DMITRY YANISHEVSKIY v. MAXIM MOSKALEV

HCA 1840/2019

[2026] HKCFI 4953

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1840 OF 2019

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JUDGMENT

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Glossary

The following persons and entities are referred to in this Judgement and, for convenience, are abbreviated as follows:

No.	Name and aliases	Description
The Parties
1.	Dmitry Yanishevskiy / Ivanovich / DI / DY / Dima   (“Dmitry”)	·  Plaintiff (“P”) in these proceedings.  ·  Russian national ·  Mainland resident of the People’s Republic of China ·  Email: dmitry@quatra.com.cn
2.	Maxim Moskalev / MM / Ken Tucky (email) / Mio Via (email) / Leo Tolstory (email)   (“Maxim”)	·  Defendant (“D”) in these proceedings.  ·  Russian national ·  Permanent resident and citizen of the Republic of Cyprus ·  Merchant by occupation ·  Emails: ken.tucky810@gmail.com (Ken Tucky); Miovia11@gmail.com (Mio Via); Warandpeace2002@gmail.com (Leo Tolstory)
KEC and corporate entities
3.	Gold Dragon Investment Limited   (“Golden Dragon”)
4.	Komplekt Engineering Company   (“KEC”)	·  Company incorporated in Russia ·  Liquidated on 3 March 2021 ·  Translated occasionally as Complect Engineering LLC
5.	Petrochemical Solutions Limited   (“Petrochemical”)	·  Company incorporated in Hong Kong ·  Controlled through Gold Dragon and Rosewood
6.	Rosewood Commodities and Instruments Co., Limited   (“Rosewood”)	·  Company incorporated in Hong Kong
7.	Synergy Commodities Pacific Limited   (“Synergy”)	·  Company incorporated in Hong Kong ·  Sole shareholder director is Joanna Lis ·  The family company controlled and operated by Yuri Alexandrewich Lis and his wife Joanna Lis (D’s case, denied by P)
Other corporate entities
8.	Able Mass Investment Limited   (“Able Mass”)	·  P’s corporate vehicle
9.	Camelot Group Limited   (“Camelot”)	·  Russian company
10.	Drilling Machines and Engineering LLC   (“DME”)	·  Party to Fee-Based Rights Transfer Agreement No.  2/17 dated 20 October 2017 ·  Assignee of debts owed from VostokTEK LLC to Vostokbusinesstrade LLC under Agency Agreement No.1 dated 12 January 2015
11.	Evgenii Aleksandrovich Nikiforov / Independent Entrepreneur Nikiforov   (“Nikiforov”)	·  Party to Rights of Claim Transfer (Assignment) Agreement No.  0115 dated 1 December 2015 ·  Assignee of debts owed from KEC to Verta LLC under the Supply Agreement No.  12/13 (P’s case)
12.	Verta LLC   (“Verta”)	·  Party to Rights of Claim Transfer (Assignment) Agreement No.  0115 dated 1 December 2015 (P’s case) ·  Assigned debt of RUR 83,960,541.38 (owed from KEC to Verta LLC under Supply Agreement No. 12/13) to Nikiforov (P’s case)
13.	Victoria LLC   (“Victoria”)	·  Initiated liquidation proceedings against KEC
14.	Vostokbusinesstrade LLC	·  Party to Fee-Based Rights Transfer Agreement No.  2/17 dated 20 October 2017 ·  Assigned debt of RUR 38,860,964.24 (owed from VostokTEK LLC to Vostokbusinesstrade LLC under Agency Agreement No.1 dated 12 January 2015) to DME (P’s case)
15.	VostokTEK LLC	·  Owed debt of RUR 38,860,964.24 to Vostokbusinesstrade LLC under Agency Agreement No.1 dated 12 January 2015 (P’s case)
Other key individuals
16.	Andrey Dolganov Sergeevich   (“Dolganov”)	·  General Director of KEC since 11 November 2016 (words in underline added by D) ·  The Plaintiff asserts that he is part of Team Defendant
17.	Alexey Kovalenko / Alesha   (“Kovalenko”)	·  Business associate of P ·  Merchant by occupation ·  One of the 4 friends in Team Plaintiff ·  P’s factual witness
18.	Alexey Lipkin   (“Lipkin”)
19.	Anna Ivanova / Iva Nova / Anya   (“Anna”)	·  Financial director of D (P’s case, denied by D) ·  Person responsible for KEC’s accounting matters, report to P (D’s case, denied by P) ·  The Plaintiff asserts that she is part of Team Defendant ·  Email: Finanna.nova@gmail.com
20.	Bu Ning	·  Wife of Alexey Lipkin ·  Director of Rosewood until 29 October 2018
21.	Esipovich Vadim   (“Esipovich”)	·  Director of Rosewood from 29 October 2018 onwards ·  Lawyer of D in Cyprus
22.	Guseiniev Abdulla Gasanovich   (“Abdulla”)	·  registered as 10% shareholder in KEC as at 5 January 2015 ·  registered as 18.2% shareholder in KEC as at 30 January 2018 ·  The Plaintiff asserts that he is part od Team defendant
23.	Ivan Vladimirovich Marchenko	·  Merchant by occupation ·  P’s factual witness
24.	Joanna Lis	·  Wife of Yuri Alexandrewich Lis ·  Sole director and shareholder of Synergy
25.	Khibirtov Vladimir (formerly named Chemakin Vladimir Yurievich)   (“Khibirtov”)	·  registered as 45% shareholder in KEC as at 5 January 2015 ·  registered as 81.8% shareholder in KEC as at 30 January 2018 ·  The Plaintiff asserts that he is part of Team Defendant
26.	Mikhail Zhukov / Misha / Michael /米老板 (email)   (“Zhukov”)	·  Merchant by occupation ·  Business associate of P ·  Part of Team Plaintiff ·  P’s factual witness ·  Email: Milaoban2@gmail.com (米老板)
27.	Mikhail Borisov / Alexander Viatkin / Sasha	·  Manager of D (P’s case, denied by D) ·  Email: mihbor2016@gmail.com
28.	Nataliya Belova (formerly known as Nataliya Shapilova)   (“Shapilova “)	·  Former Chief Accountant of KEC and registered as 45% shareholder of KEC until 30 January 2018 ·  held her 45% shareholding for the benefit of Dmitry, Sergey Borovskiy, Alexey Kovalenko and Mikhail Zhukov ·  i.e. Team Plaintiff ·  ended her employment in KEC on or around 4 September 2017 ·  P’s factual witness
29.	Natalia Moskaleva	·  D’s wife who resides with D’s children at Flat 4, 44 Cadogan Square, London, United Kingdom
30.	Natalia Ozerova   (“Ozerova “)	·  Financial manager who worked with P ·  Accountant of Petrochemical ·  P’s factual witness
31.	Sergey Borovskiy / Xibo   (“Borovskiy”)	·  Merchant by occupation ·  Business associate of P ·  Part of Team Plaintiff ·  P’s factual witness
32.	Song Guizhen	·  Sole shareholder of Rosewood ·  Mother-in-law of Alexey Lipkin (P’s case)
33.	Svetlana Sidorova   (“Sidorova”)	·  Merchant by occupation ·  Business associate of P ·  P’s factual witness
34.	Yuri Alexandrewich Lis / Sanych / Yura / Y.L./ You Li   (“Yuri Lis “)	·  Russian national ·  Merchant by occupation ·  Friend of D ·  The Plaintiff asserts that he is part of Team Defendant ·  Director of Aspect Finance Closed Joint Stock Company ·  D’s factual witness

Overview

In summary The Trial concerned:

1.  At the start of the Year of the Dog (Chinese New Year February 2018) friends of almost 20 years fell out over money.  In the scheme of things it was not a large sum of money (about USD 4million), certainly it is not large in terms of a Hong Kong civil trial set down for 22 days and it is not large by reference to the valuable assets owned by Team Plaintiff and Team Defendant such as properties in Central London (Edwards Square, Cadogan Square, Marlowe’s Road, Belgrave Mansions), and other properties owned in Moscow (including a Dacha outside Moscow), and in Cyprus and no doubt other places as well..  As Dmitry observed in an email in 2018 “(our)..friendship ended for not too much money” See Document page 985.  But the amount at stake does not matter.  Many important cases in England and Hong Kong have resulted in the creation of good law arising out of disputes concerning small sums of money. 

2.  Dmitry, Maxim, Kovalenko, Zhukov, Borovskiy became friends when they met in Beijing as part of the Russian community there.  They all became successful in the tough oil business between China and Russia.  In 2013 they incorporated Komplekt Engineering Company (KEC)) to conduct this business (principally sourcing oil drilling equipment in China for sale to the large oil companies in Russia.)

3.  The fall out between these friends became bitter and acrimonious.  Ironically one of them, Maxim, adopted the email header “War and Peace”.  He explained he did this to avoid hackers.  But it became prophetic.  As every student of Russian literature knows there is precious little peace in Leo Tolstoy’s wonderful novel; the battles between the armies are bloody, the internecine battles between families and friends are almost as fierce.  Sadly, that has become the relationship between these former friends.  At times it even appeared that their lawyers were instructed to continue this antipathy in Court: there seemed to be little co-operation between Counsel. 

4.  All these friends invested in KEC.  Dmitry, with Team Plaintiff, owning a minority of KEC (about 45%) with each investing an equal amount giving them 11.25% of the equity.  Team Plaintiff placed their shareholding with their nominee (Shapilova).  Maxim was the major investor in KEC with 55%of the equity which is recorded in the Unified State Register of Legal Entities in Russia under the names of Abdulla and Khirbitov.  The Plaintiff asserts that these men are Maxim’s nominees.  Maxim denies this and he even denies knowing who they are. 

5.  At meetings in 2017 in London (25 June) and in Macedonia (27 July), Dmitry informed Maxim that he and Team Plaintiff wanted to exit from KEC and recover their investment.  After detailed negotiation, a memorandum (the Memorandum: Bundle D2/424) was signed by Dmitry and Maxim.  Dmitry and Maxim were the principal players: Team Plaintiff were content to leave the details to Dmitry (who they regarded as their document man) while they attended to their own, separate businesses.  Zhukov is a successful interior designer.  Borovskiy runs his own businesses from Ap Lei Chau in Hong Kong. 

6.  Disputes arose over the performance of the Memorandum which became bitter by Chinese New Year 2018.  Despite this, Dmitry and Maxim continued to negotiate in February 2018 an Addendum to the Memorandum (the Addendum) was signed.  The Addendum set out a complicated method for agreeing the price for the sale of a related business of KEC namely Telesystems.  Soon after signing the Addendum the disputes between Dmitry and Maxim continued. 

7.  The detailed facts are summarised below.  They can appear complicated because the majority of the documents are in Russian.  Often, during the course of the trial, disputes arose as to the correct translation.  All the principal witnesses gave evidence in Russian. 

8.  In this forest Russian of documents and testimony, one crucial document stands out.  It is typed in English with no translation and no amendment: the Promissory Note (PN).  It is the crucial document in this Trial.  The Plaintiff’s main cause of action depends on it.  Maxim claims that the PN is a false document which has been forged including his forged signature. 

9.  The PN first appeared in Moscow on 19^th February 2018.  The circumstances of its appearance are hotly contested:

9.1  Originally the Plaintiff claimed that the PN was given to Dmitry by Yuri Lis in Moscow on 14^th March 2018 [See Statement of Claim]. 

9.2  This claim was substantially amended to assert that Yuri Lis gave the PN, not to Dmitry, but to Kovalenko one month earlier [19^th February] [See Re Amended Statement of Claim] Yuri Lis denied this and claims no knowledge of the PN. 

