MOSCOW, February 6 - RAPSI. The UK Supreme Court upheld Wednesday an earlier decision to set aside leading Russian bank VTB’s service of process on Russian businessman Konstantin Malofeev and several companies owned by him, and thus to lift a worldwide freeze on Malofeev’s assets.

In 2007, VTB agreed to provide dairy product production company Russagroprom with a $225 million loan toward the purchase of several dairy companies from Nutritek International Corp. Russagroprom defaulted on its loan the following year. Claiming that he only entered the agreement based on Nutritek’s misrepresentations, VTB sued Nutritek, its owner Konstantin Malofeev, and two other companies owned by Malofeev, charging that all four were jointly and severally liable for the misrepresentations that had prompted it to approve the loan.

After being served with process, the defendants objected to the forum and sought for service to be set aside.

VTB then sought to amend its complaint in hopes of piercing Russagroprom’s corporate veil. In doing so, VTB hoped to advance a theory that Malofeev and two companies owned by him were jointly and severally liable for Russagroprom’s default.

VTB lost at first instance and on appeal before turning to the Supreme Court.

The Supreme Court began with a consideration of the propriety of having set aside the service of process to defendants outside of the court’s jurisdiction, holding: “In a case such as this, if a court is not satisfied that England is clearly the appropriate forum in which to bring a claim, then permission to serve out must be refused or set aside.” Citing the deference appellate courts owe first instance courts in terms of forum determinations, the Supreme Court held that it would be inappropriate to intervene in the earlier decision.

The Court then held that VTB was not entitled to amend its complaint as the jurisdiction of UK courts to pierce Russagroprom’s corporate veil had not been adequately established.