Berezovsky granted summary judgment: enforcement of Russian ‘indexation’ judgment contrary to English public policy

30/10/12

On 30 October 2012 the High Court (Mr Justice Floyd) granted summary judgment in favour of the defendants in  JSC Aeroflot Russian Airlines v (1) Boris Berezovsky and (2) Nikolay Glushkov, holding that Aeroflot was not entitled to enforce in England a judgment obtained in Russia in 2011 in the Golovinsky District Court.

An earlier judgment against Mr Berezovsky had been given in 2007 by the Savelovsky District Court (in the absence of Mr Berezovsky), pursuant to which Mr Berezovsky was found guilty of an alleged fraud causing harm to Aeroflot in the mid to late 1990s. As well as imposing a criminal penalty, the 2007 judgment fixed the civil liability of Mr Berezovsky at approximately 215m roubles. This judgment was satisfied (many times over) out of monies recovered by Aeroflot in Switzerland. By the 2011 judgment, Aeroflot asked the Golovinsky Court to 'index' the earlier judgment for inflation. The Court obliged and increased Mr Berezovsky's liability (again in his absence) to Aeroflot by 2.1 billion roubles (that is, by a factor of 10).

In these proceedings Aeroflot sought to enforce the 2011 judgment and to claim the balance between the 2.1 billon roubles and the amount it had already recovered: a balance of £10.8 million.

Mr Berezovsky sought and was granted summary judgment. The Court first held that the pleaded case that the Golovinsky Court was one of competent jurisdiction had not been made out. There had been no submission to the jurisdiction of the Savelovsky Court or the Golovinsky Court and it was not in dispute that Mr Berezovsky was outside of Russia at the time of the later suit. The Court rejected a submission that, having asserted one basis for jurisdiction in the pleadings, Aeroflot could (without amendment) seek to rely on a different basis to save the pleaded case at the hearing of Mr Berezovsky's application.

Second, Mr Berezovsky successfully argued that to enforce the 2011 judgment would be contrary to the fundamental English public policy of finality in litigation such that  a party should not be twice vexed in the same matter. The effect of the 2011 judgment was to re-open the issue of compensation, for the same cause of action, after a final earlier judgment had been entered (and satisfied).

The judgment is here.