BL-2017-000665 - [2025] EWHC 2909 (Ch)

Arguments relating to delay in production of the Judgment are front and centre of Mr Bogolyubov’s application for permission to appeal. Ground 1 contends that excessive delay has resulted in a judgment that the Court of Appeal cannot be satisfied is safe and which is unfair. It is said that a number of errors which went to key findings in the Judgment were likely to have been caused by the delay “in particular given the length of the delay, the complexity of the case and the volume of evidence and submissions before the court at trial”.

Most of the findings challenged by Mr Bogolyubov are challenges to my findings of fact. I have already explained my understanding of the approach that the Court of Appeal will take to findings made in a judgment which has been subject to a significant delay, irrespective of the reasons for it. I have therefore approached this application for permission to appeal having regard to the principles the Court of Appeal applies when determining an appeal on the facts where the handing down of a judgment has been delayed. These are explained in the judgment of Falk LJ in Phones 4U at [218] to [228] and again at [321] to [328]. It is right to record that Ms Montgomery accepted in her oral submissions that, even where there has been what she characterised as excessive delay, the test remains that the Court of Appeal must be satisfied that the conclusions I reached on the facts were plainly wrong.

I do not understand there to be any challenge based on illegitimate compartmentalisation (see Falk LJ’s discussion at [229] to [232] and Bank St Petersburg PJSC v Arkhangelsky [2020] EWCA Civ 408). The absence of any such challenge is important in the sense that it is not said by either of the Individual Defendants that I failed to step back and look at the picture as whole.

Eight points are then relied upon as indicators that delay might have affected my recollection of the evidence on material points. It seems to me that what is said in paragraphs 4.1 to 4.8 of Mr Bogolyubov’s skeleton argument amounts to a series of cherry-picked examples of the whole sea of evidence which I took into account in making the factual findings relating to (a) how the Scheme was administered, (b) Mr Bogolyubov’s ongoing involvement in the Bank, (c) what were said to have been Mr Thompson’s concessions, and (d) what were said to have been the misremembering of aspects of the evidence and Mr Bogolyubov’s case. The challenges identified in these paragraphs cut across the basic principle that merely because a judge does not refer to a particular piece of evidence does not mean that it was overlooked. None of them have substantial significance in their own right and they all suffer from being a single piece of evidence or a single discrete argument wrenched out of the context in which they sit.

In my view, these complaints amount to a miscellaneous collection of points which fall well short of establishing that the findings I made (a) that there was a Misappropriation from which Mr Bogolyubov benefitted, (b) that Mr Bogolyubov had not stepped back from the Bank at the time of the Misappropriation, (c) that Mr Bogolyubov controlled the relevant entities involved in the Misappropriation or (d) that the Misappropriation caused harm to the Bank were wrong because of the delay, or indeed were wrong at all. I do not consider that Mr Bogolyubov has a real prospect of successfully establishing that the Judgment was unsafe or unfair on these grounds.

As to Ground 2, it is said that I erred in failing to determine the relevant issues, failed to take into account the relevant evidence and arguments and adopted an approach that was inconsistent with other aspects of the Judgment when I concluded that there had been a misappropriation carried out by way of the Relevant Drawdowns and the Unreturned Prepayments. I do not think that the various challenges made under Ground 2 (and summarised below) have any real prospect of success.

The first complaint under this Ground of Appeal related to the approach I adopted to accounting methodology. In my view it is misplaced (see [306] to [310], [952] and [1131] to [1144] of the Judgment). Taken as a whole, the Judgment makes quite plain why I preferred the approach adopted by Mr Thompson.

The Bank said that it did not fully understand the second Ground 2 criticism to the effect that I erred in treating the Relevant Drawdowns as a unitary group. Ms Montgomery’s response in her oral submissions was that I went wrong by looking at the drawdowns on a compendious basis because it was common ground at trial that each of the Relevant Drawdowns was itself a separate tortious act and I did not grapple with the detail of each one separately. This was central she said because of a failure to analyse what can be inferred to have been Mr Bogolyubov’s role in relation to each one of them. I do not accept that this argument means that the appeal has a real prospect of success. I looked at each of the Relevant Drawdowns by reference to the SOFs ([296ff] of the Judgment), while the section of the Judgment which considered the Relevant Drawdowns ([373] to [405]) did so by reference to the different types of drawdown which formed part of Mr Bogolyubov’s case. The findings I made in relation to the role which each of the Individual Defendants played in the Misappropriation ([793] to [802] of the Judgment) are also relevant to this criticism and I returned to this exercise when considering Mr Bogolyubov’s use of funds and the bigger fraud argument ([1124ff] of the Judgment).

