## Facts

- VTB Capital plc, an English bank, entered a 23 Nov. 2007 facility agreement with Russagroprom LLC (RAP), a Russian company, advancing about US\$225 million.
- The loan funded RAP’s purchase of Russian dairy businesses from Nutritek International Corp., a BVI company; payments were routed through London accounts.
- VTB alleged it was induced by fraudulent misrepresentations that (i) RAP and Nutritek were not under common control and (ii) the purchased businesses were worth far more than their true value.
- RAP defaulted in Nov. 2008 and became insolvent; VTB alleged the security was worth only about US\$32–40 million.
- VTB sued Nutritek, related Marshall entities, and Konstantin Malofeev (alleged controller) in England for deceit and unlawful means conspiracy and obtained permission to serve out of the jurisdiction.
- VTB sought to amend its pleadings to add contract claims by piercing RAP’s corporate veil to treat the respondents as parties to the facility agreement.
- The High Court set aside service out, held England was not the proper forum, refused the amendment, and discharged a worldwide freezing order against Malofeev; the Court of Appeal affirmed.

## Issues

1. Whether England or Russia was the clearly more appropriate forum for the deceit and conspiracy claims under forum non conveniens principles.
2. Whether English or Russian law governed the alleged torts under the Private International Law (Miscellaneous Provisions) Act 1995 (ss. 11–12).
3. Whether corporate veil piercing could be used to treat RAP’s alleged controllers as parties to RAP’s contract with VTB, enabling contractual claims against them.
4. Whether the worldwide freezing order should remain if England was not the appropriate forum.

## Decision

- The Supreme Court dismissed the appeal (majority on forum).
- Russia was the clearly more appropriate forum for the tort claims; the non-exclusive English jurisdiction clause in the facility agreement was only one factor and not decisive for tort claims.
- Although the courts below erred in aspects of the governing-law analysis for the torts, correcting those errors did not justify England as the forum and did not change the forum outcome.
- Unanimously, the Court refused permission to amend: veil piercing could not be used to “add” controllers as contracting parties to RAP’s agreement with VTB.
- The worldwide freezing order against Malofeev was discharged given the lack of an appropriate English forum for trial.

## Legal Principles

- In forum non conveniens analysis, the defendant must show another forum is clearly or distinctly more appropriate, assessed by connecting factors (parties, witnesses, location of events and assets, and applicable law), and the claimant must show justice nonetheless requires an English trial.
- A non-exclusive jurisdiction clause in a contract does not, by itself, make England the natural forum for related tort claims, especially where the dispute’s factual center is abroad.
- Under the Private International Law (Miscellaneous Provisions) Act 1995, tort governing law is generally tied to where the events constituting the tort occur, subject to displacement if another country has a substantially more significant relationship.
- Corporate veil piercing is exceptional and cannot be used to rewrite contractual privity by treating a company’s controller as an original party to the company’s contract; wrongdoing must be addressed, if at all, through other established doctrines (e.g., deceit, agency, sham).

## Conclusion

The Court required the fraud-based tort claims to be litigated in Russia and rejected an attempted veil-piercing amendment that would have imposed contractual liability by treating alleged controllers as parties to a borrower’s contract, leading to discharge of ancillary freezing relief in England.


VTB Cap. plc v. Nutritek Int’l Corp., [2013] UKSC 5 (UK)