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

On 2 December 2022, MCC EuroChem applied to the Russian Ministry of Industry and Trade for the transfer of two subsidiaries, with an apparent total value of over US$3 billion. One was LLC EuroChem North-West (“ECNW1”), a similar entity to EuroChem NW2 which owned an existing, smaller plant at Kingisepp (already operating), and which until then had been directly owned by EuroChem AG. The other was a potash plant elsewhere in Russia, which MCC EuroChem wished to acquire from another group company presently based in Cyprus. The transfer of ECNW1 was to be set off by the transfer back to EuroChem AG of the 10% shareholding that, to this point, had been held by MCC EuroChem. The transfer of the potash plant was to involve a series of set-offs of mutual claims.

The application explained in express terms that it was made as a result of sanctions, and that its main purpose was to transfer Russian assets into Russian ownership. It also stated that EuroChem AG was unable to participate fully in decision-making in respect of Russian companies. It is clear from this that the intention was to establish precisely the Russian cluster that the “Future of EuroChem” memorandum had proposed.

MCC EuroChem’s application was not disclosed by the Claimants – the Banks obtained it by other means. However, the transfer of ECNW1 to MCC EuroChem, in exchange for the 10% of EuroChem AG formerly held by MCC EuroChem, undoubtedly took place, as Mr Hechler confirmed. The application therefore must have been approved by the Russian authorities.

As well as requiring MCC Eurochem’s application to the Russian authorities, this transaction was discussed at board level within EuroChem AG, and was approved at shareholder level. None of the Claimants’ witnesses gave evidence about this (save that Mr Hechler confirmed that it must have been approved by EuroChem AG’s board). The Claimants disclosed a handful of important documents at a very late stage, as I discuss in Section XXII below.