion in para 27, adding at para 33 that in the context of cartel cases nothing short of collusion between the claimant and the anchor defendant would be sufficient to engage the abuse of law principle."
"35 Those decisions of the Court of Justice show that, even before the Freeport case  QB 634, there was an established line of authority which limited the use of the abuse of EU law principle as a means of circumventing article 6 (now article 8) to cases where the ability to sue a defendant otherwise than in the member state of its domicile was the sole purpose of the joinder of the anchor defendant. Even though there appears to be no authority directly upon abuse of EU law in relation to article 4 itself (or its predecessors), the need to construe any express or implied derogation from article 4 restrictively would appear to make the position a fortiori in relation to article 4, as indeed the judge himself held.
36 But the matter does not stop there. Such jurisprudence as there is about abuse of EU law in relation to jurisdiction suggests that the abuse of law doctrine is limited to the collusive invocation of one EU principle so as improperly to subvert another."
"In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen."
The recital contains no reference to a sole object test. The object of the claimant is irrelevant to the factor which is mentioned, that a defendant should reasonably be able to foresee the courts in which he might be sued. That presents no difficulty in the present case, in which it is alleged that Mr Kolomoisky and Mr Bogolyubov used English companies for their fraudulent scheme. They could well foresee that they might be sued in the English courts.
The application of a sole object test to the present case
"(1) There is a good arguable claim against them in tort for loss of about US$515m.
(2) The claim against the English Defendants based on unjust enrichment is hopeless.
(3) The English Defendants have no substantial assets, as the Bank was aware.
(4) The English Defendants have no particular significance as corporate entities involved in the fraudulent scheme, other than the fact that they are English companies.
(5) The English companies appear to have been set up to act as agents for offshore companies and are run by Cypriot corporate service providers with accounts in Cyprus, which facts were at all times available to the Bank.
(6) The Particulars of Claim present a misleading picture of the English Defendants being central to the fraudulent scheme and as being the intended recipients of US$1.8bn.
(7) The First and Second Defendants are known to be extremely wealthy businessmen with substantial assets worldwide under their direct or indirect control.
(8) The claim against the First and Second Defendants is valued at US$5.5bn according to the Bank, but the Bank has chosen to bring instead a claim for US$1.91bn of money that passed through the English and BVI Defendants' bank accounts.
(9) As compared with a trial in Ukraine or Switzerland, proceedings in England and Wales confer substantial procedural advantages on the Bank, including (a) the ability to obtain worldwide freezing orders extending to assets only indirectly controlled by the First and Second Defendants, (b) an extensive disclosure regime and (c) cross-examination of witnesses at trial."
"98. After considering carefully what the Bank has submitted and the likelihood of the Bank suing the English Defendants if it could not have sued the First and Second Defendants, I have no doubt that the Bank has sued the English Defendants in order to establish jurisdiction to sue the First and Second Defendants in London under Article 6 of the Lugano Convention. I conclude that it is also the sole reason that this particular claim has been brought against the English Defendants. My reasons, in brief summary, are the following.
99. First, no direct evidence has been given as to why in fact the Bank brought a claim against the English Defendants in December 2017, and none of the arguments that the Bank puts forward now as justification are at all persuasive. The judgment in the Cartel Damages Claim makes clear that the relevant time is, unsurprisingly, the time at which the action was brought, not any later time. Some of the justifications on which the Bank relies could not have existed as reasons in December 2017 because the Bank was unaware of them.
100. Second, the claim that was brought has been artificially constructed in order to seek to enable the Bank to satisfy Article 6. The claim has been limited to US$1.91bn so that the claims against the First and Second Defendants and the English Defendants appear to be broadly co-extensive and their importance as defendants equivalent. The role of the English Defendants in the fraudulent scheme has been presented to make it appear that the English Defendants were central players in the fraudulent scheme and/or the recipients of the US$1.8bn, such that the Bank would naturally wish to pursue them. A restitutionary claim against the English Defendants, used to support this conclusion, is unsustainable.
101. Third, the Bank has presented its claim – in the particulars of claim and in its evidence upon the without notice application – so as to omit highly relevant facts. A true presentation of the facts would have revealed that the role of the English Defendants was no more than incidental to the working of the fraudulent scheme.
102. Fourth, there is no real attraction or benefit to the Bank in suing the English Defendants; the real defendants to the claim are the First and Second Defendants.
