OJSC Bank of Moscow v Chernyakov & Ors

Factual and Procedural Background

The Bank, a subsidiary of a major Russian government-owned bank, applied for summary judgment against the first defendant to enforce three judgments from a Russian court totaling approximately 150 million roubles. The first defendant was formerly president of a large Russian construction holding company declared insolvent in 2015, which had significant contracts with the City of Moscow. The three Russian judgments were rendered by the Meshchansky District Court in Moscow, with appeals and cassation applications either dismissed or adjourned. The Bank's claims are based on personal guarantees provided by the defendant in relation to loan facilities and a bank guarantee issued to a third party. The defendant contests enforcement in England, alleging fraud, breach of natural justice, violation of fair trial rights under the European Convention on Human Rights (ECHR), and public policy grounds.

The English court proceedings include an application for summary judgment and a worldwide freezing order against the defendant and related parties. Expert reports and witness statements were submitted, and the defendant’s draft defence alleges a conspiracy involving the third party and the City of Moscow to force the insolvency of the defendant’s company for ulterior motives.

Legal Issues Presented

1. Whether the English court should enforce the three Russian judgments against the defendant.
2. Whether there are triable issues that the Russian judgments were procured by fraud.
3. Whether the Russian judgments were obtained in breach of natural justice, including valid service and notice of hearings.
4. Whether enforcement would violate the defendant’s right to a fair trial under Article 6(1) ECHR.
5. Whether enforcement of the Russian judgments would be contrary to English public policy.
6. Whether there are other compelling reasons why the claims should not be disposed of without a trial.

Arguments of the Parties

Bank's Arguments

• The Russian judgments are binding, final, and conclusive, based on personal guarantees given by the defendant.
• The defendant has no arguable defence to enforcement, and the proceedings are straightforward claims for debt recovery.
• The defendant is attempting to delay enforcement through parallel proceedings and challenges in Russia and other jurisdictions.
• The Bank followed proper procedure in Russian courts, including service at the defendant’s registered Moscow address.
• Allegations of fraud and conspiracy are unfounded and do not amount to triable issues.
• The defendant’s arguments regarding natural justice and fair trial rights are without merit.