9.2.1  The Plaintiff asserts that Yuri Lis acted on Maxim’s instructions as part of Team Defendant.  Both Yuri Lis and Maxim deny this. 

10.  The PN floats like a specter against this forest of Russian documents.  Given its crucial importance it is extraordinary that it is never referred to in the numerous exchanges between the parties after the date it bears (the 16^th of February 2018). 

The Issues Arising

The Pleaded Position:

In summary:

11.  The Statement of Claim originally referred to a Share Purchase Agreement and a Supplemental Agreement governed by Russian Law (to be applied according to Hong Kong Law). 

12.  The Defence refers to the same two documents as the Memorandum of Agreement and the Addendum but denies that they constituted concluded agreements arguing instead that they were merely contemplated transactions which, lacking certainty, were no more than agreements to agree. 

12.1  For convenience the Share Purchase Agreement and the Supplemental Agreement are referred to, respectively, as the Memorandum and the Addendum. 

12.2  Maxim denies that he issued the PN and he claims that his signature has been forged on the PN.  Further Maxim denies that Yuri Lis handed the PN either to Dmitry on the 14^th of March or to Kovalenko on the 19^th of February. 

13.  The principal claim of the Plaintiff is under the PN.  As an alternative claim the Plaintiff seeks relief in respect of misrepresentations made by Maxim at the time of the Memorandum and / or the Addendum.  The Plaintiff asserts that, fraudulently or alternatively recklessly, Maxim, despite his promises never intended to make full payment under either agreement. 

14.  The Defendant denies the alleged misrepresentations and further asserts that they do not constitute a reasonable cause of action. 

15.  As generally occurs the pleaded issues became more focused in Counsel’s Opening Submissions at the start of the Trial.  This is particularly important because the Plaintiff made it clear that no claims were being made in respect of breaches of the Memorandum and / the Addendum.  Having read both agreements carefully and other documents which suggest that breaches had occurred, I sought further clarification that the Memorandum and / or the Addendum did not form the basis for claims in breach of contract.  That was confirmed again by the Plaintiff at the conclusion of the evidence (See LN Day 17 page 4 line 22 where the Court sought clarification and the clear answer at the end of the same day (See LN Day 17 page 122 line 2 to page 123 line 4). 

16.  Despite this clarification the Court remained troubled that a gap in the Plaintiff’s ability to recover from Maxim would emerge if the Court decided that Maxim still owes Team Plaintiff payment while also deciding that the PN was not genuine and that Maxim’s signature, has been forged. 

17.  On the 4^th of August the Court reconvened to further consider this question (the 4^th of August Question: see Day 18 LN pages 1 to 5).  The parties were asked to consider the 4^th of August Question which they did in a Supplemental Note dated the 10^th of August and also in a Subsidiary Note (concerning the relevance of the numerous peripheral matters of credit which were raised). 

18.  The Court reconvened on the 14^th of August for Counsel to expand on their Supplemental Notes.  Counsel again confirmed that no claims were made for breach of contract in relation to the Memorandum and / or the Addendum: See Day19 LN pages 1 to 3 and pages 19 to51 and pages 69 to 71 and pages 75 to 76. 

19.  This exercise was most helpful.  It clarified the position.  Two main claims are advanced by the Plaintiff.  First for breach of the promise contained in the PN.  Second for misrepresentations (fraudulent or alternatively negligent) made by Maxim at the time of the Memorandum and / or the Addendum.  So, the Issues to be determined are:

Issue 1

Is the PN the genuine document of the Defendant setting out his promise to pay the Plaintiff?

Issue 2

Was Maxim’s signature forged on the PN?

These are the central issues in this trial.

Issue 3

Did Maxim make actionable misrepresentations (either fraudulent or negligent) to the Plaintiff inducing him to enter into the Memorandum and / the Addendum. 

20.  The parties confirmed that the central issue was whether the PN is genuine and enforceable. 

20.1  The Defendant confirmed that an earlier assertion that the Bills of Exchange Ordinance did not apply to the PN was abandoned (See the Defendants Opening: Day 1pages 120-121).  The only remaining issue relating to the PN is whether it was supported by consideration.  The Plaintiff claims that sufficient consideration is found in its forbearance when deciding to forgo any claims for breach of the Memorandum and / the Addendum and rely, instead, on breach of the PN. 

20.2  Not much time was spent on the issue whether consideration was given by the Plaintiff.  I can deal with it shortly.  The current trend is to find consideration when the parties obviously intended to deal.  I have considered the authorities relied on by the Defendant but I am not persuaded.  I find that sufficient consideration for the PN was given by the Plaintiff in forbearance when electing to concentrate on the PN rather than breaches of the Memorandum and /or the Addendum.  I reject the Defendants mild assertion that forbearance alone does not amount to sufficient consideration. 

21.  I have not spent much time on this issue because of the overriding effect of my conclusion (set out in detail below) that the PN is not a genuine document and that Maxim’s signature has been forged.  Clearly in the light of this finding no claims can be founded on the PN. 

22.  Ultimately whether the PN is genuine and whether Maxim’s signature was forged are question of credit (See Day 19/Page 3) Mr Fan for the Plaintiff said “…everything goes to credit …this is a very peculiar case …because it turns almost entirely on credit.”

23.  But it is not just the credit of the witnesses who spoke to the PN.  Equally important is an assessment of the circumstances surrounding the appearance of the PN and particularly an analysis of the terms contained in the PN. 

24.  The Claims in misrepresentation attracted far less attention at trial.  I consider them separately later in this Judgement after, first, deciding the crucial issues of the PN. 

25.  At the time of the 4^th August Question the Court asked the parties to clarify matters relating to credit which are not directly linked to the PN (See Court Letter 10^th of August).  Significant among these was whether Maxim has a current Russian passport which he used to register an apartment in the Moscow Land Registry.  At the Hearing on 14^th of August the Plaintiff confirmed that Maxims passport issue was more important than the other peripheral matters going to credit such as:

25.1  the assignment agreement of debt between of Nikifora / Verta / Victoria;

25.2  the role played by Yuri Lis in arranging for Synergy to pay Abel Mass;

25.3  Yuri Lis interest in acquiring SPL Chemie from Sidorova;

25.4  Synergy’s guarantee of Petrochemicals involvement in a Multi Party Funding agreement;

25.5  An arbitration in Moscow concerning Aspect Finance;

25.6  A routine enquiry by HSBC about the Ultimate Beneficial Owner of Rosewood. 

26.  All these matters (some of which are complicated) are peripheral to the main issue.  I do not find them particularly helpful in deciding the questions of credit relating to the PN.  None of them are connected with the issue of the PN.  In most cases they relate to events which occurred either long before the appearance of the PN (such as the Verta assignment agreement) or long after the PN (such as Maxim’s passport and the Land Register records).  But for completeness I consider them, in summary form, later this Judgement. 

Russian Law

27.  The parties now accept that I can proceed on the basis of Hong Kong Law.  The expert evidence about relevant Russian Law was not considered, and no expert evidence was called: See LN Day 17 Page 30 Line 15. 

Hong Kong Law

I therefore proceeded on the basis of Hong Kong Law.

Issue 1

Is the PN a genuine document setting out the Defendants promise to pay the Plaintiff. 

28.  The law is straightforward.  Normal principals apply when deciding whether the PN is genuine.  Essentially it is a question of the credibility of the witnesses who spoke to the document taking into account all the surrounding circumstances including the physical nature and the contents of the PN. 

29.  I made the PN Court Exhibit A at the start of the Trial. 

Issue 2

Was Maxim’s signature forged on the PN.  I was greatly assisted by the forensic witnesses who gave expert evidence about the handwriting of the contested signature.  Mr Liang for the Plaintiff.  Mr Leung for the Defendant. 

30.  As usually happens these experts produced a Joint Report which in fact agreed very little.  The Joint Report shows that the experts remain an ocean apart, as Mr Leung put it. 

31.  The Court is not bound by the evidence of handwriting experts (See Ribeiro PJ in Nina Wang …; Credit One Finance Ltd v Leung Yong Lok and Another (2020 HKCFI 2919).

Issue 3

32.  The legal principles applying to claims of fraudulent, or alternatively reckless misrepresentation are well established.  They were not controversial at trial.  In summary the relevant approach is:

33.  The Court of Appeal per Cheung JA identified the relevant features of fraud or deceit: Haifa International Finance Co Ltd v Concord Strategic Investments Ltd [2009] 4 HKLRD 29, §15 [P/#23]:

“(1) There must be a representation of fact made by words or conduct.

(2) The representation must be made with knowledge that it is or may be false.  It must be wilfully false, or at least made in the absence of any genuine belief that it is true.

(3) The representation must be made with the intention that it should be acted upon by the claimant, or by a class of persons which includes the claimant, in the manner which resulted in damage to him.

(4) It must be proved that the claimant has acted upon the false statement.

(5)  It must be proved that the claimant suffered damage by so doing.”

34.  A representation of the present state of mind can amount to a representation of fact: see Edgington v Fitzmaurice (1885) 29 Ch.D.  459 [P#24] at 483 per Bowen LJ; see also Leung Ping Shing Roger v Lee Kwok Kei (unrep., HCA 778/2007, 16 June 2011) [P#25] at [119] per Recorder Shieh SC. 

35.  When determining whether there has been an express representation, the court considers what a reasonable person would have understood from the words used in the context in which they were used: IFE Fund SA v Goldman Sachs International [2006] 2 CLC 1043 [P#26] at 1056, [50] per Toulson J.; see also Jaffray v Society of Lloyd’s [2002] EWCA Civ 1101 [P#27] at [59], [303]-[307] per Waller LJ. 

36.  When deciding where a person was induced to act upon the misrepresentation there is a presumption of fact that a statement likely to induce a representee did so.  Where the representation was made fraudulently, the presumption is stronger: see BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises Inc [2020] QB 551 [P#28] at 567B, [32], 570F, [43] per Longmore LJ: see also Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] 3 WLR 789 [P#29] at 828B-E, [156]-[157], 829C-H, [162]-[164] per Lord Leggatt.  It suffices for the defendant to have exploited an unconscious assumption of the plaintiff: at 832D-G, [175]-[176].  See also Marme Inversiones 2007 SL v NatWest Markets plc [2019] EWHC 366 (Comm) [P#31] at [303] per Picken; see also Zurich Insurance Co plc v Hayward [2017] AC 142 [P#32] at 155C, [29], 156G, [34] per Lord Clarke. 

37.  If the Plaintiff succeeds in its claims in misrepresentation the Court has already Ordered that the assessment of damages is to be adjourned for later determination (See the 2^nd Case Management Hearing). 

Approach to the Evidence

38.  The central issues in this case depend on the credibility of the witness evidence contained in their Witness Statement (standing as evidence in chief) and in their oral testimony as tested in cross examination.  Their evidence relates to events which occurred eight years ago. 

39.  It is important to note that all the witnesses of fact are Russian who gave evidence in that language.  This was then interpreted into English by the skilled (and tolerant) Court Interpreter.  Sometimes the phrases used in English did not seem the way Russian oil men would express themselves.  The email / WeChat exchanges between Maxim and Team Plaintiff following the Christmas Day message (which are set out and analyzed below) contain jokey, almost childlike phrases (such as “old buddy; boss; right hand man; favorite Chinese dumplings).  Such phrases belie the impression that the parties were at that time in bitter dispute: they seem more like the exchanges between former friends trying to find a solution to the intractable issue of Maxim’s failure to pay the balance he owed. 

