Covington & Burling LLP

07/14/2020 | Press release | Distributed by Public on 07/14/2020 14:25

Covington Secures Win in High-Profile Multi-Billion Dollar UK Dispute

LONDON-Covington secured a comprehensive defense win in a multi-billion dollar dispute in the English Commercial Court between two Ukrainian businessmen and the firm's client, Mr. Oleg Mkrtchan and his related corporate entities.

Valued at $2 billion, the complex proceedings involved wide ranging accusations of fraud made by Mr. Vitaliy Gaiduk and Mr. Sergei Taruta against Mr. Mkrtchan. After an eight week trial, the judge dismissed all of the claims against Mr Mkrtchan apart from a single claim to transfer shares, which the judgment itself recognized were likely worthless.

Mr. Gaiduk claimed that Mr. Mkrtchan and Mr. Taruta lied to him about the terms on which he was bought out in 2009 from the major metals conglomerate Industrial Union of Donbass (IUD), which had previously been owned jointly by all three businessmen. Mr. Gaiduk sought damages of nearly $1 billion, which he said had been misappropriated as a result of this fraud. Mr. Taruta alleged an entirely different billion-dollar conspiracy against Mr. Mkrtchan and Mr. Gaiduk, claiming he had been deprived of assets and funds owed to him following the breakup of the three men's partnership.

The victory is noteworthy because Mr. Mkrtchan is incarcerated in Russia following a secret trial last year on charges that he has defrauded IUD's new investor, the Russian state-owned bank Vnesheconombank and was unable to give evidence in his own defense.

The Covington team was led by partners Craig Pollack and Greg Lascelles, and included London-based lawyers Eddy Eccles, Jonathan Heath and Charlotte Raynor, together with Alex Gudko from Covington's New York office. Mr. Mkrtchan's Counsel team was led by David Wolfson QC, together with Sebastian Isaac and Henry Hoskins, all of One Essex Court, plus Harris Bor of Twenty Essex.