Defendant in Mazepin ‘raider attack’ case can challenge jurisdicition, says judge

One of the defendants in an alleged €2 billion conspiracy-to-defraud action involving a sanctioned Russian oligarch, who allegedly controls a Dublin-registered company, can challenge the jurisdiction of the Irish courts to hear the case, a judge ruled.

Mr Justice Denis McDonald, who heads the Commercial Court, ruled JSC Khimaktninvest (Kai), which says it is a separate and independent legal person to the other defendants, can make its case about whether Ireland is the proper jurisdiction for the case.

Kai was joined earlier this year in the case which was brought in 2016 by four Caribbean-registered firms alleging conspiracy to defraud them of their shares in Russian ammonia-producing company Togliattiazot (ToAZ).

The claim relates to what are known as “raider attacks” in which a so-called corporate raider acquires a minority shareholding in a target company before taking allegedly illegal steps to ultimately wrest control of it.

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The four plaintiff companies — Trafalgar Developments, Instantania Holdings, Kamara and Bairiki Inc — have sued EU-sanctioned Russian billionaire, Dmitry Mazepin, another Russian ammonia producer called United Chemical Company Uralchem (UCCU), which Mr Mazepin controls, as well as UCCU itself and a number of other companies and individuals.

Among those other companies is Eurotoaz, a Dublin-registered firm, also allegedly controlled by Mr Mazepin. Eurotoaz was allegedly engaged in a campaign of vexatious and false litigation in Russia to deprive the plaintiff companies of their shareholding in ToAZ.

It is claimed they were all part of a conspiracy to defraud the plaintiffs through illegal and corrupt actions. The claims are denied.

The High Court previously rejected a challenge by the Mazepin/UCCU defendants to the jurisdiction of the Irish courts to deal with the case. An appeal is pending on that decision.

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Earlier this year, the court joined the JSC Khimaktninvest (Kai) company as a defendant.

In arguments made earlier this week, Declan McGrath SC, on behalf of Kai, asked the court to strike out the case against Kai on grounds including that the plaintiffs were engaged in “forum shopping” and trying to relitigate underlying matters in this case that the plaintiffs had already unsuccessfully litigated in Russia.

Counsel said the plaintiffs were essentially “trying to ride both horses” in the two jurisdictions. They had added that the Dublin-registered Eurotoaz as a defendant by claiming Eurotoaz was central to the conspiracy when in fact it was at this stage “a minor footnote” in all this, he said.

Mr McGrath said this was new evidence that had not been presented to the previous hearing which led to the High Court rejecting a challenge by the UCCU defendants to the Irish jurisdiction to hear the case.

Eoin McCullough SC, for the plaintiffs, said it was his side’s contention that there was no merit to allowing Kai to run the jurisdictional action in circumstances where the High Court has already given judgment on this issue. There was “nothing new here and nothing which conceivably makes any difference to the outcome”, he said.

Kai says it has new evidence but it must be evidence that has some reasonable prospect of changing the result of the jurisdictional issue, he said.

None of the proceedings in Russia determined the claim before the Irish court and it does not involve the relitigation of any of the issues heard in Russia, he said.

In a ruling on Friday, Mr Justice McDonald said he would allow the jurisdictional challenge to proceed next month on the basis of certain points raised by the Kai defendant, but not all of them.