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September 2015

Sep 2015
PCB news
Steven Philippsohn has again been recognised by Thomson Reuters in its Super Lawyers London for 2015.
PCB Litigation has recently been instructed to act for a joint venture partner in a dispute against a substantial overseas bank involving a multi-million pound claim for damages, an international arbitration and proceedings in various overseas jursidictions
The “simply outstanding”, “highly qualified” and “extremely skilled” team at PCB Litigation was top-ranked again by The Legal 500 in Civil Fraud, in particular for its representation of the primary defendant to a $1bn claim and its instruction by Bank St. Petersburg in a cross-border asset recovery case. “Unparalleled” “doyen” and “strategic thinker” Steven Philippsohn was again listed as a leading individual, Anthony Riem was described as “tremendous”, “great for complicated cases” and as having “magnificent client-handling skills”, whilst Trevor Mascarenhas was described as a “genius” with a “fine intellect” and a “remarkable lawyer”. Read More

Does fraud unravel all?

Sep 2015
Fraud updates
Hayward v Zurich Insurance Company Plc “No Court in this land will allow a person to keep an advantage he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything.” So said Lord Denning in 1956. However, a recent case which is now poised to reach the Supreme Court brings into focus the extent to which fraud does unravel all, and is poised to have implications for parties who identify fraud after proceedings have been concluded. In that case, the Supreme Court recently granted permission to appeal to Zurich Insurance Company after it contested a Court of Appeal decision from earlier this year. The case concerns the insurer’s attempt to overturn a decision which allowed a claimant to keep the proceeds of a settlement notwithstanding evidence later coming to light that he had been dishonest. The claimant, Hayward, had claimed damages for back injuries following an accident at work. Although Zurich had obtained video surveillance which appeared to indicate that the claimant was exaggerating his injury, a settlement agreement was reached between the parties. Subsequent evidence emerged that the claimant had recovered entirely from his injuries a year before the settlement agreement had been concluded. As a result, Zurich commenced proceedings against Hayward, seeking damages for deceit. Its position was that it had settled the claim as a result of Hayward’s misrepresentations because it was concerned that Hayward would be believed in court, not least since its own expert was not fully persuaded that Hayward was being deceitful. At first instance, the High Court cut Hayward’s damages to £14,720, but the Court of Appeal reinstated the original settlement of £135,000 on the basis that Zurich had entered into the agreement with its eyes open and because of the wider principle of finality of settlements. The Supreme Court’s decision is poised to have implications for parties who identify fraud after proceedings have been concluded. In the meantime, it is clear that where a party is suspicious that it is being misled, it is safer to investigate that suspicion at the time rather than subsequently to seek to unravel any settlement in the event that suspicion proves to be true. Read More

Taking a backwards step forwards – landmark Privy Council ruling adds new weapon to fraud practitioners’ arsenal

