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SCF Group Welcomes London Commercial Court Judgement on Litigation Brought by Novoship Claimants

By MarEx 2012-12-14 13:26:16

  • Defendants found liable to pay Novoship claimants a total of approximately USD 170 million*

In the London Commercial Court, Mr Justice Christopher Clarke gave judgement in favour of the claimants Novoship (UK) Limited and related companies, now part of SCF Group (Sovcomflot), in their litigation against the defendants, Messrs: Vladimir Mikhaylyuk (former General Manager of Novoship (UK) Limited); Wilmer Ruperti (a shipping entrepreneur); Yuri Nikitin (a Russian businessman); and, companies owned and/or controlled by them.

In summary, Mr Justice Christopher Clarke found that Mr Mikhaylyuk had conspired with Mr Ruperti and Mr Nikitin to injure and defraud the claimants, between 2002-2005, by dishonestly soliciting and receiving bribes for himself and others in connection with a series of fraudulent charters.

Mr Mikhaylyuk was also ordered to repay to NOUK the sum that he received pursuant to a compromise agreement following his dismissal in March 2006, on the basis that the settlement was reached as a result of fraudulent misrepresentations.

As a result of Mr Justice Christopher Clarke’s judgement, the defendants have been ordered to pay a total of approximately USD 169 million plus interest and costs to Novoship (UK) Limited and other ship owning companies forming part of JSC Novoship Group, comprising the following:

  • Vladimir Mikhaylyuk and Wilmer Ruperti to pay approximately USD 59 million*
  • Yuri Nikitin to pay USD 108.08 million*.

The litigation proceedings were originally brought against Mr Mikhaylyuk in London, in December 2006. Immediate action was taken by the company’s new management, at that time, to investigate the suspected irregularities that took place under NOUK’s previous management. Further investigations by the claimants uncovered additional matters that led to the allegations that Messrs Ruperti and Nikitin had conspired to injure and defraud NOUK over a number of years. Mr Justice Christopher Clarke’s judgement has now confirmed the validity of the claimants’ allegations.

*Not including interest or costs.

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Highlights

  • Mr Justice Christopher Clarke finds that SCF Group’s subsidiary Novoship (UK) Limited (“NOUK”) and the related claimants suffered losses due to the fraudulent activities of Mr Mikhaylyuk, the former General Manager of NOUK, Mr Ruperti, Mr Nikitin and the other defendants.
  • NOUK has obtained judgement in the total sum of approximately USD 169 million, before interest, comprising:
    • Approximately USD 59 million against former General Manager of NOUK, Mr Mikhaylyuk and shipping entrepreneur, Mr Ruperti and related defendants
    • US$108.08 million against Russian businessman, Mr Nikitin and related defendants
  • The judgement clearly endorses NOUK’s conviction that it had been the victim of fraud and that the decision to litigate against the defendants was the right one.

Commenting on the judgement Mr Vladimir Mednikov, Member of the Board of JSC Novoship and Chief Legal Officer of SCF Group, said:

“We are pleased with today’s judgement from Mr Justice Christopher Clarke. In the same way that the UK Bribery Act has sought to reduce bribery and corruption, we are pleased to see from the Judge’s comment that the English Court continues to steadfastly set its face against bribery and corruption.  The judgement vindicates the decision of NOUK, its shareholders and the related claimants to commence these proceedings in 2006. The decision confirms our conviction that NOUK was the victim of a series of fraudulent chartering arrangements, whilst under the company’s previous management between 2002-2005.”

“Today’s judgement is further evidence of the wider nature of Mr Nikitin’s activities against the interests of companies within SCF Group.”

Lord Fairfax, a Director of Sovcomflot (UK) Limited added:

“The finding by Mr Justice Christopher Clarke that the defendants are liable to NOUK for the sum of USD 169 million, before interest, emphasises that NOUK and the related claimants were right to proceed with their claims. This successful outcome reflects a determination on the part of SCF Group, in contrast to the Group’s previous management, to uphold the rights and lawful interests of shareholders, to have transparent management processes and good corporate governance.”