London has famously been a popular destination for wealthy Russian and former Soviet Union individuals: the property market, the London Stock Exchange and financial regulation have all contributed to the UK being an attractive choice for foreign capital.
The British press also have a preoccupation with wealthy Russians and other nations in the former Soviet Union, reporting frequently on the extensive assets owned (and often contested) up and down the UK.
It is perhaps no wonder, then, that the use of London’s commercial courts by businesses, individuals and institutions from the former Soviet Union has continued to go from strength to strength, bucking the overall decrease in commercial disputes heard by the London courts in 2019 / 20.
Portland’s Commercial Courts Report has found that Kazakhstan and Russia sent a record number of litigants to London’s courts in the past year, particularly for major civil fraud and investigations cases. This continues a year-on-year increase for the past five years.
The sprawling High Court litigation involving Otkritie, National Trust Bank, and the Central Bank of Russia accounted for nearly half of the Russian litigants in 2019/20.
This included not only the banks themselves, but their former owners Ilya Yurov, Sergei Belyaev, and Nikolai Fetisov, along with their spouses.
Trust Bank’s former owners stated in January 2020 they would appeal a £720 million decision against them, suggesting that the dispute will continue to drive Russian litigants’ presence in London’s Commercial Court in 2020/21.
In a similar vein, Kazakh litigants’ defiance of the overall downward trend can be largely chalked up to the civil fraud proceedings involving Kazakhstan Kagany.
Nearly 60 percent of Kazakh litigants appeared in the Commercial Courts in 2019/20 in relation to the paper and packaging giant’s successful efforts to recover over £250 million from its former management and shareholders. Kazakh litigants increased by 76 percent in 2019/20.
Unsurprisingly, Kazakh v Kazakh and Russian v Russian cases were in the top five party pairings by nationality over the last year. Only UK v UK was more common than Kazakh litigants battling each other in London’s courts. This may decline as the Astana International Financial Centre in raises its profile and increases its case load.
2019/20 was by no means quiet for Ukrainian litigants, either – the London courts upheld a high-profile $1.9 billion freezing order against powerful oligarchs Igor Kolomoisky and Gennadiy Bogolyubov, the former owners of PrivatBank, Ukraine’s largest lender. The former, Mr Kolomoisky, is close to Ukrainian President Volodymyr Zelensky.
Despite this, Ukraine, has slipped out of the top ten most common nationalities in London’s courts in 2019/20, following a record number of litigants in 2018/19. The slight drop to only number 11 suggests, however, that the country’s high profile in the London courts will continue.
The London courts are still attracting a wide range of nationalities to resolve commercial disputes, and this is certainly true of Russia and the former Soviet Union. The overall drop in cases and litigants after years of growth is, however, noteworthy. The impact of COVID-19, and of Britain’s exit from the European Union, will ensure the 2020/21 trends are keenly followed.