CL-2022-000558 - [2025] EWHC 1995 (Comm)

The second application before me today is the Claimant’s Amendment Application.

In this regard, on 30 June 2025, the Claimant provided their draft 2RAPOC to the parties, seeking their consent to propose amendments. Given the limited time available before this CMC1, the Claimant issued an application notice dated 1 July 2025. Whilst the First and Second Defendants noted the late timing of the application, it has been possible for the First and Second Defendants to consider the application.

The only remaining dispute between the Claimant and the First and Second Defendants (the Third Defendant, Crispian, does not oppose the application in substance) is over the proposed addition of eight words in one of the paragraphs that has been amended, namely para.42.3 of the 2RAPOC:

“42.3, PSL is an intermediary engaged in supplying goods to the NN Group. It is controlled by Mr Rodov (either with Mr Nafikov or by himself) and has established a track record of substantially overcharging the NN Group, which it is to be inferred is continuing. In particular, KPMG identified PSL as over-charging the NN Group for goods by margins of over 70%, while an internal NN investigation revealed ten separate instances in which PSL had overcharged the NN Group by margins of up to 49% (generating potential losses to the NN Group between RUB 821 million and RUB 1.173 billion (c. USD 13.66 million to USD 19 million)). It is inferred that the reason why PSL services have not yet been discontinued is because of Mr Rodov’s and/or Mr Nafikov’s close ties to Mr Batekhin and Mr Potanin.”

(emphasis added)

The words which are objected to are the words, “which it is to be inferred is continuing”. I emphasise the closing words of para.42.3 for the reasons further addressed below. It is, in my judgment, clearly in the interest of the overriding objective, for me to grasp the nettle and determine this narrow issue at the CMC so that further directions can be given to finalise the statements of case.

In deciding whether to grant permission pursuant to CPR 17.1(2)(b), the overriding objective is of central importance. In general:

“[p]arties should be allowed to amend their statements of case to bring forward intelligible and apparently credible claims or defences where the balance of injustice to the applicant if the amendment is refused outweighs the injustice to the other party and to litigants in general if the amendment is permitted” (see Essex CC v UBB Waste (Essex) Limited [2019] EWHC 819 TCC at [11]).

As identified in Município De Mariana & Ors v BHP Group (UK) Ltd & Anor [2024] EWHC 23 (TCC) at [16], the relevant facts to consider include:

In short, the Claimant submits that: (1) the amendment is straightforward; (2) it arises out of the same facts already pleaded; (3) it has been brought at an early stage before the DRD is finalised; and, (4) it will allow the full extent of Rusal’s case to be properly and fairly tried. It is further submitted that there will be no prejudice to the First and Second Defendants, who will be entitled to the costs of and occasioned by the amendment, in terms of pleading back to it. in the usual way. Reference is made to the terms of the existing pleading, in particular at paragraphs 2 and 105, to which I will return, as well as the amendments to which consent has been given, including paragraph 49.6.

For their part, the First and Second Defendants object to the amendment on the basis that it is said that the Claimant is seeking to expand its case in relation to the alleged Diversion Scheme with a bare assertion, without particularising the inference that PSL, a company that supplies goods to the NN Group, had a “track record of substantially overcharging the NN Group, which it is to be inferred is continuing” (emphasis added). It is said that the purpose of the existing plea in that regard, at paragraph 42.3, is in the context of the circumstances in which funds were received by Mr Rodov, and that it certainly, as previously pleaded, was not an independent plea in relation to substantial overcharging on a continuing basis.

In this regard, I was also referred to Issue 21 in the list of issues in relation to that aspect of the pleading where it is said “whether the purchase price paid by Mr Aleksandrovich for LC was provided by Mr Rodov from funds diverted from the NN Group.”