103. Fifth, the Bank has admitted that bringing a claim against the First and Second Defendants in London gives it significant procedural advantages, many of which the Bank has already enjoyed as a result of the worldwide freezing order and the Defendants' compliance with associated disclosure obligations. That was a real benefit to the Bank, as compared with the lesser attraction of litigating in Switzerland or Ukraine, and is self-evidently the reason for the proceedings in London.
104. I do not shut my eyes to the fact that the Defendants admit that the Bank has a good arguable claim against them for at least hundreds of millions of dollars. On the basis of the evidence that I have read, the proceedings would be very complicated and expensive. That is another reason why, in my judgment, the Bank would not have brought proceedings against the English Defendants on their own. It is, of course, unattractive for the First and Second Defendants to admit a good arguable case of fraud on an epic scale against them and yet seek to prevent this court from investigating the matter. That is particularly so where the First Defendant is on record as previously having stated to the press in Ukraine that the English court can be expected to get to the truth of the matter. However, the consequence of my conclusion is not that the First and Second Defendants will escape justice but that they are entitled under the terms of the Lugano Convention to have any claim brought against them in Switzerland, where they are domiciled. Alternatively, the Bank could bring its proceedings against them in its own State, Ukraine, which is not a party to the Lugano Convention. That is where the entire factual subject matter of the claim naturally resides and where the First Defendant has himself issued proceedings relating to the subject-matter of the alleged fraud. What the Bank is not permitted to do is forum shop without regard to international conventions on jurisdiction."
"iv) The English Defendants will have important disclosure to give. The Bank points in particular to documents likely to show the circumstances of drafting the supply agreements and the loan file supply agreements and negotiations with the borrowers; the negotiation of the agency agreements; documents that – according to the terms of the agency agreements – would have to be produced in accordance with them relating to the actions of the English Defendants, and documents relating to the beneficial ownership and administration of the English Defendants. If the English Defendants were substantial entities and central to the fraud, as the Bank contended, then there might well be a reasonable expectation that some or all of the identified documents exist. However, the reality is that the English Defendants are mere creatures and conduits, and it is highly implausible that the English Defendants negotiated any of the documents in question or that the agency agreements have been operated in accordance with their terms. The Bank's skeleton argument asserts that "none of the [English and BVI Defendants] had any website, offices, staff, warehouses, workforce or any other public presence". If the Bank were entitled to sue the First and Second Defendants, it is understandable that it might also choose to sue the English and BVI Defendants in the hope that something additional, or inconsistent with the First and Second Defendants' cases, might emerge on disclosure. But that is not the question: the question is whether there was any real purpose in suing the English Defendants other than to join the First and Second Defendants to the claim."
Grounds 2 and 3: Stay
"The court also notes that the documents and evidence on the record in the case make it evident that the claim is frivolous and fabricated…
Based on the foregoing and in view of the fact that the claimant and his representatives have no interest in the final outcome of the case hearing, and that the court has found abuse of process, the court hereby finds that there is good cause to dismiss the claim without a hearing on the merits."
Reflexive effect of article 28
1. Where related actions are pending in the courts of different States bound by this Convention, any court other than the court first seised may stay its proceedings.
2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.
3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
"However generous and purposive its approach to interpretation, the court's task remains one of interpreting the written document to which the contracting states have committed themselves. It must interpret what they have agreed. It has no warrant to give effect to what they might, or in an ideal world would, have agreed. This would violate the rule, also expressed in article 31(1) of the Vienna Convention, that a treaty should be interpreted in accordance with the ordinary meaning to be given to the terms of the treaty in their context."
He submitted that article 28 meant what it said. It is confined to proceedings taking place in another Convention state and the court should not interpret it otherwise. The court had no jurisdiction to grant a stay in relation to proceedings other than those before another Convention state.
"37. It must be observed, first, that Article 2 of the Brussels Convention is mandatory in nature and that, according to its terms, there can be no derogation from the principle it lays down except in the cases expressly provided for by the Convention [citations omitted]. It is common ground that no exception on the basis of the forum non conveniens doctrine was provided for by the authors of the Convention, although the question was discussed when the Convention of 9 October 1978 on the Accession of Denmark, Ireland and the United Kingdom was drawn up, as is apparent from the report on that Convention by Professor Schlosser.
38. Respect for the principle of legal certainty, which is one of the objectives of the Brussels Convention [citations omitted] would not be fully guaranteed if the court having jurisdiction under the Convention had to be allowed to apply the forum non conveniens doctrine.