39.1  Often attempts were made with the help of the Interpreter to establish the real meaning (many similes were suggested: boss could also be translated as chef, chief; more important the Russian word for share has several different meanings in English).  Inevitably some of the finer nuances in the evidence were lost in translation. 

40.  One important witness (Kovalenko) did not even have a Russian version of his Witness Statement.  This resulted in the Interpreter having to translate, into Russian, the English version of his witness statement (clearly drafted by Team Plaintiff lawyers) so as to remind him of what he was supposed to have said. 

41.  As generally happens the Witness Statements were drafted by English speaking lawyers.  The product (which is focused and concise) is approved by the witness.  Many of the Witness Statements for Team Plaintiff bear noticeable similarities of expression and format (phrases such as boss, right hand man, nominee, mere housewife are used by most of these witnesses about Maxim, Yuri Lis and his wife Joanna.)

41.1  To the extent that I found that certain witnesses were reciting the mantra of team Plaintiff (particularly witnesses who had no direct dealings Maxim or Yuri Lis and even some who had never met them such as Sidova and Ozerova) I gave their evidence less weight. 

42.  The credibility of a witness is a complicated question.  Many people tell lies.  The reasons cover a wide spectrum of human behaviour from the innocent lies of children (“fibbing” often as a game to see what they can get away with) through the “white lies” of their parents (to protect a loved one from a crueler truth) to the cynical lie of a fraudster (the bald -faced lie).

42.1  Businessmen often exaggerate, embellish and pretend in pursuit of an opportunity.  Generally, though strictly speaking “untrue”, they would be shocked to be accused of lying; they had no dishonest intention; they were simply operating as their competitors did.  I bear this in mind when assessing the fiercely contested evidence of the key witnesses when they were cross examined. 

43.  It is well recognized that a witness’s memory is fallible [See Leggatt J in Blue v Ashley [2017] EWHC 1928; See particularly Yu Man Fung Alice v Chau Sing Chi Stephen [2020] HKCFI 2923 pages 19 to 22 where Coleman J sets out a comprehensive summary of the difficulties which can arise when assessing the reliability of a witness’s memory.  The following have relevance to this case:

(1)  Memory is not a mental record fixed at the time of the experience, then fading gradually over time.  So it is a misconception that memory operates like a camera or video device making a fixed and chronological record of an experience. 

(2)  Memory can be fluid and malleable subject to a review when retrieved. 

(3)  Memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time. 

(4)  The process of civil litigation can subject the memory of a witness to bias. 

(5)  Witnesses often have a stake in a particular version of events.  This is obvious where the witness is a party or has some type of loyalty to a party to the proceedings. 

(6)  Other more subtle influences come into play in the process of preparing a witness statement to give evidence for one side in a dispute.  The natural desire to assist, or not prejudice, the party calling the witness, and the desire to give a good impression in a public forum, can be a significant, if unconscious, motivating force. 

(7)  Considerable interference with memory can arise in civil litigation during the process of preparing for trial.  A witness is asked to make a statement, often (as in this case) when a long time has already elapsed since the relevant events.  The statement is usually drafted for a witness by a lawyer who is inevitably conscious of the significance for the issues of what the witness does or does not say. 

(8)  The Witness statement is made after the witness’s memory has been ‘refreshed’ by reading documents.  Yet those documents themselves often include summaries of the case, including argumentative material, and documents not previously seen by the witness some of which came into existence after the events which the witness is being asked to recall. 

(9)  The Witness statement may go through several drafts before it is finalised.  Then years later the witness will be asked to re-read their statement and review documents again before giving evidence in court. 

(10)  An effect of this process can establish in the mind of the witness the matters recorded in their statement causing their memory of events to be based increasingly on this material rather than on their original recollection of the events. 

(11)  There is also a powerful tendency for witnesses to remember past events concerning themselves in a self-enhancing light and not uncommon for a witness to deceive themselves into what they regard to be an honest recollection but which is in fact false.

(12)  Evaluation of a witness’s evidence may, depending on the particular circumstances, also include having regard to factors such as: evasive and argumentative answers, tangential speeches avoiding the question, blaming legal advisers for pleadings, disclosure and evidence shortcomings, self-contradiction, internal inconsistency, shifting case, new evidence, and selective disclosure: see Painter v Hutchison [2007] EWHC 758 (Ch) at §3.  There may be other factors in any particular case, but this list gives important and helpful indicators to credibility. 

44.  These considerations do not mean that memory is unreliable.  Memory is generally reliable (and often the best evidence).  But it is important to realise that memory can sometimes distort the truth. 

45.  In the age of Artificial Intelligence, a Judge applies his natural intelligence (based on years of courtroom experience).  The Judge is well placed to assess a witness’s demeanor and watch how their evidence is given.  Sometimes body language can be as eloquent as words: a nervous witness fidgeting with their hands, or looking round for support from their team sitting behind them in court.  I watched closely as the witnesses gave evidence. 

46.  As a general observation I was impressed with all the witnesses, except Shapilova and, to a lesser extent, Kovalenko.  Generally, they were all polite, courteous and, apparently, keen to help.  But I was well aware that Team Plaintiff and Team Defendant had a cause to advance.  So I was careful when deciding what weight to give to what they said and how they said it.  I set out my observations below when considering the evidence. 

The Evidence Which Never Was

47.  I sensed during the trial that I was not being told the full story.  An air of mystery (sometimes even non- disclosure) hung around certain important aspects of the evidence.  The tourist shops in the main squares in Moscow and St Petersburg sell the iconic Russian doll (the Matryoshka).  Outside it seems to be a bright, smiley toy.  But concealed inside other dolls are hidden.  At times I felt like a tourist who was not shown what lurked inside Matryoshka。The Court was not told the full story hidden behind the carefully prepared evidence presented.  Examples are:

47.1  The Unified State Register of Legal Entities in Russia records that Abdulla and Kirbitov were majority shareholders in KEC who, after the Memorandum, became the only shareholders.  Yet the extraordinary thing is that none of the witnesses involved with the affairs of KEC could explain who these men are.  Team Plaintiff claimed that they were Maxim’s nominees.  Maxim claimed that they were Dmitry’s nominees. 

47.1.1  I do not accept that the witnesses did not know about Abdulla or Kirbitov.  Dmitry is careful and meticulous: he continued to take a close interest in KEC after the transfer of Team Plaintiff’s shares to Maxim.  Dmitry must have made enquires to find out who these controlling shareholders were.  But he did not tell the Court. 

47.1.2  Maxim is equally careful and meticulous.  He too must have made enquiries to find out about these two men.  But he did not tell the Court. 

47.1.3  The other investors in KEC, Dmitry’s friends in Team Plaintiff, must have made enquiries about these two men.  But they did not tell the Court. 

47.2  In 2017 Team Plaintiff wanted to withdraw from KEC and recover their initial investment.  The reason they chose to do so would have been interesting background material.  But it was never really explained. 

47.3  Maxim clearly believed he could make a success of KEC once he took full control.  Something seems to have gone wrong: he stopped making payments under the Memorandum and / or the Addendum.  There was some evidence that Maxim was experiencing cash flow problems.  He denied this: See Day 16 where Maxim claimed that he had access to substantial credit.  No proper evidence was produced setting out Maxim’s financial situation.  It would have been interesting background material. 

47.3.1  KEC, like oil businesses generally, probably suffered in the economic downturn in 2017/2018: See: Shapilova, and Zhukov.  No evidence was produced to explain the financial health of KEC.  It would have been interesting background material.

47.4  The Court was told that in Russia businessmen prefer to keep a low profile.  Often, they choose to keep their identity off the Russian State Register.  They prefer to use nominees to hold their interest for them.  Maxim implied that such anonymity was usual: “…we don’t mention such matters in any document which becomes public.” (See Day 14).  Nominee arrangements were widespread, there many examples at Trial:

47.4.1  Shapilova acted as nominee to register Team Plaintiffs shareholding in KEC;

47.4.2  the mysterious Abdulla and Kirbitov appear to register Maxim’s interest (although he denies that they were his nominees). 

47.4.3  The use of nominees was not fully explained.  An explanation would have been interesting background material, particularly because Russian law does not readily recognise nominee holdings.  It is different from Hong Kong law, where the use of nominees is widely recognised and enforced. 

47.4.4  Expert evidence on this aspect of Russian law was produced but was not adduced.  The treatment of nominees in Russia would have been interesting background material. 

47.5  Various offshore companies outside Russia (Petrochemical, Rosewood, some of the Import agents) were used by KEC.  In Hong Kong, HSBC was their principal bank (being one of the few banks outside Russia available to Russian citizens).  Sidorova organised financial matters for KEC from an office in Amsterdam. 

47.5.1  The care taken to keep aspects of KEC business outside Russia is interesting background material which was not fully explained. 

The Evidence, the facts established and certain observations on credibility. 

48.  It is convenient to consider the fairly complicated facts in relevant time zones. 

2013 to 2017: The origin of KEC leading up to the Memorandum

49.  KEC was in the business of supplying of oil drilling equipment, including pipes, to oil and services companies in Russia: see Dmitry’s WS [9] [B1/1/3]; Maxim’s WS [17] [B1/9/104]. 

50.  Dmitry, Borovskiy, Kovalenko, Zhukov (Team Plaintiff) originally owned about 45% of KEC according to the Unified State Register of Legal Entities in Russia where their shareholding is recorded under their nominee Shapilova, but confusingly other documents produced for the sale of Telesystems auction as set out in the Addendum show their holding to be about 38%.  Often in evidence and in the written submissions Team Plaintiff are referred to as the “ultimate controllers” of KEC.  Under Hong Kong Law this cannot be right: at all times their holding was a minority interest as against Maxim’s 55% (and a higher 65% shown in the documents prepared for the Telesystem auction).  A simple chart was submitted by the Plaintiff to illustrate its case on the entities associated with KEC (See Annexure 1).  The detail is set out in Dmitry’s WS [5]-[17] [B1/1/2-7]. 

51.  Maxim’s interest in KEC the Plaintiff asserts was held by Abdulla and Kirbitov acting as his nominees and so forming part of Team Defendant: See D/11126 to 128. 

52.  KEC sold oil drilling equipment sourced in China to customers in Russia using Petrochemical as the conduit.  Dmitry stated that Synergy later assumed the same role: see Dmitry’s WS [17] [B1/1/6].

53.  The Plaintiff asserted that Petrochemical was held in equal shares by Team Plaintiff and Team Defendant through nominees, namely, Gold Dragon (for the Plaintiff) and Rosewood (for the Defendant) See: [D6/150/1403, 1410]: and Dmitry’s WS [15] [B1/1/4-5].  Maxim disputed this and denied controlling Rosewood through nominees. 

54.  The sole shareholder / director of Synergy was Yuri wife, Joanna Lis [D6/152/1453, 1460].  The Plaintiff asserted Synergy was controlled by Maxim using Yuri Lis as his agent (right hand man).  Maxim strongly denies this.  Yuri Lis denies this and stated that Synergy was his family company owned and operated by his wife Joanna (whose impressive CV shows she is an experienced business woman). 

55.  Petrochemical and / or Synergy purchased the oil drilling equipment from Chinese manufacturers (e.g.  Shengli, Feng Lei[1]), and sold it to KEC through Import Agents who arranged custom clearance and delivery to clients in Russia: see Dmitry’s WS [93.3] [B1/1/35]. 

55.1  Maxim stated that some of these Import Agents were “toxic” in the sense that they sought to evade tax liabilities in Russia which resulted in the banks declining to deal with them: see Maxim’s WS [27] [B1/9/106]. 