I have already identified why I consider it appropriate to deal with the amendment application at this CMC. I do not consider it would be appropriate simply to grant the other amendments and leave the contentious issue over to another hearing. Even if there is a need for further particularity of the objected paragraph, I consider that it is important on a case management conference to progress matters as much as possible, including seeking to ensure that statements of case are finalised and all associated issues are crystallised at this time or as soon as possible thereafter, and without the possibility of there being satellite applications and further costs being incurred in that regard.

I am satisfied that the amendment makes clear that the Claimant is advancing a case that it is to be inferred that the alleged overcharging is continuing and that the Claimant is kept out of information. On a careful examination of the pleadings, there are existing pleadings which are in the same territory and allege that the Diversion Scheme is continuing, including in relation to the diversion of cash flows and profits from the NN Group.

This can be seen from the closing words of pargraph.42.3, which I have already emphasised. In addition, and importantly, what is pleaded at paragraph 2 of the RAPOC is as follows:

“The first category of breaches involves a dishonest scheme (the “Diversion Scheme”) on the part of Mr Potanin and Whiteleave to divert strategic business units out of the control of NN and into the control of third parties connected to them. The aim of this scheme is twofold: to divert assets, cashflows and profits out of NN into the hands of Mr Potanin and/or his associates or nominees; and to divest NN of business functions that are critical to its operation, making NN dependent on Mr Potanin’s continued goodwill and cooperation for the continued supply of those functions.”

(emphasis added)

The existing plea at paragraph 105 provides as follows:

“Further, or alternatively, it is to be inferred that the Diversion Scheme, and/or other instances of Mr Potanin and Whiteleave procuring or allowing NN Group companies to enter into transactions with Mr Potanin (or related parties of Mr Potanin and/or Whiteleave), for the benefit of Mr Potanin (or his and/or Whiteleave’s related parties) and to the detriment of NN and its shareholders as a whole, are continuing in breach of Mr Potanin’s duties under clause 3.14 and will continue until restrained by order of the Court. This is to be inferred from:

105.1.

Mr Potanin and Whiteleave’s conduct as set out above in this section E; and

105.2.

Mr Potanin and Whiteleave’s conduct as set out below in sections F and G; which reflect conduct spanning almost a decade.”

(emphasis added)

It will be seen that at paragraph 105 there are existing allegations of continuing breach which are to be inferred from, amongst other matters, Mr Potanin and Mr Whiteleave’s conduct, as set out above in this section. Section E is the section which begins at paragraph 36 headed, “The Diversion Scheme.” Therefore, even on the existing pleadings, including paragraph 42.3 and the reference which is pleaded to an established track record of substantial overcharging the NN Group, there is already an allegation of ongoing overcharging by PSL.

I do not consider that such plea, properly construed, is limited simply to particularity under paragraph 42.3 of the source of funds in relation to what is pleaded at paragraph 42. In any event, even if that was the case previously, the new amendments are concerned generally with the diversion of cash flow and profits from NN, and all the amendments – bar that which is now being addressed – have been consented to by the First and Second Defendants. That includes substantive amendments at paragraph 49.6.

Those give particulars in which it is alleged that PSL has been and is overcharging the NN Group:

“In particular, NN Group has suffered from a pattern of conduct in which LC (in common with other companies controlled by Mr Rodov, Mr Trofimov and/or Mr Nafikov, such as PSL, TKLC and it is to be inferred Zavod Vostok STAL JSC (“ZVS”)) have been permitted to charge excessive profit margins and/or insert themselves unnecessarily into NN Group supply chains resulting in significant gross profit margins for those companies. In addition to the particular contract/transactions pleaded above, this pattern is evidenced by and to be inferred from following matters…”

Then, in the sub-paragraphs that follow, those include para.(b) which relates to what appears to be on its face a current relationship, and in (c) in relation to revenue which, again, appears to be current revenue, both of which, therefore, are in the context of ongoing relationships and ongoing revenue.

