On judgment of the High Court of England & Wales

27 March 2019

27 March 2019

A judge ruled today that the High Court of England & Wales has jurisdiction to consider the claims of Alexander Tugushev against Vitaly Orlov.  A spokesman for Mr Orlov said:

“The judgment of Mrs Justice Carr is not in any way an assessment of the merits of Mr Orlov’s defence.  The judgment is merely a procedural finding as to whether or not the English court has jurisdiction.  Mr Orlov’s substantive position has yet to be considered.

A challenge to the jurisdiction of England & Wales was made by Vitaly Orlov, the First Defendant in this matter and a Russian businessman living in Murmansk from which base he runs the Norebo Group, of which he is the founder and 100% owner.

Mr Tugushev claimed that Mr Orlov lives in England, and presented to the court unlawfully-obtained travel data from the Russian border authorities to show how much time Mr Orlov spends in England.  Based on the material before the Court, the judge held that Mr Orlov was resident in England.  However, in the whole of 2017, Mr Orlov spent only 51 days in England, and in the first seven months of 2018 (i.e. prior to the claim being made on 23 July 2018), he was only in England for just 22 days.  Mr Orlov lives in Russia, not in England.

Indeed, Norebo is a group of almost entirely Russian companies which operate a fishing business from Russia, and under Russian state fishing quotas.  The claimant, Alexander Tugushev, is also a Russian citizen, also living in Russia, and the dispute at the heart of his claim is almost entirely Russian.  The claim should properly have been resolved in Russia rather than in the London courts.

Mr Tugushev, a convicted fraudster who has recently served six years in prison in Russia, has admitted that he himself is not funding the claim.  An anonymous third party has agreed to provide extensive financial support to him, paying for Mr Tugushev’s expensive teams of lawyers, and lodging £1.5 million into court in London in order to avoid their name or names being made known.

Although this judgment is disappointing, and the claim should properly be resolved in Russia rather than in the London courts, Mr Orlov and his legal team are ready and determined to resist robustly Mr Tugushev’s entirely unfounded and unwarranted claims. Mr Orlov will also examine the possibility of an appeal, not least because he emphatically does not reside in England.  For a foreign owner of property to be considered resident in such circumstances is extraordinary.  It is a decision with the potential for wide repercussions on foreign investment in UK real estate.

Mr Orlov’s legal team also has concerns about the manner in which these proceedings have been conducted to date.  Mr Tugushev initiated his High Court claim in July 2018, in careful coordination with a campaign in Russia, having failed to make any substantive progress in other jurisdictions.  Before serving any proceedings on Mr Orlov, and without Mr Orlov’s knowledge nor representation in court, Mr Tugushev obtained an interim freezing order against Mr Orlov.

Throughout, Mr Orlov’s position has been that the freezing order was wrongfully granted and has been wrongfully sustained.  Mr Orlov intends to challenge its continuation at a hearing in June.”