56.  Dolganov was the director and general manager of KEC.  The Plaintiff asserted that Dolganov represented Maxim as his nominee in Team Defendant.  Maxim denied this.  Dolganov did not give any evidence. 

56.1  Shapilova purported to speak on Dolganov’s behalf: See her WS [4] [B1/7/87].  Shapilova was, until 4 September 2017, the Chief Accountant of KEC.  She was removed by way of a voluntary resignation arranged by Dolganov.  The Plaintiff asserts that this was orchestrated by Maxim who controlled Dolganov.  Maxim denied this. 

56.2  Maxim stated that he did not approve of Shapilova.  He accused her of “interfering with his work” (See Day 15).  In particular Maxim was displeased when Shapilova attempted to access KEC bank records after she had been dismissed from the company.  She had no authority to do this. 

56.2.1  Maxim said the decision to dismiss Shapilova was entirely that of Dolganov.  He stated that Dolganov was not his nominee. 

57.  I preferred the evidence of Maxim in this conflict of evidence.  Shapilova was not an impressive witness.  At times she appeared uncomfortable.  She often looked around in the witness box for support from Dmitry who was sitting behind her.  Shapilova was clearly in Team Plaintiff.  She is still employed by Dmitry. 

57.1  There was some incredible evidence that Shapilova tried to persuade Dolganov to give a witness statement on behalf of the Plaintiff.  Incredible because it is the Plaintiff’s assertion that Dolganov was Maxim’s nominee and clearly in Team Defendant.  So it was quite inconsistent for Shapilova to approach Dolganov with drafts of the statement which Dmitry wanted him to provide for the Plaintiff: See WeChat exchanges. [15^th January 2021 Document page 1202]

57.2  Dolganov refused to provide a statement on behalf of the Plaintiff.  Shapilova attempted to explain this disappointment by suggesting that Dolganov was scared of Maxim and feared for the safety of his family (See Shapilova’s WS) There was no evidence, and nothing that I saw, to indicate that Maxim is dangerous.  To the contrary, observing him closely over many days, I found Maxim relaxed, almost laid back (rather like his once close friend Zhukov) and in no sense angry or threatening. 

57.2.1  If anyone was at risk from Maxim it was Shapilova (after they fell out and she was dismissed from KEC).  But Shapilova showed no sign of being concerned when Maxim was sitting a few metres away from her in the witness box.  Shapilova appeared calm and relaxed.  She even brought her teenage son along to watch the proceedings (the only risk to him was boredom as he listened to many Russian documents being translated into English.)  The boy did not come back the next day. 

57.2.2  As mentioned above after Shapilova had been dismissed as Chief Accountant of KEC.  Also, after her dismissal, she tried to access KEC bank accounts.  She had no authority to do so and her bank key had been cancelled by KEC. 

57.2.3  Why did Shapilova act in this unauthorized fashion.  She claimed that it was to protect the Company accounts.  Did anyone ask her to do this.  Obviously not Maxim who was displeased with her.  Clearly not Dolganov who had arranged her dismissal. 

57.2.4  I consider it unlikely that Shapilova was acting on her own volition.  Did Team Plaintiff encourage her in this unauthorized conduct.  There is no evidence.  Still an attempt was made to access KEC after Team Plaintiff had passed control to Maxim. 

57.2.5  I was not impressed by Shapilova’s behaviour in this regard.  Accordingly I treated her evidence with caution and gave it less weight. 

58.  Maxim denied that he held any shares in KEC.  He claimed he was just a substantial investor.  See Maxim’s WS [13], [22] [B1/9/103, 105]. 

June to early October 2017: negotiations leading to the Memorandum

59.  From June 2017 the parties discussed transferring Team Plaintiffs share in KEC to Maxim: see Dmitry’s WS [28]-[30] [B1/1/10], Maxim’s WS [25] [B1/9/106]. 

59.1  There was a meeting in London (Maxim, Borovskiy and Dmitry).  Then another meeting in Macedonia (Maxim and Dmitry) to discuss Team Plaintiffs exit plans from KEC: see Dmitry’s WS [28]-[29] [B1/1/10]. 

59.2  Dmitry wrote to Maxim (copied to Anna, the Finance Director) who the Plaintiff asserts acted for Maxim as part of Team Defendant.  Maxim denied this: See [D2/34/300-301, t302-303] Dimitry’ email states:

“…The current joint activities of the partners in the current project are coming to an end” … “purely shareholding structure change” ….  the “decision to change the shareholding structure has been agreed upon”.

They would “examine in detail the current balance sheet” to identify the value of the partners investment to be shown in a Separation Balance. 

59.3  The price for Team Plaintiff shares of KEC was negotiated: See Dmitry’s WS [35] [B1/1/12] and the emails with Maxim (copied to Anna): [D2/42/348, t349].  By the 25 September 2017, the Separation Balance was settled [D2/47/376, t397, 394, t416] showing 61.57% as Maxim’s interest and 38.43% as the interest of Team Plaintiff. 

60.  The events leading up to Memorandum include:

60.1  Shapilova was dismissed as Chief Accountant of KEC (4^th of September 2017).  As set out above the Plaintiff asserts that Maxim ordered her dismissal through his nominee Dolganov: see Shapilova’s WS [5], [8] [B1/7/87-88], Dmitry’s WS [36] [B1/1/13].  This is strongly contested by Maxim (see above).  Maxim stated in reference to Shapilova dismissal that she “had interfered with my work” [D2/41/332, t341. 

60.2  The Plaintiff asserts that Maxim obtained full control of the KEC by 17^th September: See SOC [9] [A/1/5], Dimitry’s WS [36.1] [B1/1/13].  Maxim denies this. 

61.  Although the Memorandum and the Addendum are not relied on as claims made by the Plaintiff considerable time was spent examining each document including construing their effect.  In Opening the Plaintiff set out their understanding of these agreements and explained that the impact of Russian law was not material (it being similar to Hong Kong law save that subjective intention can be admissible to settle instances of ambiguity). 

62.  The Memorandum is annotated in manuscript by Maxim.  This shows how careful and meticulous Maxim is: a businessman who takes his time before committing.  See [D2/50/421, t424]. 

63.  Although it is clear from the 4th August hearing that the terms of the Memorandum and the Addendum are no longer in issue, they are relevant background material.  Interesting terms are:

Paragraph I Maxim “undertakes to pay to” Dmitry a sum determined by reference to the Separation Balance amounting to US$3.3 million. 

The non liquid part of the balance (Telesystems) was to be valued by way of an auction which is explained in the Addendum.  After considerable negotiation the sum in respect of Telesystems was settled at US$288,255.  Maxim was successful in the auction.  [D4/ t789]. 

Paragraph II: Maxim was to receive full control of KEC. 

Paragraph III: The Terms and methods of settlement are fairly complex:

The 1^st part payment of US$1.75 million to be made by 25 November 2017 with Maxim’s manuscript annotation “equal tranches of 5 million robles per day to specified beneficiaries …”. 

The 2^nd part payment is by transfer credit of funds set out in the Separation Balance. 

The 2^nd Installment provided for interest at 12% p.a.  payable from the date of receipt of receivables from customers in the Separation Balance

Paragraph IV: envisages that payments were to be made through Assignment Agreements to be prepared by both parties.  Regardless of whether such payments could be made by Assignment Agreements Maxim remained liable to pay. 

64.  The Defendant asserts that the Memorandum, by referring to the Assignment agreements, contemplated the elimination of toxic creditors: see Defence [5(1)(c)] [A/2/54]; Maxim’s WS [8(3)], [35] [B1/9/102, 109]

64.1  Toxic refers to the perceived risk that certain Import Agents were involved in “serious violation of the law” by importing pipes evading tax liabilities in Russia. 

64.2  Maxim stated that unless the debts between KEC.  and toxic Import Agents were transferred under Assignment Agreements KEC would become liable for the tax owed by the Import Agents.  In effect the toxic element needed to be cleared by transferring the debt to a clean creditor (with no tax exposure in Russia). 

65.  The method for payment under the Memorandum is far from clear.  I do consider that it offers scope for the Defendants assertion that Maxim’s obligation to pay Team Plaintiff was not personal to him but instead an obligation to arrange payment by way of Assignment Agreements between KEC and the Import Agents. 

October 2017 to early February 2018: Part Payments made under the Memorandum and the origin of the Addendum

66.  On the 15th of February 2018, the Addendum was signed.  As mentioned, it dealt with the non- liquid assets of KEC and fixed their value by way of an auction for Telesystems: see [D4/89/788, t789] and [D3/68/591-598]; and Borowski’s WS [5]-[9] [B1/2/52]. 

67.  The Plaintiff asserts that two major events occurred during this period.  The Defendant disputes them both:

67.1  Team Plaintiffs 45% interest in KEC held by Shapilova was transferred to Abdulla (giving him a total of 18.2%) and Kirbitov (giving him a total of 81.8%).  The Plaintiff claims that these 2 men were Maxim’s nominees which Maxim denies See: SOC [10] [A/1/5], Dmitry’s WS [48] [B1/1/19], Shapilova’s WS [12] [B1/7/89]. 

67.2  Part payments were made towards fulfilling Maxim’s obligations under the First Payment provisions in the Memorandum.  These are summarized in the Plaintiffs written material: See also Dmitry’s WS [47] [B1/1/18]and [110]-[116] t [B1/1/18, 42-47]:-

No.	Date	Payment (as converted from roubles)	Method
1	24 Oct 2017	US$57,537.23 / RUR 3,306,699.07	To Vostokbusinesstrade LLC under Assignment Agreement [D2/57/448-452, t453-457] See also Maxim’s WS [53(7)] [B1/9/115-116].
2	25 Oct 2017	US$77,631.62 / RUR 4,470,432.24
3	26 Oct 2017	US$77,592.81 / RUR 4,470,432.24
4	27 Oct 2017	US$77,728.22 / RUR 4,489,916.26
5	31 Oct 2017	US$77,584.1 / RUR 4,489,916.26
6	31 Oct 2017	US$77,584.1 / RUR 4,489,916.26
7	2 Nov 2017	US$77,205.09 / RUR 4,489,916.26
8	3 Nov 2017	US$77,296.54 / RUR 4,489,916.26
9	7 Nov 2017	US$71,262.16 / RUR 4,163,819.39
10	7 Nov 2017	US$26,682.06 / RUR 1,607,567.73
11	19 Dec 2017	US$84,506.08 / RUR 4,960,000	To Nikiforov under Assignment Agreement [D1/14/151-152, t154-155]
12	22 Dec 2017	US$86,066.16 / RUR 5,040,000
13	29 Jan 2018	US$101,135 / RUR 5,000,000	Cash of RUR 5 million from Yuri Lis (denied by Yuri Lis: Yury Lis’ WS [30] [B1/10/152])
Up to the PN date (16 Feb 2018)		Paid: US$969,811.17 Amount allegedly outstanding under the 1st Instalment: US$780,188.83 Total amount allegedly outstanding (including the 2nd Instalment and the sum due under the Addendum): US$2,618,413.83

67.3  Payments No.  1-12 were made through Assignment Agreements to third parties, which were then transferred to Petrochemical on account for Dmitry See [D2/47/376, t397, 378]).  These payments were acknowledged by both parties See:

67.4  Dmitry’s email to Maxim on 29 January 2018 [D4/87/761, t764], confirming that he had received a “paper sheet stack for 5 million” (reference to Payment No.  13 in cash, not effected through an Assignment Agreement) but he “has not put it in the balance reconciliation yet”. 

