On October 1, 2013 the Presidium of the Supreme Arbitration Court of the Russian Federation satisfied the supervisory appeals by three offshore companies, the ultimate buyers of Khakass Bentonite OJSC shares, and dismissed the plaintiffs’ claims to recover about 70% of Khakass Bentonite OJSC shares.
In 2011, Pererabotka LLC and Dobycha LLC filed a claim against Valleyfiled Ventures Limited, Rolfing Limited and Wyfield Investments Limited (the offshore companies whose interests were represented by EPAM) to reclaim Khakass Bentonite OJSC shares from unlawful possession. The shares under dispute were withdrawn from the plaintiffs’ possession in 2006 as a result of execution of the primary disposition of shares in favour of three individuals. A further chain of sales and purchases had been performed with regard to the above shares, resulting in the offshore companies holding the shares under dispute. The primary shares disposition performed in 2006 being declared as invalid served as a basis for the claim filed. The plaintiffs filed this claim believing all the further share sale and purchase agreements to be invalid.
In the first-instance the court dismissed the claims filed in view of the voluntary withdrawal of the shares from the plaintiffs’ possession as well as of the good faith that the respondents were not and could not be aware of the existing dispute regarding the shares. The courts of appellate and cassation cancelled the first court decision and vindicated the shares in the amount specified from the offshore companies that were declared mala fide purchasers.
While doing so the courts in of all these three cases have not taken into account that an identical claim had already been filed and considered by the courts on merit and dismissed due to lack of grounds required to satisfy the vindicatory claim in 2009. When filing this second claim the former shareholders tried to argue that the subject and the grounds of the claim have changed through increase in the number of shares claimed and a more specified body of evidence, which was emphasised by EPA&P attorneys when defending the Client’s interests.
Moreover, every court had also refused to apply the statute of limitation referring to its being discontinued by the filing of the initial claim. This conclusion contravenes the judicial practice and the very essence of the right of defence since the statutory restrictive nature of the statute of limitations and the principle of legal certainty are lost.
The respondent’s standpoint with regard to the need to terminate the proceedings in the identical case and to the lack of grounds to discontinue the statute of limitations was supported by the Presidium of the Supreme Arbitration Court of the Russian Federation the ruling being to terminate the proceedings in the case with regard to the shares vindication being claimed by the plaintiffs in 2009 and to dismiss the rest of the claim due to the expired statute of limitations on the right protection.
The Client’s interests were represented by EPA&P partners Valery Eremenko and Taras Rabko, as well as by Senior Associate Vera Rikhterman and Associate Julia Bobrova.