A sanctioned Kremlin-owned firm has had its application for an appeal rejected by the Supreme Court which was satisfied its legal tactics were an abuse of process.
At the centre of the case, which has been before the High Court and the Court of Appeal, are 37 aircraft – 36 of which are stuck in Russia – collectively valued at more than €1.85 billion.
Joint Stock Company (JSC), which sought a Supreme Court appeal, was among the Russian Federation-linked firms affected by EU sanctions imposed after Russia invaded Ukraine in February 2022.
JSC, which leases aircraft and ships to commercial operators, did not participate in the High Court case brought by the liquidators of its two Irish-based subsidiaries: GTLK Europe DAC and GTLK Europe Capital DAC.
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The High Court granted the liquidators an order declaring that pledge agreements between JSC and GTLK were “voidable”. The agreements, allegedly struck two weeks before JSC was hit by EU sanctions, purported to grant JSC charges over the aircraft on foot of advances it alleged it made to GTLK.
GTLK liquidators Julian Moroney and Damien Murran, of Teneo, do not expect to recover the aircraft from Russia, but are deploying the High Court declaration as part of their claims in courts in Ireland and England against the aircraft insurers.
Having not appeared before the High Court, JSC sought to appeal the order.
The Court of Appeal held that JSC had failed to demonstrate that it had failed to appear in the High Court due to inadvertence or circumstances beyond its control. The court found the non-appearance was a “deliberate decision, taken for tactical reasons” to pursue a case before the Russian courts to block the liquidators from proceeding in the Irish courts.
JSC’s attempt to appeal was an abuse of process, the court ruled.
In turning to the Supreme Court, JSC claimed an issue of “general public importance” arose in the case. It submitted that failure to appear before a lower court cannot preclude an appeal, as a right of appeal is central to the administration of justice.
The company maintains that its failure to appear in the High Court was due to difficulties securing legal representation
The liquidators contested the appeal application, submitting JSC is Russia’s largest transport business and is well-resourced, which undermines its claim that its non-appearance was beyond its control.
A panel of three Supreme Court judges said the Court of Appeal followed well-established principles in holding that JSC’s tactics were an abuse of process.
The interests of justice do not require an appeal, said Mr Justice Peter Charleton, Mr Justice Maurice Collins and Ms Justice Aileen Donnelly.
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