Defendant's Arguments

• The Russian judgments were procured by fraud involving a conspiracy between the third party and the City of Moscow to force insolvency and transfer contracts.
• The defendant was not properly served or notified of proceedings and hearings in Russia, violating procedural and constitutional protections.
• The Russian courts failed to investigate service issues and proceeded in breach of natural justice, including holding hearings in the defendant’s absence without proper notification.
• The guarantees were signed under duress and are onerous transactions, but this defence was not properly considered by Russian courts.
• The defendant’s right to a fair trial under Article 6(1) ECHR was violated.
• The Bank misled the Russian court about the defendant’s whereabouts and knowledge of the conspiracy.
• There are procedural irregularities and judicial impropriety in the Russian judgments, raising triable issues.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Dicey, Morris and Collins on Conflict of Laws (15th ed., 2012)	Enforcement of foreign judgments; grounds for impeaching foreign judgments including fraud, public policy, and natural justice.	Provided the framework for assessing enforceability of Russian judgments and grounds for resisting enforcement.
Altimo Holdings v. Kyrgyz Mobil Tel Ltd [2011] UKPC 7	Public policy ground for refusing enforcement where foreign court is corrupt or judgment obtained by improper influence.	Cited to explain the narrow and cautious approach to public policy challenges.
Yukos Capital Sarl v. OJSC Rosneft Oil Co [2012] EWCA Civ 855	Public policy and natural justice in enforcement of foreign judgments.	Reinforced requirement for cogent evidence to impeach foreign judgments on public policy grounds.
Jacobson v. Frachon (1927) 138 L.T. 386	Natural justice requires opportunity to respond to case.	Supported principle that procedural fairness is necessary for enforcement.
Adams v. Cape Industries Plc [1990] Ch 433	Substantial denial of justice required to impeach foreign judgment on natural justice grounds.	Guided assessment of whether natural justice was breached in Russian proceedings.
Israel Discount Bank v. Hadjipateras [1984] 1 WLR 137	Defendant must take available defences in foreign court; cannot raise them anew in English enforcement proceedings.	Applied to bar re-litigation of issues already considered by Russian courts.
Valle v. Dumergue (1849) 4 Exch 290	Service in accordance with agreed mode binds party even if actual notice not received.	Supported deemed service at registered Moscow address under Russian law.
Maronier v. Larmer [2003] QB 620 (CA)	Presumption that contracting state courts comply with ECHR fair trial standards.	Supported presumption of fairness of Russian court procedures.
Merchant International Co Ltd v. Naftogaz Ukrainy [2012] EWCA Civ 196	Application of ECHR rights in enforcement of foreign judgments.	Reinforced presumption of compliance with fair trial standards in foreign courts.
Aeroflot-Russian Airlines v. Berezovsky [2014] EWCA Civ 20	Standard for assessing fair trial compliance in foreign judgments.	Used to evaluate alleged breaches of natural justice and fair trial rights.
Easyair Limited v. Opal Telecom Limited [2009] EWHC 339 (Ch)	Principles governing summary judgment applications.	Outlined criteria for no real prospect of success and no compelling reason for trial.
A C Ward & Son v. Caitlin (Five) Limited [2009] EWCA Civ 1098	Approval of summary judgment principles.	Confirmed approach to assessing prospects of success at summary judgment stage.
JSC VTB Bank v. Skurikhin [2014] EWHC 271 (Comm)	Assessment of realistic prospects of success and summary judgment criteria.	Applied detailed guidance on summary judgment in enforcement context.
Swain v Hillman [2001] 1 All ER 91	Definition of realistic vs fanciful prospect of success.	Used to assess defendant’s prospects of success.
Three Rivers District Council v. Bank of England [2001] UKHL 16	Clarification of fanciful claims and summary judgment principles.	Supported dismissal of claims without real substance.
ED & F Man Liquid Products v. Patel [2003] EWCA Civ 472	Assessment of factual assertions at summary judgment.	Guided evaluation of evidence and factual disputes.
Doncaster Pharmaceuticals Group Ltd v. Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661	Limits on resolving factual disputes at summary judgment.	Warned against mini-trials at summary judgment stage.
Royal Brompton Hospital NHS Trust v. Hammond (No. 5) [2001] EWCA Civ 550	Consideration of evidence reasonably expected at trial.	Applied in assessing evidence on summary judgment.
JD Wetherspoon v. Harris [2013] EWHC 1088	Challenges posed by fraud allegations at summary judgment.	Recognized complexity of fraud claims in summary disposal.
AK Investment CJSC v. Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804	Caution in deciding difficult legal questions on interlocutory applications.	Warned against premature determination of complex legal issues.
Miles v. Bull [1969] 1 QB 258	Compelling reasons for trial despite lack of triable defence.	Referenced in assessing whether case requires investigation.
Global Marine Drillships Ltd v. Landmark Solicitors LLP [2011] EWHC 2685 (Ch)	Compelling reasons for trial.	Supported approach to deciding when trial is necessary.
OJSC Oil Co v. Abramovich [2008] EWHC 2613 (Comm)	Inference of judicial impropriety from departures from normal practice.	Applied in assessing allegations of judicial misconduct in Russian courts.

Court's Reasoning and Analysis

The court began by confirming the well-established common law principles for enforcing foreign judgments, emphasizing that such judgments must be final, conclusive, and for a definite sum. The court noted the recognized grounds for impeaching foreign judgments, including fraud, public policy, and breach of natural justice, and considered the defendant’s claims under these heads.

The court undertook a detailed examination of the Russian procedural law on service and notice, including conflicting expert evidence. It found the expert supporting the Bank’s position correctly interpreted recent Russian law, particularly Article 165 of the Civil Code, which creates a presumption of deemed service when notices are sent to the defendant’s registered address. The court accepted that the Moscow address was the defendant’s registered and contractual address, that notices were sent there, and that the defendant bore the risk of non-receipt.

The court rejected the defendant’s argument that the Russian courts failed to properly investigate service issues or that the judgments were obtained in breach of natural justice. It found that the defendant had opportunities to defend himself, including through legal representatives, and that the Russian appellate and cassation courts properly considered the service and procedural issues. The court also found no triable issues as to the adequacy of time to prepare the defence, noting the defendant’s legal representatives had wide authority and that the defendant failed to provide instructions.

Regarding allegations of fraud and conspiracy, the court found these to be unsubstantiated and commercially implausible. It held that the evidence did not approach the cogency required to justify a trial on these grounds. The court also found no credible evidence of judicial impropriety or corruption affecting the Russian judgments.

The court further held that no independent public policy grounds existed to refuse enforcement, and that the defendant’s arguments overlapping with natural justice and fraud grounds failed to raise triable issues. The court concluded there were no other compelling reasons for a trial, and that the Bank had established the defendant had no real prospect of successfully defending the claims.

Holding and Implications

The court GRANTED the Bank summary judgment to enforce the three Russian judgments against the defendant.

This decision results in enforcement of the Russian court judgments in England, enabling the Bank to pursue recovery of the sums owed under the guarantees. No new legal precedent was established, as the ruling applied established principles regarding enforcement of foreign judgments, procedural fairness, and summary judgment criteria. The defendant’s allegations of fraud, breach of natural justice, and public policy were found insufficient to prevent enforcement or warrant a trial.