Russian invasion delays PrivatBank’s $4.2 billion sham loan lawsuit

0

” href=”https://www.law360.com/corporate-crime-uk/articles/1477988/#”>Christopher Crosby


By
Archive


Email to Christopher Crosby

” href=”https://www.law360.com/corporate-crime-uk/articles/1477988/#”>Christopher Crosby Law360, London (March 28, 2022, 7:25 p.m. BST) – A judge has dismissed PrivatBank Lawsuit for $4.2 billion fraud against the former owners of the Ukrainian lender on Monday after citing their lawyers’ warnings that the businessmen, who live in Ukraine, face an ‘existential threat’ from Russian invasion .

High Court Judge William Trower canceled the June trial date after lawyers for Igor Kolomoisky and Gennadiy Bogolyubov argued the men could not focus on the high-profile fraud case in a war zone.

State-owned commercial bank PJSC PrivatBank was to set out its case that Bogolyubov, Kolomoisky and six related companies orchestrated the embezzlement of its funds in a fraudulent scheme.

Instead, the judge ordered the men’s lawyers to see if the case could be relisted for June 2023.

Judge Trower delivered a brief oral judgment at the end of the hearing, saying he was convinced that there could be no fair trial in three months. The judge said he would try to deliver a detailed judgment later this week.

The court’s decision to adjourn the trial came after a day-long hearing in which the men’s lawyers argued it would be unfair to force them to instruct their lawyers in London after fleeing their residence.

Mark Howard QC, Kolomoisky’s lawyer, said his client, a former governor of Crimea, was on Russian President Vladimir Putin’s “blacklist” and was at risk of being “eliminated” because of his status as a “figure figurehead” in Ukraine.

Howard said it was difficult to get instructions from his client and strongly rebuffed the bank’s suggestion that witnesses could testify as many were forced to flee and feared for their lives.

“Ukraine is a war zone. Bombs and missiles are raining down. Air raid warning alarms go off. Howard said.

He defended Kolomoisky’s refusal to say his whereabouts, saying Putin “had him in his sights” and that he could be assassinated en route to safety to hear the trial. Even if a peace deal is reached quickly, it will take time for the country to rebuild, he said.

Clare Montgomery QC of 3 Verulam Buildings, Bogolyubov’s lawyer, said her client had moved to the relative safety of western Ukraine, where fighting had been less intense, but he still had struggling to meet basic needs such as food and water.

Bogolyubov can chat over Wi-Fi, but it doesn’t support phone calls, and it’s dangerous to use a cellphone because location can easily be tracked, Montgomery said.

Privatbank’s lawyers, meanwhile, lamented the “appalling violence”, but argued that there was insufficient evidence to support the defendants’ adjournment request and that the hands of the court were therefore related.

They told the judge that their claims were “pure assertions” and that the men may be living far from any immediate danger. They asked the court to postpone its decision until May, when there could be a peace agreement or more information on the men.

Ukrainians use video conferencing to communicate, and it appears some witnesses expected to testify at trial are spending “hours” on the phone every day, said Andrew Hunter QC of Blackstone Chambers, the bank’s solicitor. There’s a “deafening silence” about why the men can’t participate in the trial, Hunter said.

PrivatBank does not dispute the difficulties, but Kolomoisky is not a member of the armed forces and there is no evidence that he was part of the resistance, Hunter said.

The preliminary examination of the case is expected to continue on Tuesday.

The bank alleges the men used fictitious transactions related to the supply of raw materials and industrial equipment to embezzle $1.9 billion from the bank. Including interest, that claim is now worth $4.2 billion, PrivatBank said on Monday.

The former owners, whose assets have been frozen since 2017, strongly deny wrongdoing and have called the litigation “politically motivated” and “ill-conceived”. The English and Ukrainian companies allegedly linked to the agreements have also denied wrongdoing

Men put aside the matter in matters of jurisdiction before the Court of Appeal relaunched it in 2019.

PrivatBank is represented by Andrew Hunter QC of Blackstone Chambers, appointed by Hogan Lovells.

Kolomoisky is represented by Mark Howard QC, appointed by Fieldfisher LLP.

Bogolyubov is represented by Clare Montgomery QC, Matthew Parker and Nathaniel Bird of 3 Verulam Buildings, under the direction of Skadden Arps Slate Meagher & Flom LLP.

Rossyn Investing Corp., Milbert Ventures Inc. and Zao Uktransitservice Ltd. are represented by Sonia Tolaney QC of One Essex Court, Thomas Plewman QC of Brick Court Chambers and Marc Delehanty of Littleton Chambers, on behalf of Pinsent Masons LLP.

The case is PJSC Commercial Bank PrivatBank v Igor Valeryevich Kolomoisky and others, Case Number BL-2017-000065, in the High Court of England and Wales.

–Edited by Joe Millis.

For a reprint of this article, please contact [email protected]

Share.

Comments are closed.