67.5  the annex to the email sets out an account of Payments No. 1-12 (the “Jan 2018 Accounts”) [D4/87/762-763, t765-766]: US$698,103.93 paid under Assignment Agreement (DME) [D4/87/762, t765] and US$170,572.24 paid under Assignment Agreement (Nikiforov) [D4/87/763, t766]. 

67.6  This email referred to the Memorandum, and Dmitry demanded that Maxim pay the outstanding amount due [D4/87/761, t764]. 

68.  Dmitry explained how payments through the Assignment Agreements were made See his WS [110]-[113] [B1/1/42-46]:

68.1  Payments No.  1-10 (from 24 October 2017 to 7 November 2017) were based on the Assignment Agreement between Vostokbusinesstrade LLC and Drilling Machines Engineering LLC (“DME”) [D2/57/448-452, t453-457] (“Assignment Agreement (DME)”).  Maxim appears to accept that such payments were made: See his WS [53(7)] [B1/9/116]. 

68.1.1  The debt being assigned to DME was RUR 38,860,964.24, owed from VostokTEK to Vostokbusinesstrade.  The consideration for the assignment was RUR 38,760,964.24 (to be paid from DME to Vostokbusinesstrade LLC).  KEC made the payments on behalf of DME (structured as a loan [D2/58/459, t461]). 

68.1.2  The payment from KEC to Vostokbusinesstrade was in roubles.  Vostokbusinesstrade made onward payment to Petrochemical in USD. 

69.  Payments No. 11-12 (made on 19 December 2017 and 22 December 2017) were affected by another Assignment Agreement from Verta LLC to an Independent Entrepreneur Nikiforov [D1/14/151-152, t154-155].  The Nikiforov Assignment Agreement is summarized:

69.1  The debt assigned was RUR 83,960,541.38, which was previously due from KEC to Verta LLC under Supply Agreement No.  12/13. 

69.2  Dmitry explained that KEC paid RUR 10,000,000 (Payments No.  11 and 12) on this assigned debt to Nikiforov in December 2017 [D3/75/681, t683] [D3/77/689, t691], which was paid by a separate entity, Dongming Fenjia to Petrochemical in USD.  Anna sent the relevant payment orders to Dmitry [D3/75/680, t682] [D3/77/688, t690]. 

70.  Thereafter further payments under the Memorandum were stopped for a time.  In summary:

70.1  On 25 December 2017 Dmitry claims that Yuri Lis informed him that Maxim intended to liquidate KEC: see Dmitry’s WS [85] [B1/1/31] and the messages at [D3/72/657, t664] and the emails on 29 January 2018, 2 February 2018 and 20 February 2018 [D4/87/761, t764]; [D4/90/791, t793]; [D4/94/919, t922]. 

70.2  On 29 January 2018, Yuri Lis made payment in cash of RUR 5 million (Payment No.  13) See WeChat exchanges between Maxim, Dmitry and Borovskiy. 

Mid-February 2018 into the late summer of that year: The dispute between the parties becomes entrenched around the time of Chinese New Year.  The Addendum was signed.  The hotly contested document, the PN, appears for the first time. 

71.  This period is overshadowed by the surprise appearance of the PN on the 19^th of February 2018. 

72.  In the winter of 2017, the relationship between the former friends became strained.  Team Plaintiff became increasingly alarmed by Maxim’s delay to make further payments under the Memorandum (particularly as they had already arranged for Shapilova to transfer their shares to Abdulla and Kirbitov).  Maxim started to resent the pressure put on him to arrange payment. 

73.  The exchanges between the parties after the “Christmas Day Message” (D3/72/664) are summarised below.  It is worth noting that the 25^th of December is not Christmas Day in the Russian Orthodox Church (unlike the West, Russia celebrates Christmas and the New Year about three weeks later in January). 

74.  These messages between the parties intensified around Chinese New Year 2018 (13 / 15^th of February).  Counsel for the Plaintiff placed a skillful interpretation on these emails / WeChat exchanges when cross examining Maxim with a view to show that these exchanges lead up to the issue of the PN by Maxim. 

75.  But Maxim was up to this challenge.  He dealt with Mr Hollander’s clever questions with calm, reasoned skill.  Like a chess player he anticipated what was coming and had prepared his next move.  He disagreed with what was being put: it was not the correct interpretation of the email / WeChat exchanges.  Maxim told Mr Hollander: “You are misrepresenting my words” (See Day15).  Maxim also said, more than once, when questioned about the tight phrases used in some of the documents that he was a businessman, not a lawyer. 

76.  Was Maxim lying (which was repeatedly put to him).  Sometimes maybe, but generally no more than the key witnesses in Team Plaintiff when they were doing their best to maintain their case (See particularly the comments on the credibility of Shapilova, Dmitry and Kovalenko below). 

77.  Maxim pointed out to Mr Hollander that these email / WeChat exchanges were not the whole story.  He discussed these matters and negotiated further with members of Team Plaintiff orally and by phone (See Day 15).  There is no record of these conversations but it would be surprising if they had not taken place. 

78.  On the crucial issue Maxim’s evidence was clear and unshaken: these email / WeChat exchanges had nothing to do with the PN, in no sense were they the build up to the issue of the PN. 

78.1  Maxim insisted that he had never seen the PN.  It was not his document.  The purported signature of his name is a forgery.  I consider Maxim’s evidence in more detail below but for present purposes I was impressed by Maxim’s evidence that he did not produce the PN and that he did not sign it. 

79.  The “Christmas Day” messages indicate that no further payments would be made under the Memorandum and/or the Addendum by way of the Assignment Agreements.  On 29^th December Dmitry complained to Maxim that since he had stopped payments under the Assignment Agreements, he must find another way to pay. 

80.  Shapilova, dismissed as Chief Accountant of KEC on the 4^th of September was brought back to help answer a Russian State Tax investigation conducted inhouse concerning certain VAT issues. 

81.  Borovisky met Yuri Lis in the Suvretta House Hotel in St Moritz.  He stated that they discussed future payments by Maxim to Team Plaintiff.  Yuri Lis did not agree with his account of their discussions.  Instead, he described the occasion as a pleasant family holiday (it was early January 2018 and so the winter sport season in the Engadine Valley). 

82.  A few weeks later certain cash payments were made by Yuri Lis; See the emails where brick is used as Russian slang for 5 million roubles: D3/68/599 and D/4/87/764.  Maxim and Yuri Lis deny that the Plaintiffs interpretation is correct. 

83.  Around this time Dmitry states that Maxim told him that he was experiencing cash flow problems which caused the delay in payment See WS/ B1/18-21.  Zhukov also said that Maxim told him something similar: See Day9.  Maxim denied this and he insisted his financial position was sound. 

84.  The exchanges which follow the Christmas Day message relied on by the Plaintiff to show the build up to the issue of the PN number around ten: See the emails / WeChat messages/ documents at page 765, page 764, page 793, page 935, page 936, page 937).  As already mentioned, Maxim stated that these exchanges only tell part of the story.  Matters were discussed orally and over the phone with Team Plaintiff (See Day16). 

85.  It is important to put these exchanges into a proper context.  At the time of these exchanges (February / March 2018) the parties were negotiating the Addendum which was eventually signed by Maxim in February.  The PN is dated the 16^th of February.  The Plaintiff claims that the PN was handed by Yuri Lis, acting on behalf of Maxim, to Kovalenko in Moscow on the 19^th of February.  Both Yuri Lis and Maxim deny this (See the analysis below).  In summary the exchanges between Dmitry and Maxim are:

85.1  On 15^th February 2018 Dmitry demanded payment by email: See [D4/91/795, t797] [D4/95/929, t936].  Maxim replied that he was “almost ready according to the calculation.  I am preparing offers that are difficult to refuse.”.  Note that this email uses the plural of the word offer i.e.  offers. 

85.2  This phrase “offers that are hard to refuse” is relied on by Team Plaintiff as heralding the arrival of the PN (which is dated the next day: 16^th of February 2018).  Maxim states that this is a misinterpretation of what was being negotiated.  The Plaintiff has misrepresented the phrase “offers that are hard to refuse” which in fact refers to the calculations to fix a price for the sale of Telesystems.  The 15^th February was the final date for offers in the auction for Telesystems. 

85.3  Dmitry continued to press Maxim for payment: See particularly the email dated 20^th of February 2018 [D4/94/917-919, t921-922] [D4/95/927, t935], [D4/87/761].  Significantly this is the day after Kovalenko claimed to have received the PN from Yuri Lis.  Dmitry explains that no mention was made to the PN in his email to Maxim because Kovalenko had not yet told him that it had been received: See WS B1/1/21). 

85.4  Kovalenko explained that he did not phone Dmitry to tell him about the PN until later on the 20^th February.  Significantly the Plaintiff claims that this call was made after Dmitry had sent his email to Maxim.  I consider this explanation from Kovalenko and Dmitry later but for present purposes I find it hard to be accept. 

85.5  One of the extraordinary features of the email / WeChat exchanges between the parties after the appearance of the PN is that none of them mention the PN.  It is as though the PN was a thing writ in water. 

85.6  The parties continued to argue about repayment under the Memorandum and the Addendum but never once refer to the substantial sum apparently promised in the PN. 

86.  A strange feature of these exchanges in that sometimes they are expressed in hard business terms but other times the language becomes jokey and friendly. 

86.1  It was the Chinese New Year holiday.  Both Dmitry (in Thailand) and Maxim were celebrating with their families.  There are humorous references to eating dumplings. 

86.2  Some of the phrases stand out as odd (“to calm my old buddy’s nerves … never betray old friends “).  Not the language usually associated with tough Russian oil men.  There is none of the off colour rudeness which usually occurs when former partners are fighting. 

86.3  The exchanges in early March 2018 are interesting (See documents page 933, page 934).  On any view of the Plaintiffs case these occurred well after Dmitry had been informed of the PN.  Yet in these angry exchanges Dmitry makes no mention of the PN. 

The origin of the PN

87.  This is the central issues in this Trial.  At the hearing following the 4^th August Question Counsel for both parties confirmed that this is essentially a question of the credibility of the main witnesses who spoke to the PN.  See LN Day 19. 

88.  But it is important to emphasis that it is not only dependent on the credibility of the witnesses.  Equally important are the circumstances surrounding the document itself including especially the words used in the PN.  This is an objective assessment of the contents of the PN in relation to what the witnesses said about it. 

89.  The Plaintiff now asserts that the PN, was delivered in an envelope by Yuri Lis (on behalf of Maxim) to Kovalenko on 19 February 2018 in Moscow.  Originally the Plaintiff asserted that the PN was given to Dmitry by Yuri Lis on the 14^th of March (See Statement of Claim). This claim was radically altered to claim that Yuri Lis gave the PN to Kovalenko a month earlier on the 19^th of February: (See Amended Statement of Claim).  See further:

(a)  Kovalenko’s WS [B1/3/59-61] referring to a meeting with Yuri Lis on 19^th February at the Primavera restaurant in Central Moscow See also the WeChat messages [D4/92/880-882] Kovalenko states that he asked Yuri Lis why Maxim had defaulted in payments and that Yuri Lis replied that Maxim would make payment to a Hong Kong company or pay in cash at around US$100,000 per week Yuri Lis denied that this was discussed. 

(b)  Towards the end of this meeting Kovalenko claims that Yuri Lis gave him the PN in a plain A-4 envelope and told him that the document was to “protect old buddy’s nerves” adding that Maxim “would never betray old friends”.  Yuri Lis denied that he gave Kovalenko the PN.  He also denied that he said any such thing. 

