London High Court throws out PrivatBank claim against Kolomoisky

The High Court in London has thrown out PrivatBank’s case against Ihor Kolomoisky and Gennadiy Bogolyubov and ordered the Ukrainian bank to pay its two former main shareholders full costs.

The court found that the Worldwide Freezing Injunction (“WFO”) should never have been granted and that PrivatBank artificially constructed the case so they could attempt to join Kolomoisky and Bogolyubov to the proceedings. [paragraph 100] Mr Justice Fancourt found that PrivatBank’s actions were impermissible and an abuse of Kolomoisky and Bogolyubov's rights under Article 6 of the Lugano Convention to be sued in their own domicile, that's according to a press release by Fieldfisher, the law firm representing Mr Kolomoisky's interests in the case.

Furthermore, Mr Justice Fancourt identified "serious non-disclosure and misrepresentation" by PrivatBank in its claim [paragraph 176]; accordingly, he set aside the WFO.

PrivatBank had originally claimed approximately US$1.91billion.  Mr Justice Fancourt found that the maximum possible value of PrivatBank's "arguable" claim against the Defendants should be reduced by approximately $1.4billion to $515 million, representing a reduction of about 75% in the claim originally put forward by PrivatBank.  The Judge made no finding that any sum was actually due to PrivatBank at all.

The Judge also made it absolutely clear that he has not made any findings at all about whether or not there has been any fraud. The Judge stated in a further Judgment delivered on Nov 23, 2018, that: "Mr Smith relied on findings in my judgment of underlying fraud of an epic scale. In my judgment, these are not findings, but observations. Whether or not a fraud was involved will be a matter for trial somewhere, someday."

In his further Judgment, Mr Justice Fancourt found this was an appropriate case in which to recognise the overwhelming success of the Defendants, and so PrivatBank should pay to them all of the costs they incurred in their applications. The court awarded the Defendants interim payments on account of their costs totalling GBP7.5 million, with GBP4 million of that payable to Mr Kolomoisky within 28 days.

Andrew Lafferty, a Partner at Fieldfisher and spokesperson for Mr Kolomoisky, said:

"We are delighted that the Judge has found that the WFO should be set aside as a result of serious and deliberate non-disclosures and misrepresentations to the Court by PrivatBank, during the hearing at which the WFO was granted and at which the Defendants were not represented. Mr Kolomoisky has always maintained that the Bank's claims are politically motivated, misconceived and will fail.”