Pugachev Pursued by High Court for Multi-Billion sum
25 February 2016
Hogan Lovells has won another significant victory in the ongoing dispute between Sergei Pugachev and the Deposit Insurance Agency (DIA), with the High Court of England and Wales enforcing a Russian Court judgment that Pugachev must pay RUR 75.6 billion to creditors following the collapse of Mezhprombank in 2010.
Earlier this month Pugachev was held to be in contempt of court on 12 counts and was sentenced by the English Court to two years' imprisonment. Since then, he has made no attempt to purge his contempts and has instead remained a fugitive from justice on the run in France.
Partner Michael Roberts, leading the Hogan Lovells team representing the DIA, says:
"In the course of 2015 Sergei Pugachev indicated he planned to challenge any steps taken by the DIA to enforce the Russian judgment in England, but instead chose not to respond to the enforcement claim at all. In his absence, the High Court confirmed that there is no reason why the judgment of the Commercial Court of Moscow should not be enforced outside Russia. We welcome this important step towards recovering the sum owed by Pugachev to the creditors of Mezhprombank."
On 30th April 2015 the Moscow City Commercial Court gave a judgment on the DIA's claim on holding Sergei Pugachev subsidiary liable for the insolvency of CJSC "Mezhdunarodny Promyshlenny Bank". Under the judgment of the Russian court he must pay a sum of RUR 75.6 billion. His subsequent appeals have so far been rejected at every level, most recently by the Russian Supreme Court in January 2016.
The DIA commenced proceedings against Mr Pugachev in Russia in December 2013 after he was accused of helping himself to over US$2 billion from Mezhprombank, while allegedly controlling and beneficially owning it.
Civil proceedings were subsequently initiated against Mr Pugachev in England in July 2014. At the same time, an injunction freezing Mr Pugachev's worldwide assets up to the value of £1.17 billion, and requiring him to disclose all his assets worth £10,000 or more, was granted by the High Court of Justice on 11 July 2014 in support of the proceedings in Russia.
The DIA obtained judgment against Mr Pugachev in Russia in April 2015 in the amount of over US$ 1 billion. Following the dismissal of two separate appeals by Mr Pugachev, Hogan Lovells has now issued further proceedings to have the judgment enforced in this jurisdiction.
The Hogan Lovells team includes partners Michael Roberts and Rebecca Wales (London) and Alexei Dudko (Moscow).