Mishcon de Reya client Petraco Oil Company SA ("Petraco") has been successful in enforcing a cross-undertaking in damages arising under a Worldwide Freezing Order, following judgment having been handed down in a long running dispute which started in 2019. Petraco was similarly successful in defending a Part 20 counterclaim on the same facts.
The case arose from an injunction which was granted in May 2019 to VTB Commodities (now ABFA Commodities Trading) against its contractual counterparty, JSC Antipinsky Refinery ("Antipinsky Refinery"), forbidding delivery of a cargo of High Sulphur Vacuum Gasoil ("VGO") to Petraco, then on board a floating storage facility.
Petraco applied to intervene in the proceedings between VTB Commodities and Antipinsky Refinery, contending that it was entitled to delivery of the cargo of VGO. Petraco further alleged that the cargo injunction should not have been granted and that it had caused Petraco loss. As is standard in the granting of a Worldwide Freezing Order, VTB Commodities had provided a cross-undertaking in damages as a condition for obtaining the relevant relief, and were also required by the Court to fortify that cross-undertaking by paying a sum equivalent to the value of the cargo plus a sum for costs to be held to the order of the Court. VTB Commodities also served a Part 20 claim in response to Petraco's claim, seeking damages by reference to Russian law, from Petraco.
In the intervening period, Antipinsky Refinery has since been declared insolvent and has not played any active part in the proceedings. Sanctions imposed following the Russian invasion of Ukraine also resulted in earlier adjournments of the trial.
The trial, which took place in November 2023 for three weeks, dealt with issues of bad faith under the Russian civil code, and the enforcement of a cross-undertaking in damages. Petraco was held by the Court to be entitled to enforce its undertaking in damages provided by VTB Commodities for the value of the cargoes and its loss of profits. VTB Commodities' counterclaim under Part 20 of the CPR was further held to have failed.
Oliver Felton and Louis Flannery KC led the Mishcon de Reya team supported by Associates Callum Close and Charlie Wright, and Trainee Solicitor Rhiannon Lee.