30 Oct 2013

Stephenson Harwood wins Fiona Trust ' Trial of the decade' case


Today, the eight year dispute between Mr Dmitry Skarga and Sovcomflot – the Fiona Trust case – has been brought to an end by the Supreme Court's decision refusing Sovcomflot permission to appeal. This follows the previous victories by Stephenson Harwood LLP, representing Mr Skarga, in December 2010 when the original claim against Mr Skarga was dismissed by Andrew Smith J and in March 2013, when the Court of Appeal dismissed Sovcomflot's limited appeal.

The Supreme Court has now refused Sovcomflot's application for permission to appeal because "the application does not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time bearing in mind that the case has already been the subject of judicial decision and reviewed on appeal." The Supreme Court ordered Sovcomflot to pay Mr Skarga's costs of the application for permission to appeal (Sovcomflot having already been ordered to pay Mr Skarga's costs of the original trial and Court of Appeal). This decision finally brings a close to the case, which The Times labelled as “the shipping trial of the century” and TradeWinds as the “trial of the decade”.

Commenting on the outcome of the appeal, Louis Flannery, partner in the litigation group at law firm Stephenson Harwood LLP, said: "Today the right party has won justice – during this legal battle, Mr Skarga has had to suffer an imposed exile, a bitterly fought (and ultimately unsuccessful) extradition request, unlawful hacking into his bank and email accounts and seizure of all his assets, whilst being separated from his wife and children. Only today can he rest assured that the fabricated claims against him will finally dissipate."

Throughout this case, Stephenson Harwood LLP acted for two of the defendants, Dmitry Skarga and Tagir Izmaylov. Mr Skarga was Director General of the Russian state-owned shipping monolith Sovcomflot between 2000 and 2004, while Mr Izmaylov was President of its sister company Novoship between 2001 and 2005.

Sovcomflot and Novoship were among the largest Russian operators of tankers and other commercial ships. The Claimants (in excess of 75 companies), including Sovcomflot and Novoship brought proceedings in the Commercial Court alleging, inter alia that Mr Skarga and Mr Izmaylov conspired to defraud Sovcomflot and Novoship respectively by a series of unlawful and uncommercial shipping and banking transactions because they were bribed to do so by another defendant, Mr Nikitin (not represented by Stephenson Harwood LLP).

The trial of the claims against both Mr Skarga and Mr Izmaylov involved claims of over US$1billion and consideration of over 100 transactions over a number of years. Allegations were made of a political persecution in Russia, with illegal evidence gathering including the misuse of private investigators, coercion of witnesses and concoction of evidence. Many of the witnesses against both Mr Skarga and Mr Izmaylov were found to have been untruthful. The Judge’s conclusion that as a matter of Russian law neither Mr Skarga nor Mr Izmaylov were bribed was upheld by the Court of Appeal and the Appellants have now been refused permission to appeal by the Supreme Court.



Louis Flannery

Louis Flannery

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Andrew Rieley
Head of communications

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