Surkis and others v Poroshenko and another  EWHC 2512 (Comm)
In the latest instalment of cases in the English courts regarding claims against current or former foreign heads of state, the Commercial Court has found that it has no jurisdiction to hear claims against Mr Petro Poroshenko, the Fifth President of Ukraine (who served as President from 2014 to 2019). It also found it lacked jurisdiction in relation to claims against Ms Valeria Gontareva, the former Governor of the National Bank of Ukraine.
The Judgment will be of interest to those following developments in the law of state immunity and the act of state doctrine, especially as they apply in commercial matters. The Judgment also contains cogent analysis of a purported waiver of state immunity.
The claims arose out of Ukraine’s nationalisation of PrivatBank, which was for many years the largest bank in the country. The claimants alleged that Mr Poroshenko and Ms Gontareva conspired to use their influence to ensure that funds that certain companies held in PrivatBank were subject to a bail-in procedure during the 2016 nationalisation. They claimed this was done with the object of depriving the companies of the funds (Judgment, §20). The claimants alleged that the officials committed the torts of unlawful means conspiracy, lawful means conspiracy and/or procuring a breach of contract under Cypriot law, or in the alternative, acts contrary to Ukrainian law (§22).
Mr Poroshenko and Ms Gontareva denied the claims in the strongest possible terms (§64) and challenged the court’s jurisdiction on two grounds (1) state immunity and (2) the act of state doctrine. They succeeded on both grounds. The judge also granted Ms Gontareva’s application for reverse summary judgment.
Mr Poroshenko and Ms Gontareva argued that they were immune because the act which forms the basis of the claims – the alleged conspiracy – would have been done by them in their public capacity as the President and central bank Governor, respectively. Mr Justice Calver found the claimants’ argument that the officials would have been “doing no more than any other private citizen could do, the only different being that they happened to have more connections and influence within the Ukrainian government” was a “wholly artificial construct” (§75). He emphasised that the court must consider “the whole context in which the claim is made” (§79) and that even acts alleged to be motivated by a private or improper purpose are immune if done under colour of official authority (§81). Mr Poroshenko and Ms Gontareva were therefore immune under ss 1 and 14 of the UK State Immunity Act.
Waiver of immunity
Shortly before the hearing date, the “acting State Secretary” of the Ministry of Foreign Affairs of Ukraine sent a letter in which he said that he considered that there was no issue of state immunity which arose and which was capable of being waived by Ukraine (§114). The claimants contended that this letter waived the immunity of Mr Poroshenko before the English courts (§113). Mr Justice Calver disagreed and instead accepted the submissions of Mr Poroshenko that any waiver must be express and unequivocal, and this letter did not even purport to waive Ukraine’s immunity in respect of the proceedings (§§115-116). He also found that the Claimants were unable to discharge their burden of satisfying the Court that the state of Ukraine had authorised the letter (§117).
Act of state
In addition to finding that the objection on state immunity grounds was well founded, Mr Justice Calver held that the claims engaged the second rule of the act of state doctrine, which bars the court from making a determination about an executive act of Ukraine. The judge noted that there was “hotly debated issue as to whether as a matter of principle the act of state doctrine applies to executive acts which are unlawful under the law of the foreign state” (§153). In his view, “the second rule mandates that an English court should recognise and not question the effect of an executive act, provided that it has not been declared null and void in a final judgment of the highest court of the state whose executive performed the act” (§159). In any event, the claimants had failed to show that the act was unlawful under Ukrainian law (§160).
Professor Philippa Webb acted for Mr Poroshenko led by Lord Goldsmith QC and alongside Monika Hlavkova. She was instructed by a team at Debevoise & Plimpton LLP led by Christopher Boyne and including Hugo Farmer and Sara Ewad.