EUPillar Joint Stock Company “Aeroflot – Russian Airlines v Berezovsky & Ors [2013] EWCA Civ 784

Summary

The claimant, Aeroflot, was a Russian airline. The individual defendants, Mr Berezovsky and Mr Glushkov, were domiciled in England. There were also corporate defendants from the Forus Group, domiciled across Europe. The claimants alleged that the individual defendants, through various companies, defrauded Aeroflot of over $99 million. Jurisdiction was established against the individual defendants. The corporate defendants challenged the jurisdiction of the English court. It should be noted that the English court made the following observations about the corporate defendants: “[…] Those companies are respectively domiciled in Luxembourg, Cyprus, Switzerland and the British Virgin Islands. I will refer to them, as Floyd J did in the judgment appealed, as follows: first, the third defendant, which is the Luxembourg parent company, I will refer to as “Holdings”. It was formed by Mr Beresovsky in 1992. He and Mr Glushkov were directors of Holdings for some time, although Mr Berezovsky's case is that he resigned in November 1996. Secondly, Holdings' subsidiaries, which are, respectively, the fourth, fifth and seventh defendants, will be referred to as “Cyprus”, “Services” and “Finance”. The sixth defendant, which I shall call “Leasing”, is also domiciled in Switzerland. It took no part in the applications before Floyd J or on the appeal. I will call the corporate defendants generally “the Forus companies”. [2] The High Court upheld the jurisdictional challenge by the fifth defendant, successfully invoking a jurisdiction agreement. It dismissed the other jurisdictional challenges, including the one by the fourth defendant that invoked an arbitration agreement which Mr Justice Floyd held was null and void or inoperative. The Court of Appeal allowed the fourth defendant’s appeal, holding that the English court did not have jurisdiction over the claims against the fourth and fifth defendants because they had successfully invoked jurisdiction clause and arbitration agreement, respectively. It was further upheld that the English court had jurisdiction under Article 6(1) over the claim against the Luxembourg parent company. Lord Justice Aikens held: “108 […] I think that a straightforward requirement that, in an Article 6(1) case, the claimant must establish a ‘good arguable case’ or ‘serious issue to be tried’ against the non-domiciled defendant is inconsistent with the ‘autonomous’ construction of Article 6(1) taken by the ECJ in Freeport plc v Arnoldsson. Insofar as the Forus argument might be that Aeroflot has joined Holding so as to establish English jurisdiction and to avoid the Luxembourg court having jurisdiction in any dispute against Holdings, that consideration is impermissible, as Freeport plc v Arnoldsson makes plain. […] 112 […] If Aeroflot pursues Services it must do so (on my ruling) in the Lausanne court and if it pursues Cyprus it must do so in arbitration. So, necessarily, there are going to be different tribunals that deal with each of these claims. That is simply the result of the jurisdictional agreements made between the parties. It has nothing to do with the claims against the individual defendants, which must be brought in England under Article 2 of the Judgments Regulation. Mr Tregear suggested at one point that Aeroflot could pursue the individual defendants in any proceedings against Services in Lausanne. That is wrong, because the individual defendants are entitled to be sued in their state of domicile and now that the English Court is seised of that matter, it would be impossible for the Swiss court to take over such proceedings. It is from the fact that Aeroflot has rightly chosen England as the ‘anchor’ forum against the individual defendants that it is entitled to rely on Article 6(1) to sue Holdings in England.” [108 and 112].