41. Application of the forum non conveniens doctrine, which allows the court seised a wide discretion as regards the question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the predictability of the rules of jurisdiction laid down by the Brussels Convention, in particular that of Article 2, and consequently to undermine the principle of legal certainty, which is the basis of the Convention."
"…it is not open to me to interpret and apply Article 27 reflexively so as to enable me to exercise a discretion to stay proceedings which have been properly founded on Article 2, on the grounds that the same dispute is pending between the same parties in the Utah courts and that the latter and not this Court is the natural and appropriate forum. Such an interpretation would introduce the wide forum conveniens discretion by the back door, contrary to the ruling of the ECJ in Owusu. In my view the submission fails whether this Court is the first or second seised."
"We do not have to decide whether that [decision] was correct, though we note that, if he is right, there is this oddity: that there is a clear lis pendens rule, with associated court first seized rule, for parallel cases within the EU but none for parallel cases where one is running within an EU Member State and one without. What Barling J did not decide was that Art. 2 conferred extra-EU subject matter jurisdiction generally."
"(a) The risk of irreconcilable judgments which undermine two important objectives of the Brussels scheme namely: avoiding irreconcilable judgments between Member States and ensuring recognition of judgments between Member States.
(b) It would lead to an undesirable lacuna, as there will be no mechanism in place for resolving this situation with the consequence of both proceedings continuing with the consequent increased uncertainty and cost.
(c) The supporting rationale by Jacob LJ in Lucasfilm
'… the EU could not legislate for third countries' :
'The Regulation is not setting up the courts of the Member States as some kind of non-exclusive world tribunals for wrongs done outside the EU by persons who happen to be domiciled within the EU.' 
[She then also cited  of Jacob LJ's judgment which we have already quoted]
(d) The reasoning that underpins Owusu is not incompatible with retaining the discretionary power where there are parallel proceedings in a non-Member State. It does not undermine certainty for the defendant (as he will be bringing the proceedings in the non-Member State); the claimant (although not mentioned in Article 2) will have knowledge of the proceedings in the non-Member State and it is likely to be in his interests to have one set of proceedings rather than two (the latter would happen if the Owusu doctrine was extended); there would be less risk of irreconcilable judgments given in Member States which are not recognised in another Member State; Coreck (which was decided 4 years before Owusu) permits judicial discretion in circumstances where there is no provision for it in Brussels 1."
"165 The "general rule" is that where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred, if it is reached after full consideration of the earlier decision: Minister of Pensions v Higham  2 KB 153, page 155. There is good reason for the rule and I should depart from it only if convinced that Miss Theis was wrong: Colchester Estates v Carlton Plc  Ch 80, page 85. I am not. On the contrary, I agree with both her decision and her reasoning. As Mr Malek submitted, many of the reasons for giving article 22 reflexive effect apply to article 28, and this conclusion reflects the opinion expressed in textbooks such as Dicey, Morris and Collins (loc cit at para 12-022) and Briggs and Rees (loc cit at para 2.260).
166 The connection between the principle of forum non conveniens and the principle of lis alibi pendens is undeniable, and was recognised by Hobhouse J in S & W Berisford Plc v New Hampshire Co  2 All ER 321 at page 331j and Potter J [in] Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd  2 All ER 335 at page 347 (as well as Barling J in the Catalyst case). Both doctrines are aspects of the law's general policy expressed by Bingham LJ as being "to favour litigation of issues only once, in the most appropriate forum": Du Pont v Agnew  2 Lloyd's Rep 585, page 589. The fact that there is lis alibi pendens might influence the court's decision on an application to stay on the grounds of forum non conveniens, as Barling J observed in Catalyst at para 109. But I see no difficulty in giving effect to the ECJ's injunction that because of article 2 a defendant cannot dispute that his domicile is an appropriate forum (and so not contend that it is forum non conveniens), but be protected from multiplicity of proceedings. Mr Smouha accepted that, notwithstanding Owusu, a defendant is entitled to have stayed proceedings against him that are abusive, and therefore would be entitled to a stay if a claimant has oppressively started proceedings both in another jurisdiction and here, but he distinguished the position where a defendant to English proceedings has brought the foreign proceedings, albeit before the proceedings were brought here. I cannot accept that the court's powers to protect a party from multiplicity of proceedings are subject to this limitation, or that, whereas Owusu allows protection in the former circumstances, it prevents it in the latter."