Aug 2015
Fraud updates
As fraudsters become increasingly creative in dissipating and hiding the proceeds of their illegitimate activities, it is critical that fraud practitioners have a full arsenal of weapons available to them to recover assets for the benefit of victims of fraud. In a recent landmark decision that also has ramifications for any third parties holding assets, the Privy Council (which acts as the highest appellate court for a number of Commonwealth countries) has opened the door for the use of another tool in the perennial fight against fraudsters, namely backward or backwards tracing. In that case, two BVI companies appealed a decision from Jersey that they were liable to return over US$10 million in bribes paid to the former mayor of the Municipality of Sao Paulo. Proceeds of the bribery were alleged to have flowed to accounts in Jersey via a New York account, and the claimants sought to recover the funds held in the Jersey accounts. The appellants argued that they were not liable for the full US$10 million, because certain proceeds of the bribery were only paid into the New York account after the last payment was made from that account into the Jersey account. To counter that argument, the claimants sought to rely upon a concept which has been the subject of much debate: backward or backwards tracing. Tracing allows a party to demonstrate what has happened to its property, identify the proceeds of that property and who has handled or received them, and then obtain a proprietary claim against either the original property, an asset substituted for the original property or its proceeds. Meanwhile, backwards tracing involves turning a property interest into (or substituting it for) something which the holder already has. Rather than necessarily tracing one asset into another, the Privy Council recognised that the substance, rather than the form, of transactions should be examined to establish whether there was a sufficiently close causal and transactional link between the various steps taken. If those steps were part of a coordinated scheme, then the strict order in which the associated events occurred should not matter. As such, the Privy Council rejected the argument that there could never be backwards tracing or that the court could never trace the value of an asset whose proceeds are paid into an overdrawn account. Accordingly, the decision emphasises the need for those holding assets to understand the ultimate source of those assets before dealing with them, in order to seek to mitigate the risk of inadvertently dealing with third parties’ assets. Insofar as the global battle against fraud is concerned, this is a welcome development with implications across the Commonwealth and it is of persuasive authority in England and Wales. As the UK member of Fraudnet, the renowned worldwide specialist ICC task force for asset recovery (which includes amongst its members local experts in a number of Commonwealth jurisdictions), PCB Litigation is extremely well placed to assist clients with the successful implementation of cross-border strategies for the recovery of assets. Read More

August 2015

Aug 2015
PCB news
PCB Litigation was recognised for being home to a trio of “outstanding” asset recovery lawyers by the International “Who’s Who” Legal Asset Recovery 2015: “world-class” Steven Philippsohn (one of only five Most Highly Regarded Individuals in Europe), “great tactician” Anthony Riem and Trevor Mascarenhas.
PCB Litigation has obtained judgment for £2m plus interest and indemnity costs on behalf of the Ritz Club against billionaire Safa Al Geabury. As was widely reported in the national press, Mr Al Geabury claimed that he had a gambling addiction and the Ritz Club ought to have stopped him gambling; he counterclaimed for £4m that he lost gambling at the Ritz Club. In dismissing his counterclaim and giving judgment for the Ritz Club, Mrs Justice Simler was persuaded on the facts presented by PCB and Clive Freedman QC that Mr Geabury had no gambling addiction. Read More

Bank Enforces Judgement against Assets held for Liechtenstein Foundation

Jul 2015
Fraud updates
In a judgment handed down yesterday, PCB Litigation successfully obtained the appointment of execution receivers over the membership interests of an English LLP. Those membership interests were registered in the names of third parties who in turn claimed to be holding those interests for the benefit of a Liechtenstein foundation, of which the judgment debtor, Mr Skurikhin was merely a discretionary beneficiary. However, the Court was prepared to look at the reality of the position that the judgment debtor either had a right to call for the assets of the foundation to be transferred to him or had de facto control of those assets. Thus the membership interests in the LLP should be considered in equity to be the judgment debtor’s assets and that it was open to the court to appoint a receiver over them. Having reached those conclusions on the facts, the Court considered it plainly just and convenient for receivers to be appointed. The English LLP holds valuable real estate in Italy and the demands of justice include promotion of the policy that judgments of the English Court should be complied with and if necessary enforced. The case is reported at JSC VTB Bank v Skurikhin and others [2015] EWHC 2131 (Comm) with Tim Penny, instructed by PCB Litigation, appearing for VTB Bank. PCB Litigation has already succeeded in obtaining worldwide freezing order relief against Mr Skurikhin, obtaining judgments from the English Court based upon Russian judgments, and having Mr Skurikhin committed to prison for failing to disclose assets. The case has previously shown the English Court’s willingness to recognise and enforce foreign judgments where there is no reciprocal enforcement treaty in place between the foreign jurisdiction and England. This latest judgment now demonstrates the willingness of the English Court to look at the reality of the position when confronted by complex structures disguising the true ownership of assets, and to prevent defendants making themselves judgment-proof. Read More

