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Category: Fraud updates

PCB named Asset Recovery Firm of the Year

PCB Litigation has been named by Who’s Who Legal as Asset Recovery Firm of the Year for 2019. Celebrating its 40th anniversary this year, PCB would like to thank its staff, clients and colleagues worldwide for their continuing support which has enabled it to gain this global recognition.

Those 40 years have seen major developments in the tools available to practitioners in seeking to trace and recover stolen assets. PCB has been fortunate to be involved in some of the cutting edge cases, expanding the availability of freezing, disclosure and search orders in England and other jurisdictions, as well as being founding members of ICC FraudNet and the Commercial Fraud Lawyers Association.

The years ahead will bring further challenges with the increasing sophistication of structures used by fraudsters to conceal their assets. We are confident that asset recovery lawyers can make a real difference, recovering stolen assets and the proceeds of corruption.

PCB obtains Freezing and Search Orders in “one of Russia’s biggest ever alleged bank frauds”

PCB’s litigation team has assisted Vneshprombank in obtaining extensive Worldwide Freezing, Search, Disclosure and Passport Surrender Orders against Georgy Bedzhamov. The Orders were granted by the English High Court, freezing Mr Bedzhamov’s worldwide assets up to £1.34 billion.

Vneshprombank collapsed and its liquidator, the Deposit Insurance Agency subsequently discovered what it believed to be an extensive fraud, which included suspect loans to shell companies alleged to be connected to Mr Bedzhamov. Mr Bedzhamov is facing separate criminal proceedings in Russia relating to the collapse of the bank.

The Freezing and Search Orders enabled premises alleged to have been used by Mr Bedzhamov to be searched. He has been ordered not to leave England and Wales, and been made subject to personal spending caps. Assets frozen by the English Court include a range of international assets such as apartments, other properties and holding companies which are all alleged to belong to Mr Bedzhamov.

Steven Philippsohn, who is leading the PCB team, said: “We welcome this decision, which we anticipate will be an important milestone in the efforts to seek redress for the alleged massive fraud that Mr Bedzhamov is (along with others) accused  to have perpetrated”.

For further enquiries, please email Steven Philippsohn at snp@pcblitigation.com

 

Triple Success for PCB Litigation

PCB Litigation is delighted to share last week’s triple success. We have continued to be highly ranked in Legal 500 and Chambers & Partners – including in Tier 1 for civil fraud work where we are described as “an absolute go-to for complex, high value multi-jurisdictional commercial fraud claims”, and we have also been listed as a ‘Best Law Firm’ by The Times.

Amongst the accolades for our partners, who are all recommended, “lateral thinker extraordinaire” Steven Philippsohn, “very able, accomplished and experienced fraud litigator” Anthony Riem and “go-to for complex fraud matters” Trevor Mascarenhas are all recognised as leading individuals for civil fraud. Meanwhile, Nick Ractliff is  described as “dedicated and thorough” and Jon Felce, who is singled out as a next generation lawyer for banking litigation, is a “calm and collected presence”.

We are very grateful for your continued support for the firm and kind comments, and look forward to sharing our continued success with you in the future.

English Court extends ambit of claims for transactions defrauding creditors

The recent decision of the English Court of Appeal in Orexim Trading Limited v Mahavir Port and Terminal Private Limited has confirmed the existence of another tool in the fight against fraudsters, enabling victims of fraud and insolvency practitioners alike to pursue overseas targets who have been involved in transactions entered into at an undervalue and for the purposes of putting a company’s assets beyond the reach of its creditors.

The claim was based upon a series of transactions pursuant to which an Indian company, MPT, had sold a vessel to a Singaporean entity, which then on sold the vessel to another Indian entity. These were all alleged to be transactions at an undervalue entered into for the purposes of putting the vessel beyond the reach of MPT’s creditors. In those circumstances, section 423 of the Insolvency Act 1986 allows the Court to grant relief for the benefit of victims. The issue facing the Court in the Orexim case was whether the foreign defendants could be served with proceedings under section 423, as prior decisions had suggested that this could not be done.

The Court confirmed that it did have the power to permit service on foreign parties of a section 423 claim. Its judgment made clear that the ability to proceed against foreign parties is subject to important safeguards, namely that there needs to be a sufficient connection with England and that England is the appropriate forum for the claim. The court must be scrupulous to ensure that these safeguards are rigorously applied, and in the Orexim case, the Court did not consider that they had been met.

