UK: Fried Frank Secures Landmark Supreme Court Ruling In England

Today, the Supreme Court of England and Wales, in the case of VTB Capital Plc v Nutritek International Corp rejected an appeal by VTB Capital Plc against the Orders of the Court of Appeal and the High Court dismissing their claim for US$330 million against Fried Frank client Marshall Capital and Mr. Konstantin Malofeev for want of jurisdiction on grounds of forum non conveniens. VTB's Worldwide Freezing Order against Mr. Malofeev was also dismissed. The Supreme Court also clarified the circumstances in which an English Court will pierce the corporate veil, following the attempt by VTB to pierce the corporate veil of the Borrower entity under their Facility Agreement to make Mr. Malofeev liable.

The case highlights the factors taken into account by the English Court when accepting jurisdiction to hear disputes. The English Court is a popular, neutral venue to hear complex international commercial disputes. However, the parties must either agree to the English Court resolving their disputes, or there must be other compelling reasons justifying the Court accepting jurisdiction that links the dispute to the jurisdiction. The English Court held that neither applied, and dismissed the claims. This is a landmark decision in English law, and clarifies the basis upon which the English Court will exercise its discretion on accepting jurisdiction.

Fried Frank litigation partner Justin Michaelson commented: "My clients are delighted with the decision.  VTB sought, quite wrongly, to use the English court's nuclear weapon of a freezing injunction as a tool of commercial pressure against Marshall Capital and Mr.Malofeev for 18 months, with no merits underlying their claim.  We have succeeded at every judicial level in challenging the original Order obtained ex parte, but it is only now that Marshall Capital and Mr. Malofeev are finally vindicated and are able to try and carry on again as normal."

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