Promsvyazbank's VIP depositors sent to Cyprus

The judge considered that it was better for them to seek compensation from the bank and Dmitry Ananyev in Russia and Cyprus, and not in London.
24.02.2020
Vedomosti
Origin source
The English court put an end to the $ 40 million dispute between Promsvyazbank (PSB) credit note holders and former bank owners brothers Dmitry and Alexei Ananyev: the court of appeal refused to reconsider its decision to refuse the right to appeal the decision of the court of first instance. "Vedomosti" got acquainted with the February court decision, its authenticity was confirmed by the defendants' defense.

The plaintiffs, two groups of PSB credit note holders, requested the High Court of London to examine their substantive claims and seize the Ananyev’s assets. The court of primary jurisdiction refused them in September 2019 due to the lack of jurisdiction of the dispute in English jurisdiction and ordered the plaintiffs to pay the defendants legal costs - 6.6 million pounds.

The February decision of the court of appeal is final, the document says: PSB lenders can now rely on consideration of their claims in other jurisdictions. This court decision is final in the dispute, said Yeghishe Jazoyan, a partner in the London office of King & Spalding, a law firm representing the interests of the three defendants: it demonstrated the bankruptcy of the plaintiffs' claims.

They are PSB customers who, in 2017, acquired credit notes from Peters International (Cayman) Ltd., an Ananyev-related company. PSB offered these securities to wealthy clients as a more profitable alternative to deposits. The notes were not on the balance sheet of the bank, but were issued under the guarantees of two companies, the Ananyevs were also beneficiaries. There were four issues of notes totaling $ 170 million and 60 million euros. Shortly after the Central Bank in December 2017 took the bank for reorganization, defaults were made on them. Some investors went to court.

The judge in September indicated that he understood the plaintiffs' intention to receive compensation for $ 40 million due to default, but the main question, in his opinion, was how much English jurisdiction was suitable for his satisfaction. The judge noted that the most obvious defendants would be PSB and Dmitry Ananyev, and jurisdictions would be Russia and Cyprus, since Dmitry Ananyev has Cyprus citizenship since June 2017. The judge also did not see the need to seize the defendants' assets, since he did not see the risks of their disappearance.

The first group of bondholders did not stop at losing in the first instance and filed two motions with the English courts with a request for permission to appeal. English justice does not automatically give the loser the right to appeal - this requires permission from the court, first with the judge in the first instance, and in case of refusal, with the court of appeal. Both PSB investors refused. In December 2019, the first group of holders appealed to the court of appeal with a motion to reconsider the decision of the court of appeal.
The plaintiffs appealed to the fact that they did not have an alternative remedy and that they would suffer real damage, the decision said. The judge considered that this was not the basis for the jurisdiction of a dispute of English jurisdiction, pointed to the “completely unfounded” petition of the plaintiffs and ordered them to pay all the expenses of the defendants on the application.

Vedomosti sent a request to Lipman Karas, representing the interests of the first group of note holders.

At the moment, none of the plaintiffs has complied with the court’s order on the payment of costs, said a representative of Alexei Ananyev: the deadline set by the court for compensation has already passed. Unfortunately, the plaintiffs did not compensate the defendants for their costs, we expect this to happen voluntarily in the near future, because the responsibility for reimbursing the costs for the plaintiffs was entrusted by an order of an English court, said a representative of Dmitry Ananyev. If this does not happen, he added, we reserve the right to resort to legal remedies.

Former PSB VIP clients didn’t stop in London: they hired the US Attorney Bad Cummins, the law firm The Law Offices of Bud Cummins, in the USA. Cummins is investigating the role of American banks, including JPMorgan Chase, Bank of New York Mellon and Citibank, in the alleged “global fraud” of the Ananyev brothers with PSB investor money. PSB lenders' money in dollars passed through a bank account in the United States before ultimately settling in Cypriot banks, Cummins said in a statement. According to her, in addition to the Ananyevs, 40 directors of various business-related companies in 27 jurisdictions around the world participated in the scheme.

In Russia, a criminal case has been opened against the Ananyevs for the embezzlement and laundering of 66 billion rubles. and $ 575 million, they are arrested in absentia. The arbitration court is considering a claim of PSB against Ananyev and the former top management of the bank for 282 billion rubles: assets of the defendants, including paintings belonging to the brothers along with the museum of the Institute of Russian Realistic Art, were seized under this lawsuit.

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