MOSCOW, November 9 - RAPSI, Ingrid Burke. Russian banking giant VTB was handed a mixed bag by London’s High Court of Justice Thursday in its claims for an expansion of the injunctive relief it was granted against defendants Pavel Skurikhin, Pikeville Investments LLP, and Perchwell Holdings LLP in August. Specifically, Justice Gloster ruled in VTB’s favor in granting the further disclosure it had sought against Skurikhin and in granting it permission to seek enforcement of a freeze order against Pikeville’s Italian assets, but ruled against the bank in its efforts to seek further disclosure from Perchwell, or to seek enforcement of a freeze order against its Cypriot assets. 

Parties and factual background

VTB is state-owned and the second largest bank in Russia.

Skurikhin, a Russian national, is founder and controller of the Siberian Agrarian Holding Group (SAHO), a group of businesses specializing in the production and sale of various agricultural products, such as pesticides and grains. VTB issued numerous substantial loans to SAHO businesses between 2007 and 2009, all of which were guaranteed by Skurikhin personally in 2009, and then renewed in 2010. VTB claims the SAHO businesses have defaulted on at least 18 of these loans.

Pikeville and Perchwell are both LLPs that were incorporated in England and Wales, Pikeville in 2002 and Perchwell in 2007. VTB charges that Skurikhin either owns or enjoys a controlling interest in both companies. Pikeville owns a fair amount of property in Italy, and Perchwell holds 100% of the issued share capital of Tunnelson Holdings Ltd. in Cyprus, which, in turn, is the holding company of some of the SAHO group businesses.

Procedural background

VTB sued the borrowers and guarantors in Russia. These proceedings lasted from December 2011 to February 2012. In total, the bank sought approximately £12.7 million in damages arising from the 18 defaulted loans. Although judgments have been handed down against various of the borrowers, none has yet been satisfied.

In July 2012, VTB sued Skurikhin himself in a Russian court over his failed guarantees. The bank was awarded approximately £600,000 against him in September.

In August 2012, the London High Court’s Justice Hamblen granted injunctive relief in support of VTB’s case against Skurikhin. Specifically, Hamblen ordered the freezing of Skurikhin’s assets in England and Wales up to the value of £10 million. The injunction included his rights and interests in Pikeville and Perchwell, and any debt owed to him by the former. The justice further ordered an international freeze on Pikeville and Perchwell’s respective assets, up to the value of £10 million. The Italian properties and Tunnelson were mentioned expressly in the order.

Justice Hamblen further ordered the parties to disclose certain information, including: all assets within the freezes’ respective realms of applicability, the identity of a creditor owed €19 million by Pikeville, and the identity of the person/s with ultimate beneficial control over Pikeville and Perchwell.
After the defendants produced the disclosure information, VTB sought further disclosure, as well as permission to enforce the asset-freeze against Pikeville’s Italian properties. These claims gave rise to Thursday’s order.

Thursday’s decision

In granting VTB’s request for further disclosure from Skurikhin, Gloster explained that without further disclosure the court will have an exceedingly difficult time determining the legal nature of Skurikhin’s interests in Pikeville and Perchwell. Toward this end, without further disclosure, the court and VTB will face difficulty in monitoring the freeze on Skurikhin’s assets.

In granting VTB’s request for permission to seek enforcement of the freeze of Pikeville’s Italian assets, Gloster noted that Pikeville is expressly restrained by Hamden’s injunction, and reasoned accordingly that, “given the opaque nature of the corporate and trust structures relating to the ownership of what might loosely be referred to as Mr. Skurikhin’s assets, and the evidence which at least, on its face, suggests that attempts have been made to render his personal assets judgment proof, it is entirely appropriate that steps are taken in the relevant local jurisdiction to seek to enforce the orders of this court, and to register the appropriate restrictions in the Italian Land.”

In denying VTB’s request for the disclosure by Perchwell of the nature and value of assets held by three of its subsidiaries, including Tunnelson, Gloster pointed out that the injunction applied to Perchwell’s shares in the subsidiaries – not to the subsidiaries’ underlying assets. The justice asserts that an injunction reaching that far would have been an overreach of jurisdiction and a rejection of precedential case law.

In a similar vein, in denying VTB’s request for permission to seek enforcement of the freeze of Perchwell’s Cypriot assets, Gloster reasoned that such would extend beyond the scope of Hamblen’s injunction, which did not pertain to the subsidiaries’ underlying assets. She pointed out as well that it had not been made clear to her how such enforcement would provide VTB with greater protection against the disposal of such interests than do the preexisting orders. Gloster further noted that such enforcement could expose Perchwell and others to far-reaching and uncertain litigation in Cyprus.