Lax & Co successfully overturn US$150m judgment in Court of Appeal

August 2014

Novoship UK Limited (& 14 Others) v Vladimir Mikhaylyuk (& 7 Others) [2012] EWHC 3586

Mike Lax and Robert Pollock-Hill acted for a Russian businessman, Mr Nikitin (the 6th Defendant) and two companies controlled by him (the 7th and 8th Defendants) in a dispute heard in the Commercial Court between the London agent of the Russian shipping company, JSC Novoship (now part of Sovcomflot) and various one ship companies.

The claims related to allegations that Mr Nikitin had dishonestly assisted the former General Manager of Novoship UK Limited ("M") in various breaches of fiduciary duty against his employer; namely the solicitation and receipt of bribes from third parties. The Claimants alleged that M had arranged for money to be paid to one of Mr Nikitin's companies by a third party, and that Mr Nikitin must have known that the money was derived from M's breach of fiduciary duty. Consequently, the Claimants claimed they were entitled to an order that Mr Nikitin's companies disgorge the profits that they had earned from chartering vessels managed by Novoship UK which they had chartered at commercial rates and were unrelated to the alleged breaches of fiduciary duty.

The trial was heard before Mr Justice Christopher Clarke in the Commercial Court and lasted 17 days. Judgment was handed down on 14 December 2012. The Court ordered Mr Nikitin and his companies to pay approximately US$153 million in respect of profits earned on the charters plus interest. Our clients appealed the judgment and on appeal, heard in June 2014, the Court of Appeal in Novoship (UK) Limited & Others v Nikitin & Others [2014] EWCA 908 overturned the decision of the trial judge and reduced the amount payable to approximately US$660,000 inclusive of interest. The Court of Appeal also refused the Claimants leave to appeal to the Supreme Court.

Issued by

Robert Pollock-Hill
Partner
Lax & Co LLP
Dir: +44 (0) 20 7397 0543
robert.pollock-hill@laxlaw.co.uk

December 21st, 2015

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