Russian property dispute can be heard in local courts

Tuesday 23 May 2023

Guernsey’s Royal Court has found exceptional circumstances that will allow the hearing of civil litigation involving defendants outside of the islands’ jurisdiction, in a case where a developer is seeking over $100m in damages from local, Russian, and Cypriot firms tied up in war sanctions.

Deputy-Bailiff Jessica Roland granted the plaintiff, Stanislav Gromov, leave to serve summonses to two of the respondents which are not registered in Guernsey after being persuaded by his lawyers over concerns that some of his claims are several years old.

The three defendants in the case are Rose Group Ltd (formerly RGI International), VEB.RF (formerly Vnesheconombank), and RGI Residential Holdings Ltd.

Mr Gromov alleges that the parties acted to conspire against him to remove his indirect shareholding in a separate company over a period of several years.

The Moscow Post reported in 2016 that Mr Gromov was locked in a dispute with the defendants over plans to build an elite residential complex in Khilkov Lane, Moscow.

The application was made via rule nine of the Royal Court Civil Rules, 2007.

Mr Gromov’s lawyers successfully argued that the four legal tests had been met, including that the foreign co-defendants were necessary and proper parties for proceedings and that Guernsey is the appropriate forum to resolve the dispute.

Simultaneous proceedings brought expeditiously against all three parties in Guernsey would be desirable, they added.

An application for Rose Group was previously granted in February. The Guernsey Registry states that the firm was added to the strike off list on 23 December 2023.

Opencorporates states that the firm is “engaged in the development and management of high-end prime location office, retail and residential properties in Central Moscow (Russia) and the surrounding areas. The company was established by Boris Kuzinez in 2006 and conducts business from its registered head office which is strategically located in St. Peter Port, Guernsey”. 

Sanctions were imposed on Rose Group following the Russian annexation of Crimea in 2014 as the firm is linked to VEB.RF – a Russian state development company which finances hundreds of major construction projects.

In February 2022 following the Russian invasion of Ukraine, The United States and its allies ordered maximum restrictions on VEB.RF, including a total asset freeze and disconnected it from the SWIFT payment system.