Bird & Bird's London Dispute Resolution team defeats £50 million claim brought by leading Russian Bank

07 May 2015

Bird & Bird & First for Disputes 

Sophie Eyre, Patrick Gilfillan and Mila Navitskaya from our London Dispute Resolution team have successfully defended a claim brought by OJSC VTB Bank (VTB), one of Russia's leading banks, against our clients.

VTB was claiming for liability for losses it suffered as a result, it said, of the actions of a UK shareholder company (Parline Limited), a director of shareholder company (Bulgakov) and the chairwoman of the group of companies in the transport and infrastructure sector (Parshina). There are 50 companies in the group.

VTB brought claims under both English and Russian law but was required, following a strike out application by our team, to withdraw all English law tortious claims including conspiracy to injure and conspiracy by unlawful means. The trial proceeded under Russian law alone with VTB claiming that shareholders and company controllers could be liable for losses it suffered.   

VTB alleged that the defendants had procured a loan for one of the group companies from VTB then allegedly directed non repayment of a loan instead purchasing RUB 1 billion of bonds in another group company. It was also alleged that the defendants had instructed the dissipation of reducing of company assets by selling its rolling stock during the financial crisis in 2009 with the company subsequently becoming insolvent.

Bird & Bird's team argued that VTB was seeking to circumvent company law on the liabilities of shareholders, directors and beneficial owners and the rules on limited liability. We also argued that any claim could not be brought by a creditor against third parties during the course of ongoing insolvency proceedings as, until the conclusion of the insolvency, liabilities would not be known. The Judge agreed with the defendants on all grounds.