On 8 September 2023, Richard Smith J handed down judgment on Bourlakova v Bourlakov & others [2023] EWHC 2233 (Ch), permitting the joinder of an additional claimant and various amendments opposed by certain of the Defendants. The case is notable for, among other things, its clarification of the effect of article 67.1(a) of the EU-UK Withdrawal Agreement, which concerns the scope of the Brussels I Regulation (Recast) (the “BRR”) following the end of the Brexit transition period.
In the Claim, the Claimants allege that, following a breakdown in marital relations between Mr Bourlakov and Mrs Bourlakova, Mr Bourlakov and certain of his relatives and associates entered into a fraudulent conspiracy to defraud Mrs Bourlakova and her daughters of their rightful share of the family’s assets. Among other things, the Claimants allege that Mr Bourlakov misappropriated, or attempted to misappropriate, certain Panamanian companies and their assets. Those companies included Edelweiss Investments Inc (“Edelweiss”).
The Judge considered a number of amendments proposed by Mrs Bourlakova and one of her daughters, Veronica. In particular, Mrs Bourlakova and Veronica sought the joinder of Veronica as a claimant on the basis that she was the owner of Edelweiss, and to introduce new claims for declarations as to her ownership of Edelweiss and for damages for its attempted misappropriation. The amendments were opposed on limitation and jurisdictional grounds by certain of the Defendants, including Mr Bourlakov’s sister and her husband (the “Kazakovs”), and another of Mr Bourlakov’s relatives, Semen Anufriev, who had played a central role in managing Mr Bourlakov’s business interests and personal wealth and, on the Claimants’ case, been a party to the conspiracy. The Judge rejected all these objections.
As to the limitation issues, the Judge held that the Kazakovs had not identified any limitation defence with a reasonable prospect of success. In particular, the Judge noted the Kazakovs’ failure to provide any primary evidence that certain board meetings and other corporate actions said to give rise to a limitation defence under Panamanian law had actually taken place.
As to the jurisdiction issues, the Judge agreed with the Claimants that, because the proceedings were commenced before the end of the Brexit transition period, the effect of article 67(1)(a) of the EU-UK Withdrawal Agreement (as implemented in domestic legislation) was that the BRR applied to new claims, including claims by a proposed new claimant, introduced after the end of the Brexit transition period.
Accordingly, jurisdiction against the Kazakovs and Mr Anufriev, each of whom is domiciled within the EU, fell to be determined under the BRR. The Judge rejected those Defendants’ only objection to jurisdiction under the BRR: namely, that the claims advanced against the Third Defendant were artificial and abusive, such that the Third Defendant, which was domiciled in England, could not serve as an anchor defendant.
As to the position of Edelweiss and other Defendants domiciled in Panama, it was common ground that jurisdiction as against them fell to be determined under the common law. The Panamanian Defendants argued that permission to amend should be refused. In particular, they argued that Panama or Florida, not England, was the appropriate forum for the new claims. In rejecting that argument, the Judge held that the appropriate forum was to be identified by reference to the entirety of the dispute, and not only the new claims. He further held that England was clearly the appropriate forum because, among other reasons, the new claims were closely related to the existing claims that are to be determined in England following the rejection, in May 2022, of various jurisdiction challenges made by the Kazakovs and certain other Defendants.
The judgment is available here
Matthew Cook KC, Patrick Harty and Daniel Fletcher (among others) act for the Claimants, instructed by Mishcon de Reya LLP.