July 2015

Jul 2015
PCB news
PCB Litigation hosted a seminar on the latest developments in asset recovery. Steven Philippsohn and Trevor Mascarenhas presented together with Clive Freedman QC on the subjects of Norwich Pharmacal orders, trust busting and piercing the corporate veil.
PCB Litigation has made a successful application for the rectification of the Companies House register to remove an unauthorised and wrongfully registered notice of appointment of an administrative receiver to a solvent training company.
PCB Litigation has been instructed to act on a multi-million dollar commodities fraud in Central Europe. Read More

June 2015

Jun 2015
PCB news
Steven has accepted invitations to speak to 2 Organisations in Hong Kong on Fraud in Arbitration Cases.
Steven Philippsohn was a member of a Panel speaking on Global Asset Recovery at the St Petersburg Legal Forum.
PCB Litigation is advising on a billion dollar corporate fraud in which substantial assets have been transferred to multiple jurisdictions. Read More

May 2015

May 2015
PCB news
PCB Litigation are advising an Asian Bank on an internal fraud issue.
PCB Litigation has been retained on behalf of an Asian client in injunction proceedings arising out of a multi-million dollar ICC arbitration in the oil and gas industry.
PCB Litigation has been retained in respect of various claims involving the estate of a high net worth individual.
PCB Litigation has been retained to act in a $600 million ICSID arbitration involving an African state. Read More

Supreme Court holds fraudulent conduct of directors cannot be attributed to company

Apr 2015
Fraud updates
Many frauds are carried out using corporate vehicles, which ultimately transpire to be little more than empty shells. Victims of the fraud and other creditors will often want to look to those who have breached their duties to the company in allowing the fraud to be perpetrated. Such claims have been brought though liquidators or administrators, but in a leading case, the House of Lords in (Moore Stephens v Stone Rolls Limited [2009] UKHL 39) determined that a "one man company" was fixed with the knowledge of the fraudulent director, so the company was found to have also acted fraudulently and was barred from bringing a claim against auditors by public policy preventing a claimant relying on its own illegal conduct. In Jetivia SA and another (Appellants) v Bilta (UK) Limited and others (Respondents) [2015] UKSC 23, the Supreme Court unanimously held that where there was a claim by the company and its liquidators for breach of a director’s duty, it would be unjust and absurd to attribute the wrongdoing of the director to the company he or she had damaged. This decision is to be welcomed in assisting victims of fraud to obtain redress against those ultimately responsible. Read More

PCB Retained in $650m Middle East Dispute

Apr 2015
Fraud updates
PCB Litigation is acting for Majid Al-Sayed Bader Hashim Al Refai, the former managing director and chief executive of the Bahrain based, Bank Alkhair in the recently commenced first trial of the US$650 million legal dispute involving the Bank and the Saudi Arabian based property group, Dar Al Arkan Real Estate Development Company as reported on 31 March in the attached Financial Times article: Read here Read More

March 2015

Mar 2015
PCB news
PCB Litigation has been retained in respect of claims arising from an apparent multi-million pound real estate investment fraud.
PCB Litigation has successfully settled a substantial dispute concerning the acquisition of high value prime real estate in London. Read More

Wealth owned by Criminals has ‘vanished abroad’- UK FBI

Feb 2015
Fraud updates
This week's admission by the Head of the UK National Crime Agency, dubbed 'Britain's FBI,' that only a small fraction of the amount confiscated from criminals was due to money being transferred abroad demonstrates their apparent absence of resources that are available in other asset recovery processes. The Civil Courts enable victims of fraud to obtain Court Orders in numerous jurisdictions to locate and arrest assets that have been deliberately concealed. As the UK member of the worldwide network of the ICC specialist asset recovery task force, PCB have 24/7 access to global resources making them one of the market leaders in developing and implementing successful strategies for the recovery of assets. For further information please contact Steven Philippsohn, Anthony Riem or Trevor Mascarenhas. Read More