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Cases & Deals

September 16, 2019

King & Spalding Secures Strike Out of Multi-Million Fraud Claims in English High Court


King & Spalding successfully represented UK-incorporated companies Antracite Investment Ltd and Urgula Platinum Ltd, and Cypriot company, Menrela Ltd, which are part of a wider corporate structure of Promsvyaz Group owned by the prominent Russian businessman Dmitry Ananyev, in persuading the English High Court to strike out claims for fraud. The claims ran into tens and potentially hundreds of millions of dollars.

The case began in the summer of 2018 when two groups of Russian nationals sought freezing orders and filed claims against Dmitry Ananyev, his brother Alexey Ananyev and several corporate defendants. The claimants, who were customers of Promsvyazbank (PSB), alleged that the Ananyev brothers, Antracite and Urgula and several other companies induced them to invest in a series of notes issued in 2017 by way of misrepresentation and conspiracy. PSB was nationalised by the Russian Government in December 2017 through a state bailout carried out by the Russian Central Bank.

The claimants sued Antracite and Urgula as anchor defendants to bring the EU and non-EU co-defendants into the proceedings in the English High Court. In its Judgment of 16 September, 2019, the English Court ruled that there was no basis for the argument that Antracite and Urgula may be liable to the claimants and accordingly struck out the claims as they were without foundation. In doing so, the claimants were prevented from using Antracite and Urgula as anchor defendants in these proceedings.

This is an important decision as it confirms the principle that a claimant whose sole purpose of suing the anchor defendant is to remove other co-defendants from the courts of their domicile cannot rely on Article 8(1) of the Brussels Regulation (Recast).