Magomedov & Ors v TPG Group Holdings (SBS), LP & Ors

Background

The claim involved two alleged conspiracies which the Claimants alleged to be separate but related. The “NCSP Conspiracy” related to an interest that the First Claimant (Mr Magomedov) had in PJSC Novorossiysk Commercial Sea Port (“NCSP”), a commercial seaport in Russia. The NCSP Conspiracy was said to have involved the Tenth Defendant (“Ms Mammad Zade”) and the Twentieth Defendant (“Transneft”), a Russian state-owned oil pipeline company. The “FESCO Conspiracy” related to Mr Magomedov’s stake in the Nineteenth Defendant (“FESCO”), a Russian company which was the parent company of a group which owned another commercial seaport in Russia. The FESCO Conspiracy is said to have involved Ms Mammad Zade and all other Defendants except Transneft.

Mr Magomedov is a former Russian oligarch who has been imprisoned in Russia from 2018 charged with organised crime and embezzlement. Mr Magomedov’s case was that the two Conspiracies formed part of a campaign waged against him by and on behalf of the Russian state for political reasons, with the aim of taking assets from him for the benefit of the Russian State.

The First to Seventh Defendants made a strike out/summary judgment application in relation to the claims pleaded against them. The other Defendants all brought jurisdictional challenges and a number of the Defendants made alternative applications, including to set aside service or alternative service. All the Defendants argued that the Claimants’ case did not raise a serious issue to be tried. The Defendants who challenged jurisdiction also (i) disputed the applicability of the jurisdictional gateways relied on by the Claimants and contended that England was not the appropriate forum for the claims; and (ii) disputed that there was a real connection with England and contended that the natural forum for the claims was Russia. In relation to the alleged FESCO conspiracy, most of the Defendants said that if the claims could not be tried in Russia, the most appropriate forum was Cyprus.

The Judge heard three weeks of submissions: two weeks in relation to the alleged FESCO Conspiracy in September 2024 and one week in relation to the NCSP conspiracy in November 2024.

NCSP Conspiracy

The Claimants case in the NCSP Conspiracy was that after Mr Magomedov was arrested and imprisoned, Ms Mammad Zade communicated a message to Mr Magomedov that the director of Transneft had indicated that he would speak to President Putin to secure the release of Mr Magomedov and his brother from prison if they first agreed to sell relevant shares in a company (“Port Petrovsk”) to Transneft for a reduced price of US$750 million. The Claimants say that Mr Magomedov and his brother did not agree to these terms, but nevertheless an agreement for sale was concluded with Transneft for that allegedly reduced price.

The Claimants alleged that the threat by Transneft gave rise to various wrongs, and that Ms Mammad Zade instructed or pressured the director of Port Petrovsk to authorise the sale in breach of her fiduciary duties owed to Port Petrovsk as a shadow or de facto director.

The Judge found that (i) there were serious breaches of the duty of full and frank disclosure in relation to the NCSP Conspiracy and specifically the question of whether the sale of the Port Petrovsk shares was authorised; (ii) the pleadings did not give rise to a good arguable case or a series issue to be tried as against either Transneft or Ms Mammad Zade; and (iii) that, in any event, the law applicable law to the NCSP Conspiracy is Russian law, and that there is a substantive time-bar defence under Russian law.

FESCO Conspiracy

In relation to the FESCO Conspiracy, the Judge held that the Claimants had no real prospect of success and/or there was no serious issue to be tried against a number of the Defendants, including anchor defendants. The Judge found that none of the jurisdictional gateways relied on by the Claimants were available to them.

The Judge concluded that even if the Claimants had succeeded in establishing that there were serious issues to be tried and that they could rely on one of the jurisdictional gateways, he would have concluded that although Russia was the natural forum for the dispute, the Court should decline jurisdiction in favour of Cyprus.

Breaches of Full and Frank in Relation to Ms Mammad Zade

Ms Mammad Zade was a core Defendant, in that she was the only Defendant to have claims against her in relation to both the NCSP Conspiracy and the FESCO Conspiracy, and was alleged to have played a central role in both. Notwithstanding her centrality, Ms Mammad Zade was served eight months after the rest of the other Defendants because the Claimants contended that they did not know where Ms Mammad Zade was living. The Judge found that the Claimants knew that Ms Mammad Zade had for a while been living in Vienna and that the Claimants presentation when seeking service out, an extension of time to serve the claim form, and then when seeking an order for alternative service lacked candour. On that basis, the Judge set aside the orders for extension of time for service and for service by alternative means.

Leona Powell and Marlena Valles acted for Leyla Mammad Zade (the Tenth Defendant), instructed by Fox Williams.

Anthony Peto KC and Peter Head acted for Konstantin Kuzovkov (the Thirteenth Defendant), instructed by Mischon de Reya.

The judgment is available here.