90.  When he got home later that day Kovalenko opened the envelope and saw the PN.  He stated that he did not understand it because he could not read English.  He said he felt tired (it would have been about7.30 pm).  He decided not tell Dmitry about the PN until the following day.  In his oral testimony Kovalenko added the gloss that Dmitry was in Thailand, where the time difference was 5 hours ahead, so he considered it too late to phone him.  When eventually he did phone Dmitry on 20^th of February Kovalenko did not do so urgently first thing but he waited until the afternoon: see Dmitry’s WS [23] [B1/1/8]; Kovalenko’s WS [7] [B1/3/61]. 

91.  About a month after receiving the PN Kovalenko gave it to Dmitry when they met in Moscow on 14^thof March: see Dmitry’s WS [58] [B1/1/22]; Kovalenko’s WS [12] [B1/3/62]. 

92.  The terms of the PN apparently gave Maxim an extra year to pay Team Plaintiff (i.e.  on or before 22 February 2019).  Maxim also apparently promised to pay much more than the debt which was owing at that time.  The PN promises to pay the precise amount of USD 4,974,044.92 cents Dmitry was unable to explain how this figure is calculated.  But naturally, he was happy to accept it.  He assumed the larger amount was what Maxim meant by the phrase “offers which (were) hard to refuse”: see Dmitry’s WS [55], [60] [B1/1/21-22]. 

93.  Dmitry accepted the PN and in so doing claims to have given forbearance not to sue Maxim for breaches of the Memorandum and/or the Addendum.  Instead, the Plaintiff chose to rely on the promise to pay in the PN. 

94.  Maxim and Yuri Lis denied any knowledge of or any involvement in producing and / or delivering the PN to Team Plaintiff: see Maxim’s WS [85] [B1/9/128]; Yury Lis’ WS [27] [B1/10/150-151].  Further:

94.1  Yuri Lis stated that he had “not done any transaction or made any payment on behalf of” Maxim in relation to KEC: see WS [12], [27(1)-(2)], [35] [B1/10/146, 151, 154]. 

94.2  As mentioned above Maxim explained that the offers which (were) “hard to refuse” referred to the sale price for Telesystems which was being negotiated with Dmitry at that time See D4/91/795, t797] [D4/95/929, t936] and Maxim’s WS [86]-[88] [B1/9/129]. 

Further payments made AFTER the appearance of the PN including up to the maturity date stated in the PN (the 22^nd of February 2019)

95.  Despite the PN purporting to be a promise by Maxim to pay all sums due to Team Plaintiff further payments were made to the Plaintiff under the Memorandum and the Addendum after 19^th February 2018 (when the PN first appeared).  These payments were made without any reference to the PN or to the fact that the PN apparently extended the date for Maxim to repay Team Plaintiff by almost a year (i.e.  February 2019): See:

No.	Date	Payment (as converted from roubles)	Method
14	21 Mar 2018	US$99,475/ RUR 5,000,000	Cash from Yuri Lis: Dmitry’s WS [63] [B1/1/23], references to the payment in [D4/99/948, t949] and [D4/96/942, t944] (reference to “brick”) Payment admitted but its nature disputed: see Yury Lis’ WS [31] [B1/10/152].
15	24 Apr 2018	US$115,000	Cash from Yuri Lis: see Dmitry’s WS [65] [B1/1/23], see also WeChat between Yuri Lis and Dmitry [D4/100/950, t952].  Yuri Lis referred to the payment as “100 tons” paid via “Alesha” (i.e.  Alexey Kovalenko).  Denied by Yury Lis’ WS [30] [B1/10/152].
16	24 May 2018	US$56,250	Dmitry’s WS [66]-[67] [B1/1/24]; Bank transfer of US$50,000 from Synergy to Able Mass Investment Limited [D5/103/959, t960, 962, t963, 965] (referred to by Dmitry in [D5/106, 982-983, t984-985] as the last repayment transaction) Payment admitted but its nature disputed: see Yury Lis’ WS [33] [B1/10/153].

96.  Months after Dmitry and Kovalenko stated that they knew about the PN (at latest 14^th of March 2018 when Kovalenko claims that he gave the PN to Dmitry) they continued to discuss with Maxim ways of repaying Team Plaintiff under the terms of the Memorandum and the Addendum.  It is extraordinary that no mention was made to the PN in these discussions See:

96.1  In May 2018 the Plaintiff claims that Maxim offered a property owned by him in Moscow (the Klimashkina Apartment) in satisfaction of Team Plaintiffs claims: see Dmitry’s WS [75] [B1/1/28], Zhukov WS [13] [B1/1/28], email in September 2018 [D5/106/985].  Maxim denied this. 

96.2  The Plaintiff also claims that Maxim offered two London properties in satisfaction of the sums due to Team Plaintiff: a house in Marlowe’s Road, Kensington and a flat in Belgrave Mansion, Notting Hill: See Zhukov WS [13]-[20] [B1/4/69-71]; the emails [D5/109/993, t994] [D5/110/996, t999] [D5/111/1002, t1006] [D5/112/1010-1011, t1019-1020]. 

96.3  Belgrave Mansion was then valued at about GBP 1.55 million (which was close to the sum due from Maxim).  In retrospect it is unfortunate for all parties that these discussions did not produce a settlement to transfer one of Maxim’s properties to the Plaintiff in lieu of his debt. 

97.  In January 2019, a report was issued by the Russian Federal Tax authority which concluded, after a lengthy on-site tax inspection of KEC, that “no violations of value-added tax were found in Q2 of 2017”, and that “the inspectors propose to refuse to prosecute for tax offences” [D5/113/1025, t1032, 1027, t1034].  Maxim said in evidence that this investigation only referred to VAT and not other tax issues. 

98.  On the 25^th of January 2019 Maxim met Borovskiy at the Helsinki Airport: see Borovskiy’s WS [15] [B1/2/54] Borovskiy was accompanied by a lawyer friend of his who asked not to be identified.  Borovskiy claims that Maxim said in the presence of this anonymous lawyer that he “… never intended to pay.  All the documents, emails and other confirmation cannot be presented.  It is laughable, you were stupid enough to believe me.  However, I am willing to pay something just to make you shut up.”

99.  Maxim denied saying anything like this: see Maxim’s WS [71] [B1/9/.  Maxim added in evidence that it was inconceivable that he would have spoken in those terms in front of a lawyer (Day 16). 

100.  Having observed Maxim closely during the trial I find it hard to believe that he would have spoken so rashly in front of an unknown lawyer.  Maxim is a careful, cautious businessman.  I find it hard to accept that he would have been so foolish and spoken so rashly at Helsinki airport. 

Solicitors Letters before Action and the bankruptcy of KEC. 

101.  Maxim did not pay the sum outstanding by the end date stipulated in the PN (the 22^nd of February 2019). 

102.  On the 3^rd of May 2019 the solicitors acting for the Plaintiff, M.C.A.  Lai Solicitors (“MCAL”) issued a Letter of Demand based on the PN.  It was posted to Flat 4, 44 Cadogan Square, London, where Maxim’s wife and children resided. 

103.  In May 2019, proceedings were commenced by a Victoria LLC (“Victoria”) against KEC: see Defence [2(2)(c)-(e)], Schedule 1B [A/2/52, 76]. 

103.1  Victoria relied on an assignment of debt of RUR 73,960,541.38 owed from KEC to Verta LLC: see Schedule 1 to the Defence (Section B1) [A/2/76].  Victoria alleged that it obtained the debt from Verta by assignment dated 15 December 2015: see the relevant Judgment recording such proceedings which was uncontested [D5/114/1040-1041, t1042-1043].  Then Victoria commenced proceedings to liquidate KEC: Schedule 1 to the Defence (Section B1) [A/2/76] [D5/127/1143, t1146]. 

103.2  The Plaintiff asserts that this “assignment” was not a genuine transaction but was fabricated by Maxim.  It was apparently back-dated after Verta LLC had assigned the same debt to Nikiforov: see Dmitry’s WS [86] [B1/1/32].  The Supply Agreement No.  12/13 referred to in the said judgment [D5/114/1040, t1042] is the same as the Assignment Agreement to Nikiforov [D1/14/151, t154]. 

104.  On 18 June 2019, a second Letter of Demand under the PN was issued by MCAL to Maxim’s family’s address in Cadogan Square.  On this occasion service was effective and the registered letter was delivered: See [E/2/3] [D5/114A/1044-1 to 1044-2]. 

105.  Maxim denied receipt, or knowledge, of the two MCAL Letters of Demand: see Maxim’s WS [108(2)-(3)] [B1/9/137-138].  Maxim denied that he lived in Cadogan Square with his wife and stated that he lived in Cyprus.  Maxim did however agree that his wife (Natalia Moskaleva) and children lived in Cadogan Square. 

106.  Zhukov stated that Maxim told him that he had received MCAL’s Letters of Demand.  Apparently, Maxim told Zhukov that he would deny everything: see Zhukov’s WS [23]-[24] [B/4/71]. 

Analysis of the evidence adduced in respect the Issues to be decided

Issue 1

Is the PN a genuine document setting out Maxim’s promise to pay Team Plaintiff for the transfer of their interest in KEC. 

107.  This is the crucial issue in this trial.  It depends heavily on the witnesses who gave evidence about the PN.  There was a complete absence of common ground between the witnesses from Team Plaintiff and the witnesses from Team Defendant.  So where possible I have considered the surrounding circumstances.  In particular I considered, objectively, the plausibility of what the witnesses said in evidence. 

Circumstances surrounding the emergence of the PN

108.  I have considered, objectively, the circumstances surrounding the appearance of the PN.  These have little to with what the witnesses said and so are especially helpful.  Also, the contents typed in the PN are a useful indicator when determining whether it is a genuine document. 

109.  The PN emerged without warning on 19^th of February2018.  There was no reference to the PN in the many exchanges between the parties around that time (See the WeChat / email /other documents summarized above). 

110.  It is striking that the PN is the only document in this trial which is in English.  It stands out in the forest of thousands of other documents which are in Russian.  This itself is interesting so at the start of the trial I called for the original of the PN and made it Court Exhibit A. 

111.  Everyone who looks at Exhibit A will form their own opinion about the document.  I noticed that it is printed on cheap, flimsy paper.  This is surprising given the apparent importance of the document which purports to be a promise to pay almost 5 million US dollars.  Usually in a commercial dispute such a document would be carefully typed on good legal paper.  There is a tiny tear in the top right of the document.  There are two marks on the back of the PN which do not look like ordinary stains.  The language used in the PN is reminiscent of an old-fashioned draft from a book of legal precedents.  A current precedent for a simple promissory note (as shown on Google) is more carefully drafted and detailed.  My initial reaction to the PN was that it does not look like the finalized version of a very important document in a hard-fought commercial dispute. 

112.  The contents of the PN are written in simple plain legal English.  They have not been altered or amended in any way.  This is in stark contrast to many of the Russian documents in evidence (see for example the Memorandum, the Addendum and the Assignment Agreements).  Maxim is a careful businessman who frequently amends documents in his scrawly handwriting before agreeing to the contents.  

112.1  The PN contains a jurisdiction clause nominating Hong Kong to determine “any dispute, controversy, proceedings or claim of whatever nature to be governed and construed in accordance with the laws of Hong Kong SAR, PRC”.  This is in stark contrast to many other Russian agreements produced which all stipulate Russia as the appropriate jurisdiction for any disputes (normally the Moscow Commercial Court.). 