"It is not necessary for us to be drawn into a wider debate (which Ms Theis also considered) on the extent to which Owusu v Jackson applies to the Judgments Regulation; and anything I might say on that topic would be simply obiter."
"The problem has long been recognised: see Dicey, paras 12-021-12-022; 23-026-027. The way in which it arises can be illustrated by two examples. First, Article 22(1) of the Brussels I Regulation gives exclusive jurisdiction, in the case of proceedings which have as their objects rights in rem in immovable property, to the courts of the Regulation State where the property is situate. What if the defendant is domiciled in England and is sued in England, and the land is in a non-Regulation State, such as Canada? Second, Article 23 provides that if the parties, one or more of whom are domiciled in a Regulation State have agreed that the courts of a Regulation State are to have jurisdiction to settle any disputes which may arise between them. What if they have designated the courts of a State which is not a Regulation State, such as the courts of New York and an action is brought in England in breach of the jurisdiction agreement? In such cases it would be odd if the Brussels I Regulation did not permit the English court to stay its proceedings."
We have already referred at  above to the passage from the judgment of Floyd LJ in Huawei where the analysis of Andrew Smith J as to why article 22 should have reflexive effect was approved.
Meaning of "expedient to hear and determine"
"1. Where jurisdiction is based on Article 4 [domicile] or Articles 7, 8 or 9 and an action is pending before a court of a third State at the time when a court in a Member State is seised of an action which is related to the action in the court of the third State, the court of the Member State may stay the proceedings if:
a) It is expedient to hear and determine the related actions together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
b) It is expected that the court of the third State will give a judgment capable of recognition and, where applicable, of enforcement in that Member State; and
c) The court of the Member State is satisfied that a stay is necessary for the proper administration of justice."
"The words in the Article must be given proper weight. They envisage actions as being related to each other which could, in the circumstances in which they are brought, be tried together. Otherwise it cannot be "expedient" to try them together. It simply seems to me to be the case that these two actions cannot be so tried."
"…the test of whether 'it is expedient to hear and determine them together' …may perhaps be glossed as whether the two actions should be heard and determined together (to avoid the risk of irreconcilable judgments); but in my judgment there is a real difference between asking whether the actions can be brought together and asking whether they should be brought together."
"not least because the substantive relief sought in the instant proceedings, which is essentially of an equitable and tracing nature, could not apparently be pursued under the Greek civil law, and could therefore not be the subject of a claim in the Greek criminal proceedings…Obviously, the Greek criminal proceedings could not be heard in this country. Accordingly, I do not see how the Greek criminal proceedings and the instant proceedings could be 'heard and determined together'" (p.72B-C).
"If I had not found that the Declaratory proceedings involved the same cause of action as the Mainz proceedings, I would have found that the two actions were connected but not that it was expedient to hear and determine them together to avoid the risk of irreconcilable judgements resulting from separate proceedings. I have in mind the comments of Lord Saville in Sarrio SA v Kuwait Investment Authority  AC 32 at page 40, but here the two actions are not capable of being heard and determined together in any real sense of the word because the Declaratory Proceedings will proceed on the basis of English law whilst the German actions proceed on the basis of the validity of the SSFA as a matter of English law but then seek to apply German public policy considerations."
"Against this somewhat chequered and uncertain background and in the absence of clear authority to the contrary, it seems to me that the answer to Mr Handyside's threshold point ultimately lies in the wording of Article 28(3). As I have already said, the focus of that wording is in my view what in principle is expedient which I read in the sense of genuinely desirable, not what is "capable" or "possible". For that simple reason, I am unable to accept Mr Handyside's threshold point. Thus it is my conclusion that the existence of an exclusive jurisdiction clause in favour of the court second seised does not of itself mean that proceedings commenced in that court may not be "related" to proceedings in another court for the purposes of Article 28(3)."
The exercise of discretion
"Where…an action is merely stayed on the court's own motion, the court need not at that time be satisfied that both actions can be brought together in the court first seised; and the court may subsequently be persuaded, by evidence that the two actions cannot in fact be brought together in the court first seised, to revoke its stay."
