June 2018: Dismissal of Claims in London to Set Aside USD 820 Million Arbitration Award and Freezing Orders

The firm has recently achieved a series of victories in London for our client, Raga Establishment Limited against the SCM Group, owned and controlled by the Ukrainian oligarch, Rinat Akhmetov.

Mr. Akhmetov is the richest man in Ukraine, with a net worth of over USD 4 billion. In 2013, he agreed to purchase our client’s 97% stake in “Ukrtelecom”, Ukraine’s national telecoms operator. The deal was concluded in June 2013, with the purchase to be carried out through one of Akhmetov’s holding vehicles, SCM Financial Overseas Ltd, for a price of USD 860 million, to be paid in three instalments. SCM paid the first instalment but nothing else.

By the time the firm was brought on board in the summer of 2016, the unpaid instalments had been outstanding for over a year. In addition, the purchasing SCM entity had been stripped of virtually all of its assets except for Ukrtelecom itself (which was by then in dire financial straits and would soon be subject to confiscation proceedings by the Ukrainian State). Despite the delay in bringing proceedings, we managed to secure freezing injunctions in both England and Cyprus.

In less than a year we secured an award dismissing SCM’s defenses in their entirety and awarding Raga over USD 760.6 million (the full amount owed).

Before the arbitration had even commenced, SCM was stripped bare; transferring its assets to other SCM Group companies at an undervalue and leaving the company insolvent. We brought proceedings in Cyprus against five different SCM Group companies, their directors and Mr. Akhmetov personally for conspiring to defraud Raga, and immediately obtained worldwide freezing injunctions against all of them. We also obtained attachment orders in the Netherlands preventing Mr. Akhmetov and the SCM defendants from disposing of their interest in a number of key Dutch subsidiaries, which hold the bulk of the Group’s industrial assets.

Mr. Akhmetov and SCM applied to set aside the Dutch attachments and brought proceedings in England to set aside the arbitral award. In April, the Amsterdam court dismissed SCM’s application to set aside the Dutch attachments. In the process, it noted that SCM had failed to provide any adequate explanation for what clearly appeared to be a series of non-arm’s length transactions. Then, in May, the English court rejected SCM’s application to set aside the arbitral award. The next step is to continue the pursuit of our claims in Cyprus against the SCM Group and Mr. Akhmetov personally