112.2  Both parties gave evidence that the Hong Kong jurisdiction clause in the PN was not in their interests.  They explained that it has added hugely to the cost and inconvenience of this trial.  It is one of the few things that they agree on.  And obviously they are right.  I consider this further when I deal below with the question of Costs.  In summary the extra expense and inconvenience includes:

112.2.1  the expense of translating the many Russian documents into English,

112.2.2  the logistical difficulty and the expense of arranging all the Russian witnesses to come to Hong Kong.  The need to translate their evidence into English once they got here,

112.2.3  the perceived complications in applying Russian law according to Hong Kong law.  Expert evidence on Russian law was obtained but, in the event, it was not called. 

113.  Determining which party is correct about the surprising choice of Hong Kong as the convenient forum is not straightforward.  It is something I look at in greater detail when dealing with Costs at the end of this Judgement.  Suffice to say that I find it surprising that either party would include a Hong Kong jurisdiction clause in the PN.  That alone is another, albeit smaller, fact which calls into question the genuineness of the PN. 

114.  More significant features of the contents in the PN call into question whether it is the genuine document of Maxim:

114.1  The sum is the very precise sum of USD 4,974,044.92 cents (i.e.  down to the last cent).  But this is not the sum due from Maxim at that time which was about USD 3,300,000 under the Memorandum and USD 228,225 under the Addendum (See D2/50/421-427; D4/89/788-791-1).  The total of these two sums which were due is 38% less than the sum specified in the PN.  So the PN promises an overpayment of USD 1,385,819.92. 

114.2  Dmitry, naturally was pleased with such an excessive overpayment, but he could not explain why so much more was promised.  Dmitry could not explain how the precise figure in the PN was calculated.  Significantly Dmitry did not ask Maxim for an explanation.  In his evidence, almost as an afterthought, Dmitry suggested that the sum in the PN was not particularly excessive.  He referred to his own calculations (which he did not produce) and suggested that the overpayment was in the region of USD 250,000 to 300,000.  Even this is not an inconsiderable sum.  I do not think that a careful businessman like Maxim would offer such an overpayment. 

114.3  Dmitry did not produce evidence to substantiate his own calculation of an overpayment in the region of USD 250,000-300,000.  Instead, he repeated what Yuri Lis was supposed to have said to Kovalenko when he gave him the PN (“protecting an old buddy’s nerves” … “calm down our partner”) See Day 3, Day 7 and Day 8).  In my view that does not help Dmitry: surely a simple promise to pay what was outstanding would achieve these objectives (i.e.  calm down Team Plaintiff). 

114.4  This unexplained, substantial overpayment, makes the promise murky.  It does nothing to show that the PN was the genuine promise of Maxim. 

114.5  What Dmitry thought about the substantial overpayment in the PN is not as important.  The important question is whether Maxim would have made such an extravagant overpayment.  I do not think so.  Maxim is a clever, careful, meticulous businessman.  I find it hard to accept that he would voluntarily submit to such an overpayment.  And he denied that he did so. 

115.  Another feature of the terms of the PN attracts attention.  It states that “if the promissory note is not fully repaid on or before February 16 2019 interest of 0.1 per cent for each day of delay shall be paid by the Borrower”.  That amounts to the usurious rate of about 36% p.a..  I consider it to be completely out of character for Maxim to offer such a penal rate of interest.  Other evidence shows that Maxim was sensitive to the rates of interest charged.  After careful negotiation with Dmitry, he managed to persuade Dmitry to reduce the interest rate in the Memorandum from 14 to 12 % p.a.  (See D2/427-1).  Given the careful attention to detail which Maxim applied to other agreements I find it hard to believe that he would voluntarily submit to such an extortionate rate of interest. 

116.  A surprising feature of the PN is that it states that the Memorandum agreement was on the 25th of September 2017.  In fact the sequence was different:

116.1  Drafts of the Memorandum were prepared, notably, on the 8th of September (See Document 324)

116.2  On the 25th of September Dmitry signed a different version of the Memorandum. 

116.3  Maxim continued to negotiate.  Finally, on the 24th of October, he signed the final version of the Memorandum which was different from the one signed by Dmitry in that it was heavily annotated with manuscript alterations in Maxims handwriting. Maxim signed in the presence of Zhukov in his house in Edward’s Square, London. 

116.4  So the actual agreement was, arguably, not until 24th of October.  Maxim knew this sequence so it is surprising that, if as the Plaintiff asserts, he prepared the PN Maxim did not insert the actual sequence of the dates in his negotiations with Dmitry. 

117.  Finally the PN is only purportedly signed by Maxim as the Borrower.  Dmitry, as Lender, has not signed.  Although it is not strictly necessary for the Lender to sign a Promissory Note it is normally done for the good reason that it limits the scope for disagreements later about what was decided. 

The evidence of the witnesses surrounding the emergence of the PN. 

118.  The evidence from Team Plaintiff (which is summarized above) now is that the PN was given to Kovalenko by Yuri Lis at the Primavera restaurant in Moscow during the afternoon of 19^th of February 2018. 

118.1  The PN was inside an A-4 plain white envelope which was not sealed and which bore no handwriting writing or other mark.  When, almost a month later Kovalenko gave the PN to Dmitry it was still inside the envelope.  As a further precaution Dmitry put the whole document, including the envelope, inside a plastic folder. 

118.2  Unfortunately, the envelope is no longer available (forensically it may well have revealed some interesting evidence).  Dmitry explained that the envelope “did not survive” when it was delivered by Team Plaintiff to their forensic Team.  That is a great pity.  Forensic experts know the importance of preserving the whole exhibit.  No one explained what was meant by Dmitry mysterious phrase it “did not survive”. 

118.3  After he received the PN from Yuri Lis Kovalenko took it back to the apartment where he was staying in Moscow (once his apartment but now owned by Dmitry’s son) It was about 7.30 pm.  Kovalenko claimed that he was feeling tired so he put the PN on the drinks bar.  Later he locked it inside his safe (apparently his gun safe: in Central Moscow). 

118.4  Kovalenko looked at the PN.  He stated that he could not read it because he does not understand English.  I find this hard to accept.  Kovalenko, like his friends in Team Plaintiff, was highly educated.  He is a successful businessman in the Russian oil industry where English words are often used (it is an international industry). 

119.  Perhaps the most significant feature of the PN in the context of Kovalenko’s evidence that he could not understand it is that the PN contains many numerals.  Numerals are not words (and certainly not English words).  Numerals are international symbols to denote numbers: See the Cambridge Dictionary where the definition of a numeral is “a symbol that represents a number”. 

119.1  Numerals are widely used across the world, particularly in business.  All European countries use numerals as symbols to represent numbers (you do not need to read French, German, Italian, English or American to know what the numerals in a document mean).  Generally Arabic numerals are used: 1 2 3 4 5 6 7 8 etc…  The Roman numerals: 1 11, 111,1V V…are less frequently used and generally only as sub paragraph numbers.  Numerals are also widely used in Russia: many examples of Arabic numerals can be found in the Russian documents prepared in Bundles for this trial. 

120.  So I find it hard to accept that when Kovalenko looked at the PN he could not understand any of it.  At the very least Kovalenko would have recognized and understood the numerals: “USD 4,974,044.92”.  He knew that the PN was a crucial document addressing Team Plaintiffs concerns about being repaid by Maxim because he claimed that Yuri Lis told him that the PN was a promise to “keep his old buddy happy” Yuri Lis denied that he said this.  But from Kovalenko position it makes it more probable that he would do his very best to decipher the PN when he got back to his apartment. 

121.  Kovalenko did not tell Dmitry about the PN that night.  He claimed that he was tired.  During his evidence Kovalenko added a gloss that Dmitry was on holiday in Thailand where the time difference (5 hours) would have made it too late to call.  Maybe.  But I find it hard to accept that tough oil men would balk at a short call to mention such a very important document.  A phone call, or an email, or a WeChat message at around midnight Thai time would not have been unreasonable given the obvious importance of the PN to Team Plaintiff.

121.1  Instead Kovalenko waited until the next day before calling Dmitry.  Surprisingly he did not do so first thing in the morning but he waited until the afternoon.  This might be significant.  The 20^th of February was the day that Dmitry sent Maxim a strong email about his failure to make payment (See above).  Could it be that Team Plaintiff tailored this piece of evidence to suit the time of this email and so to avoid the obvious question why no mention is made of the PN which, apparently, had just been delivered.  There was no clear evidence on this small detail so, although I find it interesting I do not rely on it. 

121.2  If Kovalenko received the PN in the afternoon of the 19^th of February I find it strange that no immediate steps were taken to bring the PN to Dmitry’s attention.  Of course, there are numerous ways that this could have been done.  The PN could have been copied in an email / fax / WeChat, sent by urgent courier or even by the simple expedient of asking someone who could read English to read it over the phone to Dmitry. 

121.3  When on the 20^th February Kovalenko finally told Dmitry about the PN, Dmitry did not appear to be in any particular hurry to see it.  He made arrangements to collect it from Kovalenko a month later when he returned to Moscow. 

121.4  I find it surprising that Dmitry did not make immediate arrangements to see the PN.  Dmitry’s evidence when cross examined about his failure to learn quickly what the PN said was weak.  He insisted that it was just another document from Maxim to join the pile of unfulfilled promises.  I was not referred to any such pile of documents and I cannot identify them.  There here are many emails / WeChat exchanges from Maxim but no obvious pile of important documents. 

122.  In any event almost one month later Dmitry did see the PN when Kovalenko gave it to him in the Moscow apartment (14^th March 2018).  The strange thing is that Dmitry never mentioned the PN to Maxim.  The PN is not referred to in the numerous emails / WeChat / other messages which passed between them after that date. 

122.1  Dmitry did however discuss the PN with Team Plaintiff.  They were divided as to how to treat the PN.  Apparently, Zhukov sided with Dmitry to rely on the PN.  The Court was not told the position of Kovalenko or Borovosky.  This is a significant gap in the evidence.  Was there some disagreement about the PN?  I have no idea, but I do consider it interesting that Team Plaintiff were not unanimous about how to use the PN. 

Observations as to the credit of Witnesses who gave evidence about the PN. 

Kovalenko

123.  Kovalenko was careful, almost guarded, in what he said: he was not forthcoming.  Frequently his answers to questions in cross examination amounted to “Don’t remember …Don’t know”. 

124.  When Team Plaintiff tried to explain the radical change in their case (the original claim that PN was given by Yuri Lis to Dimitry on 14^th of March was amended to claim that it was given by Yuri Lis to Kovalenko on the 19th of February) Dimitry stated that he needed to clarify the matter with Kovalenko. 

124.1  Of all the witnesses I saw, Kovalenko was not given to clarification.  He gave his limited evidence in a solid, almost begrudging manner and showed very little emotion.  He gazed straight ahead and kept his hands cupped.  He confined himself to the script of Team Plaintiff and did little to elaborate or clarify.

124.2  I consider this change in the Plaintiff’s case too radical and important to be explained away as a mistake over details which Kovalenko was required to clarify.  Dmitry, the document man, was meticulous and careful.  I find it hard to accept that he made a mistake about such an important detail.  Surely Dmitry would remember if Yuri Lis had given him this crucial document. 

125.  There was no evidence about Kovalenko’s position when Team Plaintiff discussed the PN but he was not one of those who supported Dmitry in relying on the PN.  Perhaps there was an undercurrent which explains Kovalenko’s reticence when giving evidence about the PN.  Of course I do not know.  But my observation of Kovalenko’s demeanor was that he was holding something back.  I did not think that he was telling the Court the full story about the PN. 

126.  Another aspect of Kovalenko’s evidence which I find hard to accept is that he felt too tired to deal with the PN when he returned to his apartment at around 7:30pm on the19^th February.  Tired?  Kovalenko is a strong, robust Russian oil man.  I found it unconvincing that he chose not to make such an important phone call to Dmitry that night. 

