Commercial Disputes Weekly – Issue 2191 October 2024

Joint Venture – Trusts
In a dispute arising from various commercial projects in which both the claimant and defendant were involved, the Commercial Court has rejected the claimant’s assertion that he was entitled to 24.75% of the defendant’s shares in PJSC PhosAgro. The claimant was unable to prove that the defendant held the shares in trust for the claimant. The evidence centred on various discussions said to have taken place at locations across London, including the Ritz Hotel, the Wolseley restaurant, a sauna and a pub. The burden of proving these claims was on the claimant and he had been unsuccessful in discharging that burden. The claim was dismissed
Gorbachev v Guriev [2024] EWHC 2174 (Comm), 26 September 2024

Directors – Fiduciary Duty
The defendant was sole director and shareholder of two companies that went into liquidation. The claimant brought claims for breach of fiduciary duty against the defendant (as assignee from the companies’ liquidators). The claimant successfully obtained summary judgment against the defendant. The defendant had made several payments totalling approx. £1.7m to himself and another company that had no valid explanation or purpose for the running of the businesses. He used some of the money to buy a property with his wife. He had also failed to keep proper accounting records explaining the payments and could not rely in his defence on the absence of records that he should have kept.
Omnimax International LLC v Cullen [2024] EWHC 2367 (Ch), 17 September 2024

Security for Costs
A claimant company has been ordered to make payment into court as security for the costs of its claim against the director of a company in liquidation for breach of duty. The court rejected the claimant’s submissions that it would be able to pay costs if ordered to do so as a result of a revolving credit facility and an after the event insurance policy that it had in place. There were several features of the policy that would undermine its strength as security, including provisions allowing the insurer to withdraw cover if it considered the claim had no reasonable prospect of success. Further, there was limited information about the credit facility and whether it could be used to pay adverse costs order.
Asertis Ltd v Bloch [2024] EWHC 2393 (Ch), 24 September 2024

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: