On 28 March 2023, the Court of Appeal handed down judgment in Gorbachev v Guriev [2023] EWCA Civ 327.
The Gorbachev litigation is a long-running dispute between two Russian businessmen for control of a $6 billion chemicals empire. It essentially turns on whether Mr Guriev made oral declarations in 2005 granting Mr Gorbachev an interest in the business.
As part of those proceedings, Mr Gorbachev sought non-party disclosure under CPR r 31.17 from professional trustee companies which he asserted might have documents supporting his claim. The trustees are incorporated in Cyprus. They resisted non-party disclosure on the basis of jurisdiction and on the merits of the application. Their jurisdiction challenge was unsuccessful, but they succeeded in resisting the application on the merits (although Mr Gorbachev was given permission to re-formulate his application).
Under CPR r 46.2, a non-party is generally entitled to its costs of a CPR r 31.17 application, even if the non-party is unsuccessful. However, the first instance judge held that the trustees were not entitled to their costs of their jurisdiction challenge, because that challenge was distinct from the r 31.17 application and had been commenced by the trustees’ separate application. This raised the novel issue of what general principle should govern the costs of an unsuccessful jurisdiction challenge by a respondent to a non-party disclosure application.
The Court of Appeal unanimously allowed the trustees’ appeal and awarded the trustees their costs. Popplewell and Males LJJ held that the trustees’ costs were within the letter and spirit of CPR r 46.2, even though they were incurred on a separate application. Dingemans LJ applied the same principle by analogy.
Richard Mott and Harry Stratton acted for the trustees in the successful costs appeal. You can view the Judgment here.
Sam O’Leary and Harry Stratton acted for the trustees in successfully resisting the application on the merits.
View Judgment