"…Article 28(3) would appear to be focussing on the question of principle i.e. whether the actions are so closely connected that it would be expedient to hear and determine them together to avoid the risk of irreconcilable judgments from separate proceedings. In particular, it does not seem to me necessarily to follow from the fact that it may not be capable of hearing the actions together in the court first seised because, as Mr Handyside would submit, of the existence of the jurisdiction clauses (in particular the exclusive jurisdiction clause in the ISDA Master Agreement governing the Asset Swap Transactions) that it would not, in principle, be expedient to do so. In my view, the focus of the definition (if that is what it is) in Article 28(3) is what in principle is "expedient" in the sense of genuinely desirable not what is "capable" or "possible". Of course, the fact that it may not be capable or possible to hear the actions together in the court first seised may provide an unanswerable or at least compelling argument in favour of the court second seised exercising the discretion under Article 28(1) to refuse a stay."
"In all the circumstances of this case, the fact that there will be no Cypriot proceedings unless the appellants succeed in their appeal in Cyprus, and the fact of the very lengthy delay in any progress in the Cypriot proceedings even if the appeal is allowed, are overwhelming factors against the grant of a stay of the English proceedings under article 30."
Ms Tolaney submitted that in contrast with that case, here the appeal to the Supreme Court of Ukraine was imminent (as to which she proved correct) and there was no question of a very lengthy delay in the progress of the proceedings in Ukraine.
"If there were shown to be a real possibility of consolidation of the related proceedings, that would be an additional, strong reason for exercising the discretion in favour of a stay, but it is not a condition of such exercise."
Ground 4: Quantum
"The unjust enrichment claim … appears hopeless when it is considered that, contrary to the appearance given by the Particulars of Claim, the English and BVI Defendants were no more than conduits for the US$1.91 billion to pass through en route for immediate return to the borrower or transfer to other offshore corporate entities (and then in many cases immediate return to the borrower and the Bank). The English and BVI Defendants were not enriched by acquiring US$1.91 billion or any money or rights. Para 79 of Mr Beketov's first expert report [i.e. evidence as to Ukrainian law] emphasises that a Defendant sued for unjust enrichment has to have benefited from the Bank's loss. It is clear, when the evidence about the nature of the scheme and what happened to the Relevant Loan money is properly analysed, that the English and BVI Defendants did not do so."
i) The scope of the pleaded case;
ii) Repayment of Relevant Loans;
iii) Tracing and linking; and
iv) Unjust enrichment.
The scope of the pleaded case
i) "the Third to Eighth Defendants acted as recipients of the monies transferred pursuant to the Misappropriation and signed sham documents pursuant to which they purported to agree to supply 46 Ukrainian companies with industrial equipment and/or commodities" 
Mr Howard pointed out that the English and BVI Defendants are here said to have "acted as recipients" of the misappropriated money;
ii) "The Borrowers agreed to make, and did in fact make, unreturned prepayments in an aggregate amount of c. US$1.91 billion" [25(a)]
Mr Howard suggested that this has to be read as referring back to the US$1.91 billion that has been said to have been misappropriated;
iii) Interest "should be calculated … from receipt of the relevant funds by the Defendant Suppliers" [64(a)]
This, Mr Howard argued, reflects the fact that the Bank's claims against all the defendants are founded on receipt by the English and BVI Defendants of the allegedly misappropriated funds;
iv) "Each of the Defendant Suppliers was unjustly enriched at the Bank's expense by reason of their involvement in the Misappropriation" in that "Each Defendant Supplier acquired property in the form of prepayments under the Relevant Supply Agreements" and "The said acquisition of property came at the expense of the Bank, in that the said monies were advanced by the Bank to the Borrowers pursuant to agreements which are shams and/or contrary to public policy and which are, accordingly, void" 
Mr Howard said that it is once again being alleged that the pre-payments were made with the money that the Bank had advanced to the Borrower under Relevant Loans; and
v) "The Borrowers entered into a large number of other supply agreements with the Defendant Suppliers and other companies. However as the prepayments they made thereunder were returned, those agreements are not directly relevant to the Bank's claim" [footnote 5]
This too, so Mr Howard argued, shows the Bank's concern with receipt of the alleged misappropriation.
