17/01/2025

Magomedov judgment marks latest step in long-running Halimeda defence

The judgment handed down on 17 January in Ziyavudin Magomedov and others v (1) TPG Group Holdings (SBS) LP … (9) Halimeda International Limited … and 20 others [2025] EWHC 59 (Comm) is the most recent of a series of connected judgments across several jurisdictions in four separate actions in litigation lasting over four years in which Halimeda has established indebtedness to it by the complainant SGS companies in excess of US$2 billion and has prevailed over strongly denied counter-allegations of fraudulent conspiracy made by the SGS entities.

Background

In the most recent Commercial Court action, the claimants alleged two frauds. Halimeda was alleged to have been involved in only one, as a conspirator in a scheme to wrest ownership from the claimants of the FESCO group, one of the world’s largest logistics groups – which owns, amongst other assets, the port of Vladivostok. The only wrongdoing alleged against Halimeda was that it had brought claims against SGS entities, including to recover the huge debts owed to it by the SGS entities. A peculiarity is that Halimeda is a subsidiary of FESCO itself.

Judgment

In a comprehensive judgment, Bright J held that the English court would not take jurisdiction over either limb of the claims, set aside the earlier ex parte orders for service out on Halimeda and others, and gave summary judgment in favour of those defendants who had applied for it.

Regarding Halimeda, the judge found that only one of the allegations made against it raised a serious issue to be tried, but went on to hold that the claims against it could not pass through any of the many jurisdictional gateways put forward by the claimants and – following a detailed review of the law on forum (non) conveniens, agreed with Halimeda and other defendants that the appropriate place for any claims to be heard was Cyprus and not England.

The jurisdiction judgment follows the October 2023 judgment of Butcher J in the same litigation who dismissed the claimants’ applications for freezing and notification orders against Halimeda and other defendants: [2023] EWHC 2655 (Comm).

History

So far as concerns Halimeda, the London Commercial Court action follows on from earlier related litigation:

• Halimeda v Sian: BVI insolvency proceedings in which Halimeda obtained a liquidation order over Sian (the fifth claimant in the London action) in respect of an unpaid loan debt of US$226.3 million. Sian’s answer, based on the FESCO conspiracy, did not amount to a sufficient ground of opposition. Sian appealed to the Eastern Caribbean Court of Appeal and again to the UK Privy Council, which in June 2024 gave a seminal judgment in Halimeda’s favour, which set aside the English law on the interaction between insolvency process and arbitration agreements (the rule in Salford Estates v Altomart Ltd (No 2) [2015] Ch 589) in favour of the BVI / Eastern Caribbean CoA approach in Jinpeng v Peak Hotels and Resorts Ltd (BVIHCMAP2014/0025 and 2015/0003) (unreported) 8 December 2015).
• Halimeda v Maple Ridge: LCIA arbitration claim in which Halimeda obtained a principal award against Maple Ridge (the sixth claimant in the London action) in respect of an unpaid loan debt of US$1.8 billion. Maple Ridge subsequently abandoned its defence based on the FESCO conspiracy.
• SGS Universal Investment Holdings & ors v Domidias, Halimeda & ors: a fraudulent conspiracy claim brought against Halimeda and others in the BVI, again based on the FESCO conspiracy, but abandoned by the BVI claimants very shortly before the hearing of a jurisdiction challenge brought by Halimeda and others.

Counsel

• In the jurisdiction challenge, Halimeda was represented at court by Paul Lowenstein KC and Colleen Hanley. Sam Goodman also worked on the application.
• In the earlier injunction phase, Halimeda was represented by Paul Lowenstein KC, Andrew Feld and Sam Goodman and FESCO by Paul Lowenstein KC, Colleen Hanley, Andrew Feld and Sam Goodman.
• In the Halimeda v Sian insolvency proceedings, Paul Lowenstein KC led (at various stages) Tony Beswetherick KC, Rupert Hamilton and Michal Hain.
• In the Halimeda v Maple Ridge LCIA proceedings, Paul Lowenstein KC led (at various stages) Tony Beswetherick KC, Sarah Tresman and Sam Goodman.
• In the SGS v Domidias and Halimeda BVI proceedings, Paul Lowenstein KC led (at various stages) Tony Beswetherick KC and Sam Goodman for Halimeda.

The Halimeda team was instructed in London by Yuri Botiuk and James Collins of CANDEY and in the BVI by Andrew Willins of Appleby.