The Commercial Court grants summary judgment to bank seeking to enforce foreign judgments against a Russian National in England.

OJSC Bank of Moscow ("the Bank") applied for summary judgment in a claim to enforce three Russian judgments against Mr Chernyakov, a Russian national resident in England (the "Russian Judgments"). The co-defendants were Ms Evokhova, Mr Chernyakov's wife, and Norwind Shipping Limited, a BVI company owned and controlled by Mr Chernyakov. Mr Chernyakov resisted enforcement of the Russian Judgments on grounds of public policy and human rights.

The Commercial Court unambiguously dismissed Mr Chernyakov's arguments as having been "contrived to camouflage the true position" and found for the Bank. The court's reasoning follows that in the 2014 decision of JSC VTB Bank v Skurikhin and Others, and confirms that the English courts will not indulge parties advancing contrived arguments with an aim to avoid, or delay, the proper enforcement of foreign judgments.

Proceedings in Russia and Enforcement in the UK

Mr Chernyakov was the President of OOO Nauchno-Proizvodstvennoe Obedinenie Kosmos ("Kosmos"). The Bank had provided finance to Kosmos under various loan facilities and letters of credit. As part of such finance arrangements, Mr Chernyakov had signed personal guarantees in 2013. Kosmos was declared insolvent in March 2015, and the Bank subsequently sought to enforce the personal guarantees against Mr Chernyakov. Three judgments were entered for the Bank in Russia.

In the UK proceedings for enforcement, the Bank argued that these were straightforward claims to enforce three binding and conclusive judgments and that Mr Chernyakov had no arguable defence to the application for summary judgment

In his defence, Mr Chernyakov argued that there were triable issues that the Russian Judgments had been procured by the fraud of the Bank, given in violation of principles of natural justice and in breach of the right to a free trial in Article 6(1) of the European Convention on Human Rights ("ECHR") and further that their enforcement would be contrary to public policy. Additionally Mr Chernyakov argued that there were compelling reasons as to why his claims should not be dismissed.

Mr Chernyakov's arguments and Judgment

(1) Mr Chernyakov's first argument – the Russian Judgments had been given in violation of principles of natural justice

  • Mr Chernyakov argued that he had not been validly served with, or notified of, the claim forming the basis of the First Judgment. Further, it was argued that Mr Chernyakov's lawyers had only been made aware of the hearings relating to the Second Judgment a short time in advance of such hearings. Mr Justice Cranston rejected these arguments, and noted that the Russian courts had sent multiple notices to the address provided by Mr Chernyakov, and that Mr Chernyakov had an obligation to notify the court of any changes in this address. The Russian court was entitled to regard the service, and notification, of the hearings as valid. Any short notice was therefore the fault of Mr Chernyakov.

  • Mr Chernyakov also argued that the conduct of the court at the appeal of the First Judgment had been such that it violated the principles of natural justice. He argued that the court had repeatedly cut off his counsel and had delivered its judgment only moments after the end of the hearing, suggesting that the court had made its mind up in advance. Mr Justice Cranston admitted that the tone of the Russian court had been "crisp" but that Mr Chernyakov had not provided any credible evidence in support of his assertions. No triable issues were found.

(2) Mr Chernyakov's second argument – the Russian Judgments had been procured by the fraud of the Bank

  • Mr Chernyakov argued that the Bank knew he had been forced to give the guarantees under duress, and that therefore, by pursuing the three judgments the Bank implied falsely to Russian court that there was no defence to the claims. Mr Justice Cranston stated that the evidence put forward in support of these claims was nowhere near sufficiently cogent to justify a trail of these issues, and that in any event, the issues as portrayed made little commercial sense. No triable issues were found.

(3) Mr Chernyakov's third argument – the Russian Judgments had been given in breach of Article 6 of the ECHR

  • Mr Chernyakov argued that the Russian Judgments had been given in beach of his right to a fair trial under Article 6 of the ECHR. Mr Justice Cranston stated that this argument incorporated no evidence that had not already been advanced. No triable issues were found.

(4) Mr Chernyakov's fourth argument – Enforcement of the Russian Judgments would be contrary to principles of public policy

  • Mr Justice Cranston stated clearly that judicial impropriety would only be inferred by an English court where there had been departures from normal judicial practice or irrational conclusions. Mr Justice Cranston found no evidence of such departures or irrationality; the Russian Judgments were straightforward and rational. Therefore, there could be no public policy reason – or any other compelling reason – for refusing their recognition or enforcement.

Commentary

The facts of the case were not unusual; they depict a dispute that regularly occurs between a bank and its customers. In the present case it was clear that the Bank had a genuine and fair claim, and enforcement was granted. Mr Justice Cranston's reasoning in this judgment should give comfort to foreign parties looking to enforce judgments in the UK.

It is interesting to note that Mr Justice Cranston made reference to Mr Chernyakov's conduct, and the inconsistencies in his arguments, several times. He concluded that Mr Chernyakov had contrived arguments in order to camouflage the true position, and made it clear that an English court will not have sympathy for those who conduct litigation without integrity.

There have long been attempts to undermine the validity of Judgments obtained in foreign jurisdictions, particularly those jurisdictions where political and cultural differences are striking. However, that does not mean that judicial decisions coming out of those jurisdictions will be viewed as inherently flawed and subject to challenge. The English Court will rightly be slow to find such judgments unsafe and subject to challenge and the onus remains on the applicant to produce strong evidence in support of their claims.