"The Defendant Suppliers procured and/or assisted in the misappropriation of $1,911,877,385 from the Bank and procured and/or assisted in the subsequent concealment of the same. For the reasons particularised below, the actions, decisions and/or omissions of the Defendant Suppliers were unlawful because they deprived the Bank of its monies in a manner not provided for by the Constitution or other laws of Ukraine (contrary to Article 3(1)(2) of the Civil Code) and acted in a manner that violated the Bank's rights and with the intention to injure the Bank (contrary to Article 13 of the Civil Code).
a. The Defendant Suppliers assisted Messrs Kolomoisky and Bogolyubov in misappropriating $1,911,877,385 of the Bank's monies in the manner described in paragraphs 14 to 32 above….
b. In order that the Defendant Suppliers would be able to receive the funds being misappropriated from the Bank, they created and/or executed at least one Relevant Supply Agreement. The terms of the said agreements were commercially inexplicable and, in any event, none of the Defendant Suppliers had any intention or prospect of complying with the contractual obligations they purportedly assumed. In reality, the said agreements were shams and/or contrivances and/or served no commercial purpose, being devised and executed so as to further and/or disguise the Misappropriation.
c. The Defendant Suppliers received the funds transferred pursuant to the Misappropriation and thereafter failed to either (i) deliver goods in accordance with the Relevant Supply Agreements or (ii) repay the said funds to the Borrowers.
d. In order that the Misappropriation could be hidden from the Bank's auditors and/or the NBU [i.e. the National Bank of Ukraine], the English Suppliers each created and/or entered into the Loan File Supply Agreements."
i) The passage from  of the particulars of claim quoted in  (i) above alleges that the English and BVI Defendants "signed sham documents pursuant to which they purported to agree to supply 46 Ukrainian companies with industrial equipment and/or commodities" as well as that they "acted as recipients of the monies transferred pursuant to the Misappropriation";
ii) The overarching allegation in  of the particulars of claim (which is set out in  above) is simply that the English and BVI Defendants "procured and/or assisted in the misappropriation of $1,911,877,385 from the Bank and procured and/or assisted in the subsequent concealment of the same". The conduct of the English and BVI Defendants is, moreover, said to have been unlawful "because they deprived the Bank of its monies in a manner not provided for by the Constitution or other laws of Ukraine (contrary to Article 3(1)(2) of the Civil Code) and acted in a manner that violated the Bank's rights and with the intention to injure the Bank (contrary to Article 13 of the Civil Code)". At this stage in , there is no reference to the English and BVI Defendants having received misappropriated funds;
iii) The particulars given in  of the particulars of claim start with the allegation that the English and BVI Defendants "assisted Messrs Kolomoisky and Bogolyubov in misappropriating $1,911,877,385 of the Bank's monies in the manner described in paragraphs 14 to 32 above". Those paragraphs include allegations that the English and BVI Defendants entered into Relevant Supply Agreements and Loan File Supply Agreements which they had no prospect of fulfilling, were "commercially inexplicable" and were "shams and/or transactions that are contrary to Ukrainian public policy, in that they were not intended to create enforceable commercial obligations but were put in place on the instructions of Messrs Kolomoisky and Bogolyubov to hide their misappropriation of assets from the Bank" (see ,  and );
iv) Although [54(b)] of the particulars of claim opens with a reference to enabling the English and BVI Defendants "to receive the funds being misappropriated from the Bank", it goes on to allege that Relevant Supply Agreements "were shams and/or contrivances and/or served no commercial purpose, being devised and executed so as to further and/or disguise the Misappropriation";
v) While [54(c)] of the particulars of claim contains an allegation that the English and BVI Defendants "received funds pursuant to the Misappropriation", it proceeds to allege that they "failed to either (i) deliver goods in accordance with the Relevant Supply Agreements or (ii) repay the said funds to the Borrowers";
vi) [54(d)] of the particulars of claim alleges that the English Defendants "created and/or entered into the Loan File Supply Agreements" "[i]n order that the Misappropriation could be hidden from the Bank's auditors and/or the NBU";
vii)  of the particulars of claim alleges that "the actions of Messrs Kolomoisky and Bogolyubov and each of the Defendant Suppliers were interconnected, cumulative and carried out with a unity of intent such that each of the Defendant Suppliers is liable to compensate the Bank for the entirety of the loss and damage caused by the Misappropriation pursuant to Articles 22, 1166, 1190 and 1192 of the Civil Code". It has earlier been explained in paragraph 39 that, "[p]ursuant to Article 1190 of the Civil Code, when actions or inactions by two or more persons combine to cause damage (including where harm is caused by interconnected or cumulative actions or actions with a unity of intent) those persons shall assume a joint and several liability to the affected person for the entirety of the loss so caused";
viii) In the circumstances, the particulars of claim include, as it seems to us, a tortious claim founded on the English and BVI Defendants having assisted in the alleged misappropriation with unity of intent in a number of ways. True it is that the Bank alleges that the English and BVI Defendants received proceeds of that misappropriation, but the pleaded claim extends beyond that.
