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Published 3 November 2016
The Commercial Court grants summary judgment to bank seeking to enforce foreign judgments against a Russian National in England.
OJSC Bank of Moscow ("the Bank") applied for summary judgment in a claim to enforce three Russian judgments against Mr Chernyakov, a Russian national resident in England (the "Russian Judgments"). The co-defendants were Ms Evokhova, Mr Chernyakov's wife, and Norwind Shipping Limited, a BVI company owned and controlled by Mr Chernyakov. Mr Chernyakov resisted enforcement of the Russian Judgments on grounds of public policy and human rights.
The Commercial Court unambiguously dismissed Mr Chernyakov's arguments as having been "contrived to camouflage the true position" and found for the Bank. The court's reasoning follows that in the 2014 decision of JSC VTB Bank v Skurikhin and Others, and confirms that the English courts will not indulge parties advancing contrived arguments with an aim to avoid, or delay, the proper enforcement of foreign judgments.
Mr Chernyakov was the President of OOO Nauchno-Proizvodstvennoe Obedinenie Kosmos ("Kosmos"). The Bank had provided finance to Kosmos under various loan facilities and letters of credit. As part of such finance arrangements, Mr Chernyakov had signed personal guarantees in 2013. Kosmos was declared insolvent in March 2015, and the Bank subsequently sought to enforce the personal guarantees against Mr Chernyakov. Three judgments were entered for the Bank in Russia.
In the UK proceedings for enforcement, the Bank argued that these were straightforward claims to enforce three binding and conclusive judgments and that Mr Chernyakov had no arguable defence to the application for summary judgment
In his defence, Mr Chernyakov argued that there were triable issues that the Russian Judgments had been procured by the fraud of the Bank, given in violation of principles of natural justice and in breach of the right to a free trial in Article 6(1) of the European Convention on Human Rights ("ECHR") and further that their enforcement would be contrary to public policy. Additionally Mr Chernyakov argued that there were compelling reasons as to why his claims should not be dismissed.
(1) Mr Chernyakov's first argument – the Russian Judgments had been given in violation of principles of natural justice
(2) Mr Chernyakov's second argument – the Russian Judgments had been procured by the fraud of the Bank
(3) Mr Chernyakov's third argument – the Russian Judgments had been given in breach of Article 6 of the ECHR
(4) Mr Chernyakov's fourth argument – Enforcement of the Russian Judgments would be contrary to principles of public policy
The facts of the case were not unusual; they depict a dispute that regularly occurs between a bank and its customers. In the present case it was clear that the Bank had a genuine and fair claim, and enforcement was granted. Mr Justice Cranston's reasoning in this judgment should give comfort to foreign parties looking to enforce judgments in the UK.
It is interesting to note that Mr Justice Cranston made reference to Mr Chernyakov's conduct, and the inconsistencies in his arguments, several times. He concluded that Mr Chernyakov had contrived arguments in order to camouflage the true position, and made it clear that an English court will not have sympathy for those who conduct litigation without integrity.
There have long been attempts to undermine the validity of Judgments obtained in foreign jurisdictions, particularly those jurisdictions where political and cultural differences are striking. However, that does not mean that judicial decisions coming out of those jurisdictions will be viewed as inherently flawed and subject to challenge. The English Court will rightly be slow to find such judgments unsafe and subject to challenge and the onus remains on the applicant to produce strong evidence in support of their claims.
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