BL-2023-000501 - [2025] EWHC 2334 (Ch)

Mr Stein and Mr Jaffe first met in around 2000, whilst they were both working for Alfa Bank in Moscow. They remained in contact thereafter as friends until the dispute which led to the present proceedings.

Mr Stein was born in Ukraine and explains that he moved as a child to the United States of America with his family as refugees. He is a qualified New York attorney, qualifying in the 1990s and initially working for more than one firm, before leaving the law to join OJSC Alfa Bank as an investment banker. He was later engaged by the owners of the business that was to become Eurasian Natural Resources Corporation plc (“ENRC”), and successfully pursued proceedings in the Commercial Court against the founders of ENRC in relation to a success fee which had been agreed but not paid to him.

Mr Jaffe left the Soviet Union as a political refugee in 1989, also moving to the United States. He subsequently worked in various roles in private equity and investment banking. In 2001, he founded Salford Capital Partners Inc (“Salford”), a private equity firm specialising in investments in the former Soviet Union and Eastern Europe. Salford provided investment management services to Mr Berezovsky and to one of his associates, Mr Arkady (or Badri) Patarkatshivili.

From around 2004, Messrs Berezovsky and Patarkatshivili invested in a fund managed by Salford, and called the New World Value Fund (“NWVF”), whose assets were invested in Value Discovery Partners (“VDP”). VDP’s articles provided for the partnership to carry on business in relation to investments, and provided for the partnership to be terminated by 1 July 2012, with Salford to have a right to carried interest in the net investment return: see Krys v KBC Partners LP [2015] UKPC 46 at [19] (Lord Mance), an appeal from the British Virgin Islands. In early 2012, Mr Jaffe was looking to extend the partnership term, having sought finance to buy some or all of the assets himself, and not wanting to sell or distribute the assets himself at that time because he believed they were worth more than the value for which they could then be realised, and that his carried interest would be adversely affected by a realisation then. The value of VDP, or its assets, was also adversely affected by the fact that Mr Berezovsky claimed an interest in them. See Recovery Partners GP Ltd v Rukhadze [2022] EWHC 690 (Comm) at [76]–[82] (Cockerill J).

Furthermore, Mr Patarkatshivili died in 2008. Mr Jaffe subsequently fell into a dispute with his family and with a former director of Salford, Mr Irakli Rukhadze, who became aligned with the family. It was Mr Jaffe’s unchallenged evidence that, in 2012, he was already considering bringing proceedings against Mr Rukhadze and others, alleging that they had breached their fiduciary duties to two entities established after Mr Patarkatshivili’s death and intended to protect the assets in his estate in different jurisdictions. Those proceedings would later be issued by the two entities (Recover Partners GP Ltd and Revoker LLP), and result in success for the claimants on liability (see [2018] EWHC 2918 (Comm)). There was then a separate trial before Cockerill J on quantum ([2022] EWHC 690 (Comm), recently upheld on second appeal to the Supreme Court ([2025] UKSC 10). The quantum trial is of some relevance to the present dispute because the payment of USD2 million with which it is concerned was raised as an issue in that trial, and Mr Jaffe was cross examined on it.

At the time when the events in dispute in the present proceedings were taking place, in 2012, Mr Jaffe thus believed that was entitled to, and was seeking to receive, a large sum of money via his carried interest in NWVF. He indicated in evidence that he believed his interest in the claim pursued in the Revoker Proceedings to be worth close to USD100 million (and he rejected an offer to settle his claim for half that sum). In due course, that claim would be vindicated, through the Revoker Proceedings. In 2012, he was cash poor and was borrowing money from a number of different sources. That included from the USD2 million which forms the subject matter of this claim.

It was in this context that Mr Jaffe and Mr Anisimov came back into contact in May 2012, having, on Mr Jaffe’s case, not been in contact for some months following what he describes as the ‘divorce’ from Mr Patarkatshivili’s family in 2011. He had previously approached Mr Anisimov on behalf of the family to secure finance in order to litigate on the family’s behalf.

At this time, Mr Anisimov was a defendant to a claim pursued by Mr Berezovsky, in which Mr Berezovsky alleged that he had a beneficial interest in Metalloinvest and in OAO Russkiy Alyuminiy, an aluminium company operating in Russia. In the event, Mr Berezovsky discontinued that claim in October 2012, but as at June 2012 Mr Anisimov was preparing his defence to it.

Mr Jaffe’s position on the various issues discussed between him and Mr Anisimov before Mr Stein became involved is explained in his first witness statement in the following terms:

I would at this point note that the claimant challenges in particular the suggestion that, once he became involved, these separate projects were regarded by Mr Anisimov as ‘separate streams of one larger project’. It is the claimant’s position that Mr Anisimov’s interest was only in defending the claim then pursued against him by Mr Berezovsky and not in becoming more involved in the dispute between Mr Jaffe and the Family, including by agreeing to buy out Mr Berezovsky’s share in NWVF.