"I mean, Ukrainian law doesn't use the word 'conspiracy' but that's effectively what it is. They are all jointly and severally liable for inflicting harm on the bank."
"Even if the defendant Suppliers received prepayments under the Supply Agreements that, from a tracing standpoint, consisted of monies that were not extracted from the Bank via the Relevant Loans, this would not change my prior analysis. It would still remain the case that (i) each Defendant Supplier participated in the misappropriation of the Bank's monies via the Relevant Loans, and (ii) the Defendant Supplier's failure to perform the Supply Agreement after receiving prepayment thereunder, by either providing the relevant goods to the Borrower or returning the prepayment, deprived the Bank of the value of its collateral under the pledge agreements and the ability to pursue the Borrower for return of the loaned funds, thereby assisting and facilitating the misappropriation of its property."
"In addition, and though it is not necessary for the Bank to show as much, the Bank can also demonstrate that the drawdowns of the Relevant Loans and the transfers to [the English and BVI Defendants] are transactionally linked."
Similarly, in the course of the hearing Mr Smith QC, appearing for the Bank, told the judge that it was "not a necessary element of the claim in tort" that the money that the English and BVI Defendants received was the same as that which was lent to the Borrowers under the Relevant Loans, observing that "Ukrainian law doesn't require, for the purposes of a tort claim, the very same money has to pass from the borrowers to the suppliers" and that there is no need to undertake a "payment tracing analysis".
Repayment of Relevant Loans
Tracing and linking
"If it was not the same money drawn under the Relevant Loans as was used to make the Unreturned Prepayments, then it is unclear how the Unreturned Prepayments could nevertheless 'be regarded as derived from' the Relevant Loans. The Relevant Loans may have caused the Unreturned Prepayments, but not the other way round – and thus it is not the Unreturned Prepayments which cause the Bank's loss."
Mr Hunter focused on the words, "The Relevant Loans may have caused the Unreturned Prepayments", which, he said, confirm that the Bank has a good arguable case on the causation it alleges.
"Speaking in general terms, it is inappropriate to seek to set aside a freezing order for non-disclosure where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established, otherwise the application to set aside the freezing order is liable to become a form of preliminary trial in which the judge is asked to make findings (albeit provisionally) on issues which should be more properly reserved for the trial itself."
Toulson J made this point in the context of an application to set aside for non-disclosure, but it is of wider significance.
Ground 5: Non-disclosure
"In circumstances in which the court has no jurisdiction against the First and Second Defendants and the BVI Defendants and the claims against the English Defendants are stayed for the reasons given in paras 99-103 above in relation to the sole object of the claim against the English Defendants, and further bearing in mind their lack of any valuable assets, injunctive relief against the English Defendants should not be re-granted. Even if I had reached different conclusions on the jurisdiction and stay issues, I would as a matter of discretion have declined to re-grant a worldwide freezing order up to US$515m plus interest in view of the serious non-disclosure and misrepresentation that led to the grant of such an order up to US$2.6 billion in December 2017."
"In considering whether there has been relevant non-disclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following. (1) The duty of the applicant is to make 'a full and fair disclosure of all the material facts:' see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac  1 K.B. 486, 514, per Scrutton L.J.
(2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p. 504, citing Dalglish v. Jarvie (1850) 2 Mac. & G. 231, 238, and Browne-Wilkinson J. in Thermax Ltd. v. Schott Industrial Glass Ltd.  F.S.R. 289, 295.
(3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour  F.S.R. 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.
(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J. of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson  Ch 38; and (c) the degree of legitimate urgency and the time available for the making of inquiries: see per Slade L.J. in Bank Mellat v. Nikpour  F.S.R. 87, 92–93.
(5) If material non-disclosure is established the court will be 'astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure … is deprived of any advantage he may have derived by that breach of duty:' see per Donaldson L.J. in Bank Mellat v. Nikpour, at p. 91, citing Warrington L.J. in the Kensington Income Tax Commissioners' case  1 K.B. 486, 509.
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) Finally, it 'is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded:' per Lord Denning M.R. in Bank Mellat v. Nikpour  F.S.R. 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.
'when the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant … a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:' per Glidewell L.J. in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings Plc., ante, pp. 1343H–1344A."
