CYK successfully obtains summary judgment for Domidias Limited and Merbau Synergy Limited: latest in Magomedov saga

6 March 2024:  The Commercial Court (Dame Clare Moulder DBE) has today handed down summary judgment in Domidias Limited & Or v Sian Participation Corp. (In Liquidation) & Or [2024] EWHC 458 (Comm) in favour of Domidias Limited (“Domidias”) and Merbau Synergy Limited (“Merbau”), the latest instalment in the litigation being pursued by Mr Ziyavudin Magomedov (a Russian oligarch who was jailed in 2022 for 19 years on fraud and embezzlement charges).

CYK’s successful team of Lydia Danon (Partner), Emily Davies (Associate), and Jordan Waldock (Senior Associate) act for Domidias and Merbau together with Blair Leahy KC of 20 Essex St and Donald Lilly of 4 Stone Buildings.

Proceedings were commenced in 2021 by Sian Participation Corp. (In Liquidation) (“Sian”) and Hellicorp Investments Ltd (“Hellicorp”), vehicles within Mr Magomedov’s investment structure. In essence, the claims concerned the alleged exercise of a Call and Put Option Agreement entered into in 2012 (“2012 Option Agreement), and another further purported Call and Put Option Agreement said to have been entered into in 2019 (“Alleged 2019 Option Agreement”), which would have given the Claimants certain options over shares in Russian shipping giant, Far Eastern Shipping Company PJSC (“FESCO”).

Domidias filed for summary judgment in January 2023, with the application being heard before Dame Moulder on 12 – 14 February 2024. The issues for determination centred upon: (1) the construction of the 2012 Option Agreement, and importantly whether it had expired prior to its purported exercise by the Claimants; (2) whether the Alleged 2019 Option Agreement was in fact entered into; and (3) whether certain parts of the Particulars of Claim relating to allegations of conspiracy should be struck out.

Finding wholly in favour of the Defendants and their construction of the 2012 Option Agreement, Dame Moulder held that there was “no commercial rationale” for the manner in which the Claimants sought to construct the agreement. Rather, Dame Moulder found she was “entitled to prefer the construction which is consistent with business common sense” and supported by the context taking the agreement as a whole, in line with the ordinary and natural meaning, being that of the Defendants. Accordingly, it was held that the option under the 2012 Option had expired prior to its purported exercise (the 2012 Option Agreement having been terminated on 28 November 2019).

On the basis of the contemporaneous evidence, Dame Moulder was also satisfied that the Alleged 2019 Option Agreement had not been concluded. Critically, there was nothing in the evidence which supported the Claimants’ case that the Alleged 2019 Option Agreement had been accepted by the Claimants (and that acceptance had been communicated to the Defendants), and Dame Moulder was satisfied that disclosure would not materially add to or alter the evidence available at trial. It was also emphasised that the Claimants’ alleged conspiracy in relation to the purported entry into the Alleged 2019 Option Agreement was no more than a “theory” which was not supported by any evidence, Dame Moulder stated that “in my view this is in the category of a speculative case where the Claimants merely hope that disclosure will throw up something useful”.

It was unnecessary for Dame Moulder to make any findings in relation to the Defendants’ strike out request given the Defendants’ summary judgment application was wholly successful.

The Defendants were also successful in obtaining their costs of the application and the proceedings together with a payment on account. Dame Moulder also refused the Claimants’ request for permission to appeal in respect of the 2012 Option Agreement (the Claimants not electing to seek permission in relation to other aspects of the decision).

CYK continues to act for Domidias (together with Blair Leahy KC and Donald Lilly) and Mr Andrey Severilov in the defence of a related alleged US$14billion conspiracy claim by Magomedov and associated corporate entities in the Commercial Court. This latest development comes after CYK successfully defended a failed attempt by Mr Magomedov to seek a US$8.8billion freezing injunction in October 2023.