The third Ground 2 criticism is that I did not take into account two aspects of the forensic accounting expert evidence. I disagree. This whole issue of the funding of Unreturned Prepayments was considered both in the section of the Judgment dealing with Relevant Drawdowns and in the section dealing with the Use of Funds Defence. Further the issue of the overdraft was considered in [392] to [394] of the Judgment and it is difficult to see why specific reference to Mr Thompson’s evidence on the point needed to be made.

The fourth Ground 2 criticism refers in very general terms to a failure to refer to Skypes and e-mails showing how the Scheme was administered. This point was also referred to as one of the Ground 1 examples. Ms Montgomery explained in her oral submissions that this was intended as a reference to material which related to Mr Bogolyubov’s case that he did not give specific instructions in relation to specific drawdowns. In the light of the findings I made in the Judgment as to Mr Bogolyubov’s role in the Misappropriation (see e.g., the summary at [793] to [802] of the Judgment), I do not think that this challenge has any real prospects of success.

Likewise I do not understand the reference to a notice to prove in relation to the Bank’s transactional data. This was referred to in Mr Bogolyubov’s written and oral openings, and was also addressed by the Bank in opening, but it was not pursued thereafter. The Bank said very clearly in its written closings that it understood that no challenge to authenticity was maintained and that, if this was wrong, Mr Bogolyubov would no doubt explain the position in his closing submissions. Nothing was then said about the notice to prove in his written or oral closings, and as the Bank has pointed out he himself relied on the transactional data on a number of different occasions.

The third Ground of Appeal (Ground 3) again relates to the conclusions I reached in relation to Mr Bogolyubov’s involvement in the Misappropriation. Apart from repeating the submission that my overall recollection of the evidence was affected by delay, it is said that I made three particularly significant errors in reaching this conclusion.

The first error (Ground 3A) is said to be that I erred in drawing an inference that all of the Bank’s allegations on liability were established as a consequence of Mr Bogolyubov’s decision not to give evidence. This inference was said to have been drawn at large and amounted to a reversal of the burden of proof. I do not think that this argument has a real prospect of success, whether or not the Court of Appeal decides that it is necessary to adopt what Falk LJ in Phones 4U at [328] called “the additional level of scrutiny required of a delayed judgment”, when deciding whether I was plainly wrong on the factual findings I made.

The incontrovertible facts which made it appropriate to draw the inferences against Mr Bogolyubov as to his role in the Misappropriation in the absence of evidence from him personally were wide ranging. They included (a) the fact that he and Mr Kolomoisky were very close associates, (b) the fact that between them they held virtually all of the shares in the Bank, (c) the fact that they were two of the three members of the Supervisory Board, (d) the fact that Mr Bogolyubov was the Bank's chairman, (e) the fact that Mr Dubilet, Mr Novikov and Ms Gurieva who specifically approved each of the Relevant Loans were all were closely associated to both of the Individual Defendants, (f) the fact that Mr Bogolyubov admitted ownership interests in some of the Borrowers and some of his assets (like those of Mr Kolomoisky) were put up as purported security for the lending, (g) the fact that Mr Bogolyubov, like Mr Kolomoisky, later used his own assets to discharge some of the lending as part of the Asset Transfer, (h) the fact that he like Mr Kolomoisky expressed no surprise and took no action when the NBU started to uncover the true state of the Bank's loan book and (i) the fact that notwithstanding his case that he stepped away from the Bank in 2014, he actually started to employ a number of PBC nominees and former Bank staff in 2017. In my view it is not realistic for Mr Bogolyubov to argue that these facts on their own were insufficient to shift the evidential burden to Mr Bogolyubov to explain why the inferences that he knew all about the Misappropriation, authorised the steps which were taken to put it into action and is likely to have benefited from it should not be drawn in the absence of evidence from him to the contrary.