In addition, it is clear that the whole purpose of the amendments as a whole relates to the question of diversion of cash flow and profits from NN. That can be seen from those paragraphs which are amended and which are consented to and which lead up to the pleadings that I have already quoted at paragraph 105. Those include paragraph 102, where it said that:

“Further, in the above premises, each such sale and/or the overcharging by and diversion of funds to companies controlled by Mr Rodov, Mr Trofimov Mr Nafikov and/or Mr Alexandrov…”

(emphasis added)

The words that are in bold and underlined are words added by the latest amendments and to which consent has been given by the First and Second Defendants. Equally in paragraph 103, it is pleaded:

“Further, alternatively in the above premises, each such sale and/or the overcharging and diversion of funds cause loss and damage to Rusal…”

(emphasis added)

The words in bold and underline are amendments, and the latest amendments to which the First and Second Defendants have given their consent.

In such circumstances, I consider it appropriate to grant permission to make the amendment in paragraph 42.3, which is part and parcel of the package of amendments which is being made for the reasons which I have identified, and which I am satisfied Rusal is entitled to advance at trial. I also consider that it is better to have, on the face of the pleadings, that which the Claimant will be saying needs to be inferred at trial, in circumstances where by one route or another, and in all likelihood, it would be possible for Rusal to make that inference at trial. Far better for that to be spelled out, and the basis on which it is to be inferred particularised.

That leads me on to two further matters. The first is that I do consider that the words, “which it is to be inferred is continuing,” are lacking in particularity. I was urged on behalf of the First and Second Defendants that that is a reason why I should, as it were, adjourn the application pending receipt of further particulars. I consider, however, that such an approach would simply lead to further cost and expense as well as delay, and amount to a failure to case manage matters so far as possible on the CMC.

I consider that the more appropriate course, is to order that, effectively, further and better particulars, in the form of further information, giving full particulars of the basis on which it is said it is to be inferred that this is continuing. Whilst Mr Pillow KC, on behalf of Rusal, did not accept that further particularisation was required, he indicated that Rusal did not object to providing further particularisation if the Court considered it both appropriate and necessary for his clients to do so. I do consider that it is appropriate and necessary to do so and therefore direct that such further information is provided within 28 days.

The second matter that I would draw attention to is that one of the concerns of the Second and Third Defendants is a concern that, by reference to what is a generalised plea of an inference of continuing overcharging, that the Claimants could seek to hang a hook on that to seek extensive disclosure that they might not otherwise be entitled to, which the First and Second Defendants would characterise as a “fishing expedition” which could lead to the incurring of substantial costs and wide-ranging disclosure.

I have some sympathy with the concerns of the First and Second Defendants that disclosure should, at all stages, be proportionate and relate to those matters which are necessary for the fair resolution of the dispute which is, of course, trite. In this regard, and simply because a matter is pleaded, does not necessarily give rise to a disclosure issue and does not necessarily circumscribe the scope of any searches that have to follow, depending, of course, on the form of disclosure that is ordered at the next CMC.

Mr Pillow KC was not willing, for understandable reasons, to commit himself to the question of disclosure, not least in the circumstances where he said he had not yet put his mind to it, but I suspect that Mr Pillow KC will rely on other paragraphs of the existing pleading which may carry with them certain disclosure obligations. For my part, I would simply put a marker down that it is certainly not my intention by granting permission, to add the words, “which it is to be inferred is continuing,” to give a green light to any particular scope of disclosure.

What will be the appropriate scope of disclosure will be a matter for the judge hearing CMC2, based on the entirety of the statements of case. On one view, and having regard to the existing paragraphs of the pleading, which I have quoted, and the additional paragraphs of the pleading which the First and Second Defendants have consented to, many aspects of disclosure may already have been encapsulated in the list of issues and, indeed, in the issues for disclosure to the extent that they have so far been addressed. It may or may not be the case that the additional words add anything to that. That is not a matter for today, but for the second CMC and the judge hearing that.

Accordingly, and for those reasons, I grant permission to amend the Re-Amended Particulars of Claim in the form of the draft which is before me on the usual basis, which is that the costs of and occasioned by the amendments be those of the Defendants in any event.