MOSCOW, March 13 – RAPSI. Sovcomflot failed last week in its attempt to recast a series of alleged bribes carried out by former director general Dmitri Skarga as crimes under English as opposed to Russian law in the appeals division of London’s High Court of Justice.

While Sovcomflot vowed to continue the battle which has by now spanned upwards of six years in the Supreme Court, Skarga’s legal team view this as an unrealistic option.

The initial judgment in the case had consisted of four claims.

The first Fiona Action was initiated by Sovcomflot alleging that Skarga and Niktin had engaged in dishonest conduct detrimental to the interests of Sovcomflot, but beneficial to the interests of Nikitin and various of his companies. Privalov and Borisenko were also alleged to have participated in the wrongdoing.

The Intrigue Action was initiated by JSC Novorossiysk Shipping Co. (NSC) alleging that Izmaylov and Nikitin had engaged in transactions detrimental to the interests of NSC, but favorable once again to Nikitin and his companies. Privalov was also implicated in this claim.

The court established that central to the case would be the claimants’ ability to establish: “(i) that Mr. Skarga or, as the case might be, Mr. Izmaylov acted dishonestly in relation to the transaction in question, and (ii) that Mr. Nikitin acted dishonestly in relation to the transaction and through him the relevant corporate defendants acted dishonestly.”

Another claim was initiated by Nikitin and his company Milmont Finance Ltd. alleging under part 20 of the Civil Procedure Rules that H. Clarkson & Sons Ltd. were liable “for sums in respect of business that they handled for companies in the Sovcomflot group.”

A fourth claim was initiated by the Southbank Companies, which are owned by Nikitin, alleging entitlement to damages from Clarkson pending a finding of wrongdoing based on the second Fiona claim.

The court held in December 2010 that all claims against Skarga and Izmaylov should be dismissed.

While a number of claims against Nikitin and his co-accused were dismissed, they were held liable for a series of wrongdoings relating to a small number of the schemes they were alleged to have been involved in.

Of the settlement agreements already reached, the court granted that $15 million would be credited against the Fiona/Clarkson settlement.

The part 20 claims were both dismissed.

In March of the following year, the court issued a supplemental judgment concerning claims that Nikitin had effectively bribed Skarga.

In this latter opinion, the judge rejected the idea that holidays and a credit card given to Izmaylov constituted bribery for purposes of proving Izmaylov’s dishonesty under Russian law.

Sovcomflot then launched the present appeal in an effort to recast the bribery claims under English law.

According to a statement released by Sovcomflot Monday, “In the original High Court (Commercial Court) trial, Mr Justice Smith found that Mr Nikitin had conferred on Mr Skarga benefits which under English law would amount to bribes. Apart from maintaining that English law applied the Fiona Appellants case was that Mr Justice Smith should also have found that Messrs Nikitin and Skarga were both dishonest in paying and receiving the identified benefits (including holidays and the provision of a credit card), and in continuing to transact business between the companies of Mr Nikitin’s and those of Sovcomflot.” [Sic.]

Speaking with RAPSI Tuesday, Skarga’s lead attorney Louis Flannery of the law firm Stephenson Harwood explained that the disputed transactions were properly treated under Russian law in the original case because they occurred in Russia between two Russian businessmen. According to Flannery, the only nexus to England is the fact that several months later the two entered into a transaction that was subject to English law.

Sovcomflot noted in its statement that the Fiona appellants are now considering launching an appeal with the Supreme Court.

When asked by RAPSI for his thoughts on the likelihood of an appeal, Flannery voiced his doubts over whether an appeal would even be accepted. He explained that in standard practice, when judges toss out an appeal during the course of proceedings such as was the case here, it can be taken as “a sign that it is such a bad appeal that they don’t even need to hear any more.”