The second error (Ground 3B) is said to be that I erred in concluding that Mr Bogolyubov benefited from the Misappropriation, relying on this to conclude that he was involved in it. It is said that I took the wrong approach to the drawing of inferences in the section of the Judgment ([769] to [792]) in which I made the findings under challenge. I do not think that Mr Bogolyubov has a real prospect of success on this ground for very similar reasons to those I have already outlined in relation to Ground 3A.

The third error (Ground 3C) is said to be that I was wrong in finding that Mr Bogolyubov had not stepped away from the Bank. In my view this Ground of Appeal also has no real prospects of success. In [669] to [691] of the Judgment, I explained in some detail why I was not prepared to give the evidential weight for which Mr Bogolyubov argued to the recitals contained in the Deeds of Waiver and why I concluded that those recitals were not an accurate record of what in fact happened in 2014. In particular, given all the circumstances of the case, I do not consider it to be inherently improbable that the recitals were false even if the Deeds of Waiver themselves were authentic. No reason for that being improbable is suggested. Likewise I do not understand the contention that I was wrong to take into account the fact that the solicitor who witnessed Mr Bogolyubov’s signature was not called to give evidence in verification of its authenticity. As the Bank submitted, my finding was that the Deeds were probably signed when they purported to be signed in May and June 2015 and to that extent were authentic. The reference to the solicitor was recited as part of the background to what occurred but was not otherwise relied on in my analysis of the Bank’s arguments.

Nor do I think it is arguable that there was any procedural unfairness in the finding of an adverse inference flowing from Mr Anischenko’s absence from the witness box when the point was only raised by the Bank in closing. Although I made the finding earlier in the Judgment, I did not specifically mention it in the relevant section. In any event, it seems to me that, in the light of the Individual Defendants’ general approach to not calling evidence at the trial, the possibility that the lack of warning that this peripheral point might be taken against him would prejudice or be unfair to Mr Bogolyubov is vanishingly small.

The final challenge to my findings in relation to Mr Bogolyubov stepping back from the Bank in 2014/5 was the criticism that I failed to refer to Ms Rozhkova’s evidence. I think this is wholly misplaced. Ms Rozhkova’s evidence related to what occurred in 2016 not what had occurred a year or more earlier being the period with which Ground 3C is concerned.

Ground 4 challenges the conclusions that I reached in relation to the harm the Bank suffered as a result of and at the time of the Relevant Drawdowns. The first complaint in Ground 4A is that I failed to take into account the relevant Ukrainian law evidence and took an incorrect approach to the assessment of harm. It is said that I erred in finding that the harm was established without looking at the reality of what happened to the Relevant Drawdowns. I do not agree that there is a real prospect of success on this ground for the reasons that I gave in a number of parts of the Judgment, most especially in the section at [1124] to [1152]. I also do not agree that the point made about burden of proof by reference to [771] of the Judgment has any real prospects of success. It fails to engage with the analysis of Ukrainian law (and English law too) at [948] to [953] of the Judgment.

As to Ground 4B the essence of the complaint is that I was wrong to conclude that harm was sustained by the Bank at the time of the Relevant Drawdowns. This argument has no real prospect of success. My conclusions (at [1158] of the Judgment) were based on the evidence that an electronic transfer of funds to an account with the Bank was capable of constituting harm to the transferor as a matter of Ukrainian law and that that was what happened in the present case. As I had already held, the consideration for the transfers was illusory (see the analysis in [1006] to [1026] of the Judgment).

I have difficulty in seeing what Ground 4C adds to the remainder of Mr Bogolyubov’s arguments on harm, or why there is said to be an arguable case on inconsistency between different parts of the Judgment. The reasoning said to underpin this criticism was not developed in oral submissions and as currently formulated I do not see that it has a real prospect of success.

Ground 4D challenges my decision to use the Bank’s methodology for analysing full compensation. As is recognised in this ground, my reasons for doing so are summarised in [1532] of the Judgment, but that summary has to be considered in conjunction with the other parts of the Judgment in which I explained Mr Thompson’s general approach as compared to Mr Davidson (e.g., [307] to [310], [381], [392ff] of the Judgment, and more specifically by reference to the Bank’s entitlement to full compensation ([952] of the Judgment)). In my view this Ground of Appeal seeks to challenge an evaluative assessment on which I was entitled to reach the conclusion that I did. I do not think that it has a real prospect of success.

For these reasons I refuse Mr Bogolyubov’s application for permission to appeal.