16/04/2014

Court declares US$ 2 billion diamond litigation an abuse of process.

Mr Justice Mann has handed down his ruling that the Russian/Israeli businessman Arkady Gaydamak was barred by res judicata and was abusing the Court's process by seeking a second trial of his dispute with fellow  businessman Lev Leviev.  The dispute had already been the subject of one substantial trial (before Mr Justice Vos in June 2012) and Mr Gaydamak had lost.  In these new proceedings Mr Gaydamak sought to rely on an issue which he had not raised before Vos J but which, Mann J concluded, properly belonged to the first action.   The new point was therefore barred by cause of estoppel and, in any event, Mr Gaydamak's attempted relitigation amounted to abuse of process on Henderson v Henderson principles. 

The whole of Mr Gaydamak's claim against Lev Leviev, the value of which Mr Gaydamak estimated at US$ 2 billion, was therefore struck out.  

The judgment includes a valuable analysis of the relationship between cause of action estoppel and abuse of process in light of the recent Supreme Court decision in Virgin Atlantic Airways Limited v Zodiac Seats Uk Limited [2014] AC 160.  

Andrew Fulton acted for the successful applicant (instructed by Stewarts Law LLP)