"The principle is, I think, a thoroughly healthy one. It serves the important purposes of encouraging persons who are making ex parte applications to the court diligently to observe their duty to make full disclosure of all material facts and to deter them from any failure to observe this duty, whether through deliberate lack of candour or innocent lack of due care.
Nevertheless, the nature of the principle, as I see it, is essentially penal and in its application the practical realities of any case before the court cannot be overlooked. By their very nature, ex parte applications usually necessitate the giving and taking of instructions and the preparation of the requisite drafts in some haste. Particularly, in heavy commercial cases, the borderline between material facts and non-material facts may be a somewhat uncertain one. While in no way discounting the heavy duty of candour and care which falls on persons making ex parte applications, I do not think the application of the principle should be carried to extreme lengths."
"a. A fact is material if it is one which the judge would need (or wish) to take into account when deciding whether to make the freezing order.
b. Failure to disclose a material fact will sometimes require immediate discharge of the order. This is likely to be the court's starting point, at least when the failure is substantial or deliberate.
c. Nevertheless the court has a discretion to continue the injunction (or to impose a fresh injunction) despite a failure of disclosure; although it has been said that this discretion should be exercised sparingly, the overriding consideration will always be the interests of justice.
d. In considering where the interests of justice lie, it is necessary to take account of all the circumstances of the case including (without attempting an exhaustive list) (i) the importance of the fact not disclosed to the issues which the judge making the freezing order had to decide; (ii) the need to encourage proper compliance with the need for full and frank disclosure and to deter non-compliance; (iii) whether or to what extent the failure to disclose was culpable; and (iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts.
e. The interests of justice may sometimes require that a freezing order be continued, but that a failure of disclosure be marked in some other way, for example by a suitable order as to costs."
"In this context a failure may be regarded as 'innocent' if the fact in question was not known to the applicant or its relevance was not perceived. That was the sense in which the word was used by Ralph Gibson LJ in Brink's Mat at 1357D and the judgments of Balcombe LJ at 1358G and 1360H were to the same effect. Moreover in Behbehani v Salem  1 WLR 723 Woolf LJ expressly rejected at 728F-G a submission that a failure could not be regarded as innocent if the fact in question was not recognised as material but ought to have been, while Nourse LJ observed at 736F that 'in the Brink's Mat case all three members of the court defined an innocent non-disclosure as one where there was no intention to omit or withhold information which was thought to be material'. This formulation would rightly include as culpable blind eye knowledge, that is to say a decision not to investigate for fear of discovering facts which would have to be disclosed, but that is not this case. I am satisfied that all three failures in this case were innocent in the sense described."
"In my judgment, there were material facts on which the Defendants would have relied and of which the Bank was aware that should have been but were not explained to the Judge [i.e. Nugee J]. These were, in particular: that a very substantial proportion of the sums drawn down under the Relevant Loans were repaid to the Bank by the very same borrower, or by another of the forty-six Ukrainian borrowers, prior to the relevant prepayments to the English and BVI Defendants, and that in a substantial number of cases monies prepaid to the English and BVI Defendants between May and September 2014 were themselves, either directly or indirectly, repaid to the borrower and to the Bank, often on the same day. The Bank must have been aware of this because it would inevitably have sought to identify where the money went. There is evidence that it did carry out an exercise of following the money in the case of AEF LLC. These facts would have been immediately apparent from a first study of the bank statements of the borrowers and the English and BVI Defendants (and their alleged principals), all of which held accounts with the Bank. If the Bank did not actually know those facts then it undoubtedly should have done because it should have carried out investigations before applying for the extensive relief that it did."
In paragraph , the judge said:
"A more complete factual picture would have led the Judge to question whether the quantum of any arguable claim of the Bank (on the basis pleaded) was not considerably overstated, for all the reasons that have led me to conclude that there is no good arguable case (on the basis pleaded) in excess of about US$515 million."
"As is explained below, the Bank has attempted to discover what happened with the funds paid to the Defendant Suppliers, and has some information in that regard as the money was paid to them in PrivatBank Cyprus accounts. It appears, however, that the money was split up and paid on quickly to a significant number of further companies in such a way that it has not been possible to discover where it now resides, but it is anticipated that one or more of the Defendants will know, and that the grant of freezing and disclosure orders – before there is time to dissipate the money any further – will provide the Bank with the best chance of securing the funds."
Lord Justice Newey: