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

First, considerable attention was paid by the Banks to a memorandum entitled “The Future of EuroChem”. It was co-written by a number of senior managers, including Mr Hechler (who, however, maintained in evidence that he had limited involvement and remembered very little about it). It was undated, but it was circulated by an email of 14 March 2022 to a number of others within the group, notably board members including the then-CEO, Mr Rashevsky.

The Future of EuroChem memorandum proposed dividing the group into three clusters, each with independent management and ownership, but with internal agreements to preserve existing synergies so far as possible. The three clusters proposed were: (i) a Russian/CIS cluster, based in Moscow; (ii) an international business cluster, based in Switzerland; and (iii) an international trading cluster, which could be based in various possible locations where there were no sanctions affecting business with Russia, including the UAE. The international trading cluster would enable the Russian cluster and the international business cluster to do business with each other, via the intermediary trading companies in this third cluster.

The document deprecated the fact that sanctions had been imposed (repeatedly referring to them as “nonsense”). It referred to the need to preserve and realise value for “the historic owner”, while recognising that business continuation would be “in the form timing and shape as per shareholder’s desires”. It ended stating that the senior management team had a duty to oppose the value-destruction resulting from sanctions, “… jointly with the Shareholders”. Mr Hechler was ambivalent as to whether these were references to Mr Melnichenko – he initially accepted this, at least in relation to “the historic owner”, then changed his mind. However, I have no doubt that they did indeed relate to Mr Melnichenko. Those writing the document intended to appeal to him, through Mr Rashevsky.

Mr Rashevsky responded to the email that sent him the Future of EuroChem memorandum, by an email saying that the memorandum would be discussed with the Chairman (Mr Brikho) and “representatives of shareholders”. There was no disclosure of such discussions, however, and Mr Hechler said he did not know what, if anything, had come of the proposals in the memorandum.

I find this remarkable. Even if the changes being proposed had not been adopted in any form, they must at least have been discussed, both at board level (as Mr Hechler accepted) and with “representatives of shareholders” (as Mr Rashevsky had promised). However, they were adopted, at least in large measure. This means that the discussions must have been extensive and detailed. In all the circumstances, it is both surprising and disappointing that no disclosure has been forthcoming; in particular, as regards discussions with the “shareholders” or their “representatives”. Identifying the relevant individuals who took part in these discussions, and assessing their capacity to influence decision-making, would have gone to the heart of some of the fundamental issues in the case.