PCB Litigation obtains maximum prison sentence against contemnor defendant

On 19 October 2017, and following a string of prior successes for the Bank of Moscow (see here and here), PCB Litigation has obtained a rare maximum two-year prison sentence against Russian judgment debtor Andrey Chernyakov. The sentence was handed down for several contempts of Court by Mr Chernyakov arising out of breaches of worldwide freezing and related asset disclosure orders against him. Mr Chernyakov’s wife, Anastasia Erokhova, was also sentenced to a significant period of imprisonment for similar breaches.

The decision also confirms that the standard Commercial Court injunction wording covers not only assets beneficially owned by the subject of a freezing order, but also assets directly or indirectly controlled by that person, and therefore that it can extend to the assets of a company of which the respondent is the sole shareholder.

Jon Felce, the PCB Litigation Partner with primary conduct of the committal proceedings, stated: “The decision in this case serves to re-emphasise that the English Courts treat compliance with worldwide freezing and asset disclosure orders extremely seriously, and that the flagrant flouting of such orders will not be tolerated.”

PCB Litigation acts for the Bank of Moscow. The team consists of Anthony Riem, Nick Ractliff and Jon Felce of PCB Litigation, together with Counsel Tim Penny QC and Tim Akkouh.

Double success for PCB Litigation

PCB Litigation is delighted to share with you a double success achieved last week. Not only has PCB Litigation continued to be highly ranked in Legal 500 – including in Tier 1 for civil fraud work – with all five partners being recommended, but we have been shortlisted for Specialist Law Firm of the Year in the prestigious British Legal Awards.

The partners are extremely appreciative of your continued support for the firm.

Our dual recognition is a reflection of the continued strength and growth of PCB Litigation.

In The Legal 500, we maintained our top tier ranking for civil fraud – being described as “a niche firm which has built up an outstanding reputation in the civil fraud field”, “punching well above its weight” and providing “pragmatic, current and appropriate advice on all fronts” – with Steven Philippsohn and Anthony Riem again recognised as leading individuals. PCB Litigation also continues to be ranked highly for both commercial and banking litigation, having “expanded its disputes scope beyond the civil fraud arena to include complex commercial litigation work”, with an array of accolades going to our partners. “Highly rated” Steven Philippsohn is a “name to note”, whilst Anthony Riem “gives sensible and measured advice” and is “a shrewd tactician and a great fighter”. “Wise and sharp” and “encyclopedic” Trevor Mascarenhas has “strong business acumen and gives appropriate advice”, Nick Ractliff “is well regarded for shareholder and joint venture disputes, unfair prejudice matters, and breach of fiduciary duty claims” and Jon Felce is also recommended as a key contact.

Meanwhile, we are also very proud to have been recognised by The British Legal Awards, the glittering awards ceremony being said to represent the cream of the UK’s legal community.

We look forward to sharing our continued success with you in the future.

Steven, Tony, Trevor, Nick and Jon

PCB Litigation recognised as a “standout firm in the London market” by Who’s Who Asset Recovery 2017

Who’s Who Asset Recovery 2017 has described PCB Litigation as a “specialist fraud boutique” and a “standout firm in the London market”. Steven Philippsohn, Anthony Riem and Trevor Mascarenhas are all named in the list of 8 leading solicitors in the UK in asset recovery, with Steven and Anthony occupying the first 2 places.

• PCB is described as having “a strong track record in high-profile recoveries”.

• Steven Philippsohn is described as “an internationally renowned practitioner with a wealth of
experience in high-stakes litigation. According to one source, “He is an undoubted leader and
superb legal strategist.”

•“The “fantastic” Anthony Riem is a highly rated operator with over 20 years’ experience assisting
corporate and financial institution clients with international asset tracing and recovery
actions.”

• “Completing the firm’s offering, Trevor Mascarenhas is well versed in multi-jurisdictional asset
recovery and emerges as one of the top names in London.”

“Cracking” down on defendants: further ground-breaking orders obtained by PCB Litigation

Hot on the heels of successfully obtaining the first reasoned judgment concerning the jurisdiction to grant a search order against a third party – see here – PCB Litigation has obtained two further ground-breaking orders which will substantially add to the weapons available to victims of fraud seeking to recover assets.

