VTB CAPITAL PLC V NUTRITEK INTERNATIONAL CORPORATION AND OTHERS

[2012] EWCA Civ 808, Lord Justice Lloyd, Lord Justice Rimer and Lord Justice Aikens, 20 June 2012

Conflict of laws - Jurisdiction - Loan to company - Whether controllers of the company personally liable on the contract - Torts of deceit and conspiracy - Whether England the proper forum - Whether English or Russian law applied to the torts - Private International Law (Miscellaneous Provisions) Act 1995, sections 11 and 12 - Civil Procedure Rules Practice Direction 6B, paras 3.1(6) and 3.1(9)

VTB was a bank in London. Under a facility agreement dated 23 November 2007 VTB loaned US$225 million to RAP to fund the purchase by RAP of six Russian dairy plants from Nutritek. The agreement provided for English jurisdiction. RAP defaulted. VTB claimed that it had been induced to enter into the facility by fraudulent representations as to the value of the dairy plants and that RAP and Nutritek were not under common control. Proceedings were brought against Nutritek, Marcap BVI (a holding company which owned a substantial interest in Nutritek), Marcap Moscow (owned by Marcap BVI) and Mr Malofeev (the principal owner of Nutritek, Marcap BVI and Marcap Moscow). VTB's case was that Marcap BVI, Marcap Moscow and Mr Malofeev were jointly and severally liable to VTB in contract along with RAP, by piercing the veil of incorporation of RAP, and the English court had jurisdiction over them under article 23 of the Brussels Regulation, on the basis that they were all parties to the jurisdiction clause or, alternatively, that jurisdiction was conferred by CPR PD 6, para 3.1(6) (claims in contract). The defendants claimed that they were not parties. VTB alternatively contended that the defendants were liable in tort for fraudulent misrepresentation and conspiracy, and that the court should grant permission to serve them out of the jurisdiction under CPR PD 6B, para 3.1(9) (damage sustained within the jurisdiction). The defendants argued that VTB had not suffered any loss.