JSC BM Bank v Vladimir Abramovich Kekhman & Ors

JSC BM Bank v Vladimir Abramovich Kekhman & Ors

The court found, on the balance of probabilities and based on extensive documentary and witness evidence, that Mr Kekhman knew of and directed the making of fraudulent financial representations to the claimant, intending to induce the loan, and further orchestrated asset dissipation to defeat recovery. The claimant relied on the representations and suffered loss. Under Russian law, Mr Kekhman is liable in tort for deceit and conspiracy. His English bankruptcy did not discharge liability for fraud. Judgment was entered for the claimant for the loan amount less recoveries, plus interest.

Parties
Claimant: JSC BM Bank; First Defendant: Vladimir Abramovich Kekhman; Second Defendant: JFC Group Holding (BVI) Limited; Third Defendant: Whilm Management Limited; Fourth Defendant: Garold Projects Limited
Jurisdiction
England and Wales
Judgment Date
12 April 2018
Procedural Posture
Commercial Court Civil Claim / Final Judgment After Full Trial
Outcome
Judgment for the claimant against Mr Kekhman for fraudulent misrepresentation and conspiracy under Russian law.
Legal Topics
Fraudulent Misrepresentation, Conspiracy to Defraud, Directors' Duties, Bank Guarantees, Russian Law Torts, Bankruptcy Discharge Exceptions
Civil Procedure Commercial Law Tort Law Banking Law Insolvency Law Fraudulent Misrepresentation Conspiracy to Defraud Directors' Duties +3 more

Case Brief

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Parties

JSC BM Bank

Claimant

Vladimir Abramovich Kekhman

First Defendant

JFC Group Holding (BVI) Limited

Second Defendant

Whilm Management Limited

Third Defendant

Garold Projects Limited

Fourth Defendant

Procedural Posture

Commercial Court Civil Claim / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether Mr Kekhman was liable in tort under Russian law for fraudulent misrepresentation (deceit) inducing the claimant to lend US$150 million to JFC Russia.
  2. 2 Whether Mr Kekhman was liable for conspiracy to dissipate assets to defeat creditors, under Russian law.
  3. 3 Whether the claimant relied on the false representations and suffered loss as a result.

Ratio Decidendi

The court found, on the balance of probabilities and based on extensive documentary and witness evidence, that Mr Kekhman knew of and directed the making of fraudulent financial representations to the claimant, intending to induce the loan, and further orchestrated asset dissipation to defeat recovery. The claimant relied on the representations and suffered loss. Under Russian law, Mr Kekhman is liable in tort for deceit and conspiracy. His English bankruptcy did not discharge liability for fraud. Judgment was entered for the claimant for the loan amount less recoveries, plus interest.

Court Disposition

Judgment for the claimant against Mr Kekhman for fraudulent misrepresentation and conspiracy under Russian law.

Orders

  • Mr Kekhman to pay US$140 million plus 305,732,000 roubles less recoveries of US$5,895,278.81, plus interest.
  • Claim also succeeds in the alternative on the dissipation claim for US$18,531,000 (subsumed in the above).