On 29 November the Tribunal de Grande Instance of Nice, the French court of the first instance, held its first hearing in connection with the attempts undertaken by the Russian State corporation to carry out the decision of the Moscow Commercial Court against French citizen and former senator Sergei Pugachev. The Moscow court’s decision was rendered on 30 of April 2015 and declared the Sergei Pugachev’s subsidiary liability.
The Mezhprombank bank, founded by Sergei Pugachev in 1992, was declared bankrupt in 2010. By that time, however, the bank no longer belonged to Sergei Pugachev, who had left the Board of Directors some nine years earlier.
On 30 April 2015 the Moscow Commercial Court issued a ruling that declared Sergei Pugachev, as well as three of the Bank’s managers, responsible for the Bank’s liabilities amounting to over 1 billion euros.
The case was heard by a sole judge, namely I.I. Kleandrov, even though the Russian law prescribes that bankruptcy cases be heard exclusively by a panel of judges. The ruling was issued by Judge Kleandrov after a hearing of about three hours, suggesting that in the course of some 200 minutes the judge was able to analyse 342 volumes of documentary evidence and study over 200 of the Bank’s contracts, to which the representatives of the Russian Federation referred. All the rulings issued by Judge Kleandrov as a sole judge were subsequently cancelled by the Supreme Court of the Russian Federation (decision dated 19 December 2016).
On 29 November Sergei Pugachev’s counsels challenged the competence of the Russian State agency to initiate proceedings against Sergei Pugachev in France, on the grounds that the Russian Federation had failed to comply with a number of compulsory legal requirements, thereby violating French and international law.
Sergei Pugachev’s lawyers also claimed that the interests of an objective and fair trial did not allow to examine the issue of carrying out in France the decision of the Moscow Commercial Court, until the French justice was able to complete the previously initiated enquiry against the managers of the Russian State Agency, and until the arbitral tribunal comprised of distinguished international arbitrators Eduardo Zuleta-Jaramillo, Thomas Clay and Bernardo Cremades, sitting at the Hague International Court, had come to a decision on the violation by the Russian Federation of its international obligations regarding the protection of Sergei Pugachev’s investments in Russia. It should be recalled that in 2015, before any attempts were made to have the decision of the Moscow Commercial Court carried out in France, Sergei Pugachev had initiated arbitration proceedings against the Russian Federation before the Hague International Court for an amount in excess of 12 billion dollars, in connection with the expropriation of his assets in the territory of the Russian Federation and damages caused to him in other jurisdictions, including France. The arbitration court is due to issue a ruling the the course of 2019.
According to David Goldberg from the law firm White&Case, who represents the interests of the Russian Federation before the Hague International Court in the case Pugachev v Russia, “this is Pugachev’s personal dispute with Putin”.
In addition Sergei Pugachev’s lawyers stress that an attempt to have the Russian ruling recognised in France is, of itself, one more element in the grand-scale process of expropriating Pugachev’s assets, which was begun by Putin back in the late 2000s and early 2010s.
It must be said that Russia does not limit itself to strictly legal methods. In 2014 Sergei Pugachev filed a claim before the Tribunal de Grande Instance of Paris for the crimes of extortion, kidnapping and death threats, committed in the territory of the French Republic by a group of persons belonging to the leadership of the Russian State agency. The claim rests on documentary evidence and the investigation is underway, with the claim being examined by investigating judge Charlotte Bilger. After an explosive device was found under former senator Pugachev’s car, only extreme security measures provided by France’s special services have been able to guarantee the safety of Sergei Pugachev and his family.
The vice president of the Court of Nice, Hicham Melhem is expected to render his decision on 29 January 2019, after which it will become clear whether Russia is able to take part in judicial proceedings in the territory of France or whether its claims against Sergei Pugachev will be definitively rejected.
The interests of Sergei Pugachev in France are represented by the law firm De Baecque Fauré Bellec Avocats.
The interests of the Russian Federation are represented by the law firm Hogan Lovells.
The press service of Sergei Pugachev