CL-2022-000456 - [2025] EWHC 1938 (Comm)

The Banks have in fact applied for licences, as set out in Sections XXXVIII and XXXIX above – so far, to no avail. The Claimants’ pleaded case included complaints that the applications to the DGT and the CSF for licences were insufficiently neutral, but I am not conscious of any inaccuracies or any significant omissions.

In any event, the only provision of Regulation 269 under which the Claimants felt able to say a licence might be granted was Article 6e(1a). This permits NCAs to make funds or economic resources available, if “necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers.” The funds in this case are not necessary for the purchase, import or transport of fertilisers and the Claimants do not propose to use them for any of these purposes, if the Bonds were unfrozen. The Banks and Tecnimont express concern that their use would be uncontrolled and might simply benefit Mr Melnichenko. The Claimants have consistently denied this, but even on their case such funds would be used in relation to the financing of the construction of the new Kingisepp plant. That is not a purpose within Article 6e(1a).

Furthermore, it is apparent that EuroChem NW2 does not need the Bonds in order to complete the construction of the plant. Mr Beloborodov’s evidence was that the project will be completed, with or without the Banks’ money, in time to start operating in 2026. Accordingly, there is no basis for a licence to be granted under Article 6e(1a) of Regulation 269.

In a similar vein, the Claimants said that the proceeds of the Bonds could be paid into a frozen bank account, pursuant to Article 7(2) of Regulation 269. This would only help in relation Article 2(2); it has no bearing on the freezing of the Bonds under Article 2(1). Furthermore, my understanding is that EuroChem NW2 does not have a bank account in the EU or even in Switzerland (i.e., one that is or can be frozen). The Banks were not obliged to open new frozen bank accounts for EuroChem NW2 (or EuroChem AG), in order to make payment under the Bonds pursuant to Article 7.