Commercial Court grants post-judgment freezing order in oligarch case

21/09/20

Following Picken J’s judgment of 14 July 2018 (judgment here), Mr Sergiy Taruta and his vehicle Dargamo Holdings Limited were ordered to pay the costs of their substantial and failed counterclaims (which the Judge found were likely to form more than 50% of the costs of the trial) on the indemnity basis. At a further contested hearing on 28 July, Picken J made an order for payments on account totalling £11m, including £3m to the Claimant, Avonwick Holdings Limited, and Vitaly and Olena Gaiduk (the “Gaiduk Parties”).

The Taruta Parties paid less than £2m of the £11m due by the deadline, including only £833,000 to the Gaiduk Parties. The Gaiduk Parties (and others)therefore applied for a worldwide freezing order over the Taruta Parties’ assets, to cover both the outstanding costs to be paid on account, and a substantial sum to cover further assessed costs.

Picken J ordered that the application (made on notice) be heard urgently on 11 September 2020. After a full day of submissions, he agreed to grant the Gaiduk Parties (and others)  a freezing order for over  US$20m of the Taruta Parties’ assets. In concluding that there was a risk of dissipation if the order were not made, Picken J noted that:

1. Mr Taruta had made an offer to pay £9m withing 35 days in order to compromise the 28 July hearing, but had not even met his own deadline (which was in any event longer than the Court had in fact ordered).
2. Mr Taruta had been found at trial to have fabricated evidence in a number of respects, and had been willing to engage an organisation with rumoured criminal links (known as “Za Spravedlivost”, or “For Justice”, a Russian “debt collection agency”).
3. Although Mr Taruta had referred to allegedly substantial assets of which the other parties were already aware, and offered an undertaking in respect of them, those assets were of dubious value, and it was not for the Taruta Parties to decide which assets should be enforced against.
4. Although Mr Taruta had produced a copy of a loan agreement with Dargamo’s parent, Enard Investments Limited, to borrow money from a company called “SIT” to discharge the costs orders, there was no evidence of that company’s ability to fund such a loan.

The Court’s judgment reinforces the Commercial Court’s policy, after trial, of utilising its discretionary powers to ensure that its  judgments are given teeth and enforced. Picken J stressed that policy in determining both that a WFO should be granted, and that it should include a full order for asset disclosure by the Taruta Parties.