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

Before March 2022, numerous sources, both within the EuroChem group and outside it, referred to Mr Melnichenko as if he were the shareholder or beneficial owner of the group. Many of these utterances were informal and unofficial in nature, and I pay them no regard. However, it is of some interest that EuroChem AG’s 2019 Annual Report referred to Mr Melnichenko as EuroChem AG’s “beneficiary shareholder”, noting that he “is actively involved in the business”. The 2020 Annual Report referred to Mr Melnichenko as “the beneficiary…of EuroChem Group”. The 2021 Annual Report described him as being “the ultimate beneficial owner” prior to his resignation.

Of more significance is an email chain from January 2022 relating to the EuroChem group budget. The budget was a long document (certainly well over 100 pages) and was shared with Mr Melnichenko, who evidently read it carefully and then provided a long and very detailed set of comments. This is of interest, not only because it demonstrates the great attention being paid by Mr Melnichenko and his confidence that others would take account of his views, but also because of the reaction of one of the recipients, Mr Vasiliev. He sent a humorous message to various colleagues, telling them that, this year, “the Shareholder’s questions about the budget are not 69, but only 50 (so far)!... this may indicate a 38% improvement in the quality of budget preparation!” It is clear from this that such interventions by Mr Melnichenko were a regular occurrence, indeed they were expected; and that significance was attached to them because he was regarded by EuroChem’s managers as (in Mr Vasiliev’s phrase) “the Shareholder”.

Similarly, a separate email chain from January 2022 related to the minutes of a recent meeting of the EuroChem strategy committee. It included detailed comments from Mr Melnichenko on group strategy specific to EuroChem NW2 and the new Kingisepp plant. Mr Melnichenko stated that, in his view, the strategy committee had missed the main point, explaining precisely why and concluding “I cannot agree”. He sent these comments to the main board of EuroChem AG, who then pondered how to proceed “taking into account AIM’s comments below”. Mr Melnichenko was again referred to as the “Shareholder”.

Again, on 6 March 2022, Mr Shiryaev (then the General Manager of MCC EuroChem) sent Mr Melnichenko an email with detailed calculations relevant to the return on investment on ammonia production. Mr Melnichenko responded on the following day in withering terms (“gibberish”) and insisted that the calculation be re-done.

Such interventions demonstrate that, immediately prior to Mr Melnichenko’s designation, he was actively involved in the EuroChem group business at a granular level, and that he fully expected people to do as he said – which they did. In both respects, they are characteristic of the conduct of a hands-on owner, someone who was (as Mr Beloborodov accepted) “right at the top”.

They all went way beyond anything that might be expected, or accepted, from a mere non-executive director with no ownership interest. In his evidence, Mr Noble was taken to these examples and said he saw no issue, given that Mr Melnichenko was a director. I thought this reflected very badly on Mr Noble.

This makes it necessary to consider how matters altered, after March 2022, given the structural changes that I have summarised above. Before coming back to this, it is first convenient to address at this point the issues that arose regarding the date of Mr Melnichenko’s retirement as discretionary beneficiary under the Firstline Trust, and the relationship between Mr Melnichenko and Mrs Melnichenko.