The background is set out in our update of 28 November 2016 – see here – when Russian Judgment debtor Andrey Chernyakov was forced to allow bailiffs to enter his London homes to search for and seize his assets. Amongst the items seized were a number of electronic devices.

Very shortly after, we successfully applied for an order that these devices be imaged so that they could be reviewed for information on assets. This order was obtained without notice to the Defendants and others claiming that the devices belonged to them, and the first three months of the review exercise similarly took place without notice to these individuals.

Once the imaging had taken place and the review commenced, we obtained at short notice an order permitting software to be run to “crack” password-protected documents so that they could be reviewed.

These two orders are ground-breaking and a fundamentally important new development in the fight against fraud.

PCB Litigation acts for the Bank of Moscow. The team consists of Anthony Riem, Nick Ractliff and Jon Felce.

First ever search order against a third party granted: the Chabra moment for search orders

Amongst the wide array of tools available in the English Courts for intended and actual claimants are what have been described as the law’s two nuclear weapons, freezing injunctions and search orders. Since the seminal case of Chabra, Courts have been willing to grant freezing orders not just against defendants, but against third parties against whom no claim is advanced but who appear to hold assets on behalf of the defendant. Yet in the quarter of a century since Chabra, and until very recently, no case seems to have tried to use the search order jurisdiction in a similar way. The matter of Abela and others v Baadarani (Third Party: Fakih) [2017] EWHC 269 (Ch) – in which PCB Litigation act for the Claimants – has now achieved that.

The background to the case is as follows. In 2009, the Claimants commenced proceedings against Mr Baadarani and another defendant. There then followed a jurisdictional challenge by Mr Baadarani, culminating in what is the leading case regarding alternative service out of the jurisdiction (Abela and others v Baadarani [2013] UKSC 44). Following the Supreme Court’s rejection of Mr Baadarani’s jurisdictional challenge, the matter then proceeded until, in June 2015, judgment was entered against Mr Baadarani in a sum of over US$20 million following his failure to comply with a number of unless orders. As part of enforcement efforts, and having obtained a worldwide freezing order against Mr Baadarani the day before, PCB obtained a number of third party disclosure orders, including against a bank and the Respondents to the Search Order obtained shortly after. In response to the disclosure orders, the bank provided considerably more documents than the Respondents had, and the disclosure that was provided suggested that the Respondents had conspired with Mr Baadarani to backdate an asset statement. This was in fact created in 2015 and backdated to 2013.

As a result, we successfully applied on a without notice basis for a search order against the Respondents for relevant documents in their possession. That application was granted on 21 April 2016 (Abela and others v Baadarani (Third Party: Fakih) [2016] EWHC 971 (Ch)) following our argument that, like Chabra some 25 years earlier, an order could be granted against parties against whom no cause of action was being pursued.

At a hearing in February 2017, we successfully resisted the Respondents’ attempts to challenge the Court’s jurisdiction to grant the relief obtained by the Claimants.

The Court’s decision is to be welcomed as confirming the existence of yet another tool in the litigator’s armoury.

Trevor Mascarenhas and Jon Felce act for the Claimants in this matter.

New European regime for preserving accounts

Today, EU Regulation No 655/2014 of 15 May 2014 (“the Regulation”) takes effect. It establishes a European Account Preservation Order (“EAPO”) procedure with the purpose of facilitating cross-border debt recovery in civil and commercial matters.

It is intended to operate as an alternative to domestic remedies, by allowing certain creditors in one participating Member State to freeze a debtor’s assets located in bank accounts in another participating Member State without first obtaining a court order within that state.

Applications can be made prior to commencing proceedings without notice to the debtor (as well as during proceedings and after judgment) and may give creditors the chance to obtain information about debtors’ bank accounts.

There are limitations to the scope and application of the EAPO regime which will be tested in the early months and years of the new EAPO regime, when its interpretation and utilisation is interpreted by Courts across Europe. However, used creatively, we believe that EAPOs should prove to be a useful tool for the identification and preservation of debtors’ assets, and for the enforcement of judgments where a debtor has bank accounts in certain EU member states.