On appeal from: [2012] EWCA Civ 808

The Supreme Court, by a majority of three to two (Lord Clarke and Lord Reed dissenting), dismisses the jurisdiction appeal, so that VTB may not serve out of the jurisdiction; unanimously dismisses the corporate veil appeal, so that VTB is not permitted to amend its pleaded case to include a claim that Mr Malofeev, Marcap BVI and Marcap Moscow should be treated as jointly and severally liable with RAP for breaches of two of the agreements and finally, unanimously discharges the freezing injunction obtained by VTB against Mr Malofeev’s assets. Regarding the jurisdiction appeal, the issues, oral and documentary evidence are focused on Russian witnesses and overwhelmingly on matters which happened in and concern Russia. The issue of governing law cannot have been decisive in the judge’s decision. Whilst agreements relevant to VTB’s claims contained non-exclusive jurisdiction clauses in favour of England, such clauses in this case are, as the judge said, not particularly strong factors in favour of English jurisdiction. There is therefore no basis on which the Supreme Court would be justified in re-exercising the power to decide for itself the jurisdictional issue.

Regarding the corporate veil appeal, VTB may not amend its pleaded case to include a claim on piercing the corporate veil of RAP in order to attach liability to Mr Malofeev, Marcap BVI, and Marcap Moscow, because VTB’s proposed case does not give rise to arguable grounds for contending that the jurisdiction to pierce the corporate veil can be invoked. This is an interlocutory appeal, and so it is unnecessary and inappropriate to resolve the issue of whether, unless any statute relied on in the particular case expressly or impliedly provides otherwise, the court is entitled to pierce the veil of incorporation.

Finally, the worldwide freezing order against Mr Malofeev is discharged, because VTB has not been granted permission to serve proceedings on him.

For judgment, please download: [2013] UKSC 5

For Court’s press summary, please download: Court’s Press Summary

For a non-PDF version of the judgment, please visit: BAILII