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Rupert D’Cruz QC successfully defends a jurisdiction challenge by a Part 20 Defendant in a dispute over the ownership of a valuable art collection

30.07.21

Rupert D’Cruz QC of Littleton Chambers, leading Douglas James of Crown Office Chambers, and representing the Defendant, Alexey Golubovich, has successfully defended a jurisdiction challenge by a Part 20 Defendant, Olga Mirimskaya, in a family dispute about the ownership of a valuable  art collection (“the Collection”).

Mr Golubovich is defending a claim by his (and Ms Mirimskaya’s) daughter, Nataliya Golubovich (“the Main Claim”), for a declaration as to the ownership of the Collection. The basis of the Main Claim is a Deed of Gift by which Ms Mirimskaya purported to gift the Collection to Ms Golubovich. Mr Golubovich’s defence to the Main Claim is that: (i) the Collection belongs to him under a Deed of Settlement between him and Ms Mirimskaya or, alternatively, under Russian matrimonial law or, alternatively under a constructive or resulting trust; and (ii) therefore, Ms Mirimskaya was not entitled to gift the Collection to Ms Golubovich. Mr Golubovich joined Ms Mirimskaya as a Part 20 Defendant to the Main Claim, claiming declarations against her about his interest in the Collection.

Ms Mirimskaya challenged the Court’s jurisdiction over the Part 20 Claim arguing that:

  • There was no purpose to be served in the declarations sought against her (and, therefore, she was not a necessary or proper party to the Main Claim) because she no longer asserted any right to the Collection following the disposition of her interest in it under the Deed of Gift.
  • The Court had determined that England was not the natural forum for the Part 20 Claim in a previous application by Mr Golbovich for an injunction (“the ASI Application”) to restrain Ms Mirimskaya from pursuing a claim in Moscow that the Deed of Settlement was invalid. Therefore Mr Golubovich was estopped from arguing that the England is the natural forum for the Part 20 Claim.
  • In any event, England was not the natural forum for the Part 20 Claim because: (i) Mr Golbovich and Ms Mirimskaya are both Russian citizens; (ii) their dispute relates to assets acquired during their marriage, which was made and dissolved in Russia under Russian law; (iii) there had already been extensive proceedings between them in Russia relating to their matrimonial assets, including one (commenced after the court had granted permission for service out of the Part 20 Claim on Ms Mirimskaya (“the Moscow Proceedings”) that had determined the Deed of Settlement to be invalid; (iv) a significant part of Mr Golubovich’s claim is governed by Russian matrimonial law; and (iv) most of the witnesses reside in Russia.

In a judgment handed down on 30 July 2021, Deputy Master Marsh dismissed Ms Mirimskaya’s challenge on the bases that:

  • Ms Mirimskaya is a necessary and proper party to the Main Claim because: (i) the Main Claim requires the Court to determine whether Ms Golubovich received any title to the Collection from Ms Mirimskaya and if she was not joined to the proceedings, Ms Mirimskaya would not be bound by a determination about items that once belonged to her; (ii) the Main Claim requires the Court to decide a number of issues relating to Ms Mirimskaya, including: (a) the basis on which the Collection was acquired; (b) who paid for it; (c) whether there was a common understanding between Mr Golubovich and Ms Mirimskaya about the Collection’s ownership when it was acquired; and (d) the validity of the Deed of Settlement, to which she is party. Therefore, the Main Claim and the Part 20 Claim are “closely bound up” and involve “a common thread” and “single investigation” – all factors that indicate a Part 20 Defendant to be a proper party to the main claim (see Massey v Heynes & Co (1888) 21 QBD 330; Petroleo Brasiliero SA v Mellitus Shipping Inc (The Baltic Flame) [2001] EWCA Civ 418; and Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645).
  • Mr Golubovich is not estopped by the judgment in the ASI Application from arguing that England is the natural forum of his Part 20 claims against Ms Mirimskaya. The ASI application only concerned the natural forum for determining the Deed of Settlement and not the wider points arising in the Part 20 Claim. Therefore, the forum issue before the judge in the ASI application was different to that which was before the court in Ms Mirimskaya’s jurisdiction challenge.
  • In determining the natural forum, the Court is only entitled to take into account factors in existence at the time of the original decision to grant permission to serve the Part 20 Claim on Ms Mirimskaya outside the jurisdiction (see ISC Technologies Ltd v Guerin [1992] 2 Lloyd’s Rep 430; Erste Group Bank v JSC ‘VMZ Red October’ [2015] EWCA Civ 379; Microsoft Mobile Oy v Sony Europe Ltd [2017] EWHC 374; and Satfinance Investments v Phillbrick [2020] EWHC 3527 (Ch)). Therefore, no weight could be given to the Moscow Proceedings.
  • Applying the reasoning in Credit Agricole Indosuez v Unicof [2003] EWHC 2676 (Comm), the conclusion that Ms Mirimskaya was a proper party to the Main Claim virtually concludes the question of appropriate forum in favour of England.

Rupert D’Cruz QC and Douglas James were instructed by Withers LLP, whose excellent team was led by Tatiana Menshenina and included Eliza Saunders, Elisa Wahnon and Valeriia Repina.

A copy of the judgment can be found here.

 

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