Dmitry

127.  Like the other investors in KEC Dmitry is highly educated.  He was a polite, courteous witness.  Older than the others in Team Plaintiff (and 10 years older than Maxim) he gave the impression of being a natural leader.  The others in Team Plaintiff deferred to his judgment.  They relied on him to look after the details and the documents relating to KEC. 

127.1  But Dmitry was not a forthcoming witness.  He stuck to the Plaintiff’s story and when pressed on certain matters in cross examination he answered flatly “Don’t know...don’t remember”.  As with Kovalenko I did not feel that Dmitry told the Court the full story about the PN

127.2  I did not find Dmitry evidence about the origin of the PN convincing.  His evidence, together with that of Kovalenko, was not plausible.  Surely Dimitry would not have waited a month before learning what the PN said.  Surely Dimitry would have discussed the PN with Maxim.  Surely Dimitry would have referred to the PN in this numerous emails/WeChat exchanges after Kovalenko told him about its existence (the 20^th of February 2018). 

128.  Dmitry appeared to be in control of Team Plaintiff.  He sat firmly at the back of the court observing everything that was going on.  No doubt Dmitry oversaw the preparation of the Plaintiff’s witness statements.  There is clear evidence that Shapilova was acting on Dmitry’s instructions when she attempted to tell Dolganov what to say in a witness statement in support the Plaintiff (See above; Shapilova WS; the WeChat exchanges between Shapilova and Dolganov). 

128.1  I consider it significant that Dimitry was trying to control Dolganov by drafting the evidence he wanted him to give and arranging for Shapilova to send Dolganov a draft. 

129.  Other witnesses for Team Plaintifff had a close connection with Dmitry and I sensed an element of his control in the striking similarity of the words and phrases used by them to describe the relationship between Maxim and Yuri Lis, See:

129.1  Ozerova (B1/5/75-78).  She was Dimitry’s financial manager for 15 years.  She asserted that Yuri Lis was Maxims “right hand man”.  Yuri Lis denied this.  Maxim stated that he had never met Ozerova and that he never spoken to her. 

129.2  Ozerova claimed that Maxim was the beneficial owner of Synergy.  Yuri Lis strongly denied this (and stated that Synergy was his family company run by his wife Joanna).

129.3  Ozerova also made the extraordinary, patronizing statement that Joanna was just a housewife.  This despite the fact that she had never met Yuri Lis or spoken to his wife.  I paid no attention to Ozerova’s insulting comment and accepted the evidence in Joanna Lis CV which shows that she is a highly qualified businesswoman.  Maxim also denied it. 

129.4  What was the source of Ozerova’s assertion.  The evidence is that she had never met Maxim or Yuri or Yuri wife.  Someone must have told her and persuaded her to repeat such hearsay in her witness statement.  I gave her evidence little weight. 

129.5  Shapilova is employed by Dmitry.  She did know Maxim and it is clear that after she was dismissed as Chief Accountant at KEC they were not on good terms (See above).  I have explained the reservations I had about Shapilovas credibility.  When commenting on Maxim she was not objective.  She appeared to remain resentful about what she perceived to have been his part in her dismissal from KEC. 

129.6  Sidorova (B1/8/94-97) is a business associate of Dmitry.  She knew Maxim and claimed that he referred to Yuri Lis as his right hand man.  Also, that Yuri Lis addressed Maxim as boss.  Maxim and Yuri Lis deny this.  Yuri Lis gave compelling evidence that he and Synergy were independent of Maxim.  He was not part of Team Defendant. 

130.  I realise that it is common for someone to take a supervising role in the preparation of a party’s Witness Statements.  But I consider that in this case that control extended further than normal with the result that, at times, it seemed that the Plaintiff’s witnesses were sticking to the same story. 

131.  There was a dispute between Dmitry and Yuri Lis about the circumstances of an attempt to meet in Moscow around the 12^th of March 2018.  See: WS B1/1/22; WeChat messages.  Dimity claimed that the meeting did not take place because Yuri Lis was suddenly taken ill and went to hospital.  Yuri Lis strongly denied this. 

131.1  I did not find Dmitry evidence convincing in this regard and I preferred Yuri Lis explanation (who would after all know best if he had been ill in hospital).  It would have been a simple matter for Team Plaintiff to check the hospitals in central Moscow. 

Maxim

132.  Maxim is clever, cunning and cautious.  Like his former friends in KEC he was capable of obscuring the real truth by incomplete answers.  Maxim, too, hid behind a shield of unhelpful statements like “Don’t remember.  Don’t know”. 

133.  As set out about above Counsel advanced a skilful cross examination in an attempt to show that the email / WeChat exchanges in January - February 2018 were the build up to the issue of the PN.  Although impressed I was not persuaded by these clever questions.  Dmitry and Maxim were seasoned businessmen operating in the tough oil industry 。Some of the jokey (almost childish) phrases used in these exchanges (“protecting old buddy’s nerves …) did not sound like a bitter dispute between former friends.  Surely if Maxim was contemplating issuing a promissory note, he would have told Dmitry in clear terms.  Then they would have discussed / negotiated the contents (like they did with all other important agreements). 

134.  These exchanges between Dmitry and Maxim do not explain the origin the PN.  They do however show that Maxim acknowledged a debt due under the Memorandum and/or the Addendum.  As mentioned above it is arguable that this debt was not personal to Maxim.  But I think that it is clear that Maxim acknowledged an obligation to pay Team Plaintiff and he discussed how to do so. 

135.  In these exchanges Maxim was clearly playing for time and trying to delay payment (“ducking and weaving” like an Artful Dodger).  Such evasive conduct does not impact well on Maxim’s credit which I have taken into account. 

136.  Was Maxim lying?  Probably no more than the witnesses from Team Plaintiff when they were trying to gloss over a difficult truth.  I do not think that Maxim’s evidence was malicious in the sense of a bald -faced liar.  Rather it was that of a business man in a corner trying to find a solution.  There was some mention that Maxim was suffering cash flow problems (See above) but there was no independent evidence to confirm it. 

137.  It is of note that sometimes, when pressed in cross examination, Maxim openly admitted that he had made a mistake.  See the evidence about litigation in the Moscow Arbitration Court concerning Aspect Finance (D/2/230-244).  It was put that Maxim participated in these proceedings through Yuri Lis (See Day 15)

138.  Maxim denied this and stated that Yuri Lis represented the other shareholders.  Apparently, Maxim did have some connection with these proceedings (but he was not a party).  Much later in his evidence Maxim admitted that he might have made a mistake when he was shown the Arbitration documents.  The proceedings were years earlier “I could have made a mistake over the exact dates …many years have passed.  This case concerns 2015.” (See Day 15)

139.  Another point of detail concerned the payment of a small bill of USD 5000 relating to Petrochemicals expenses.  Dmitry asked Maxim to pay half which Maxim did.  Maxim said it was only a few thousand dollars and, rather than upset Dmitry, (who he said could become angry when upset) Maxim simply did as he was asked. 

139.1  I consider that Maxim was honest about this small detail.  Of course, he realised that the Plaintiff relied on it to show that he owned part of Petrochemicals (through Rosewood).  Maxim denied this.  But he did not attempt to deny making this small payment when asked to do so.  I consider this to his credit.  A habitual liar would surely have denied it. 

140.  In conclusion I do not accept that Maxim was the inveterate liar which Team Plaintiff attempted to portray.  Maxim was dishonest at times, certainly, but not all the time.  The key witnesses in Team Plaintiff also had moments of being economical with the truth.

141.  I do not consider that Maxim was dishonest about the central issue in this Trial.  As set out above I believed Maxim evidence that he did not prepare the PN; that the signature is not his; that the PN is not his promise to pay Dmitry. 

Yuri Lis

142.  Of all the witness who gave evidence about the origin of the PN I found Yuri Lis the most reliable.  He was more inclined to assist the Court.  He was less inclined to hide behind shield answers like “Don’t know…Don’t remember”. 

143.  I was not persuaded by the Plaintiffs assertion that Yuri Lis acted under Maxims control (as a nominee/ “right hand man”/puppet).  Yuri Lis gave the impression of being quite independent.  His company, Synergy, did some work for KEC (arranging the logistics of importing oil equipment into Russia from China).  But Synergy did such logistical work for other companies which had nothing to do with KEC or with Maxim. 

144.  In cross examination Yuri Lis was challenged about aspects of his evidence:

144.1  Reliance was placed on the suggestion that Yuri Lis had once denied meeting Kovalenko on the 19^th of February 2018 (See B2/30/519 and Day 10).  Yuri Lis explained that he was disputing the account of the conversation given by Kovalenko.  He did not deny the fact that he met Kovalenko in the Primavera restaurant.  But he did deny Kovalenko’s account of what was said. 

144.2  I consider that Yuri Lis could have expressed himself better in his written evidence.  He emphasised that his denial of the meeting “as alleged” was simply his way of saying that he did not agree with Kovalenko’s account.  This is an obtruse way of saying that, although they met, he did not accept what Kovalenko said about the meeting.  I do not consider that Yuri Lis was lying about this. 

144.3  On the crucial point about what occurred at this meeting Yuri Lis was clear and consistent.  He did not give Kovalenko the PN.  He was a more impressive witness than Kovalenko. 

144.4  Yuri Lis was shown Team Plaintiffs’ witness statements which claimed that he was Maxims right hand man.  He denied this.  As explained above some of these witnesses had not met Yuri Lis.  At best their observations were weak hearsay (See Sidorova, Ozerova and to an extent Shapilova).  One of them suggested that her information come from reading the “document flow”.  This was not explained; no relevant documents were referred to as part of a flow of information.  It was not substantiated by reference to any relevant documents.  I preferred the evidence of Yuri Lis that he was not Maxim’s nominee. 

144.5  Zhukov, Borovskiy and Kovalenko also adopted the Team Plaintiff approach in their witness statements and claimed that Yuri was Maxim’s “right hand man” (See Zhukov B1/4/67 paragraph 6);

144.6  Borovskiy (B1/2/51) also states that he believed that Maxim owned Synergy.  He repeats the patronising comment (made by other of the Plaintiff witnesses) that Yuri Lis’s wife Joanna was just “a housewife” implying that she did not run Synergy;

144.7  Kovalenko (B1/3/58 paragraph 5)

145.  Repetition of an assertion does not always make it more credible.  I found Yuri Lis strong denial more persuasive than the litany of other witnesses who simply asserted that he was Maxim’s nominee. 

145.1  Although generally I found Zhukov and Borovskiy reliable witnesses, I consider that on this point they were reciting the Team Plaintiff script rather than giving an informed explanation of the relationship between Yuri Lis and Maxim. 

Other peripheral Issues Relating to credit

146.  As explained above, the 4th of August Question was most helpful.  The many issues of credit raised in the Trial were brought into focus.  Mr Fan (for the Plaintiff) explained that “...this case is very peculiar …because it turns almost entirely on credit.”  Mis Liu (for the Defendant) largely agreed.

147.  The credit of a witness depends on many factors.  The fact that a witness is dishonest about one thing does not necessarily mean that they will be dishonest about everything.  Like similar fact evidence (in a criminal context) a propensity to do the same thing again is closely scrutinised: the fact that a witness once lied does not mean that they always lie (once a liar always a liar is rarely the correct analysis). 

148.  Credibility depends on all the circumstances.  Given the crucial importance of credibility in this trial, both parties spent considerable time in their written submissions focusing on the credit arising from peripheral matters which had nothing to with the origin of the PN.  Some of these occurred years before the PN (such as Verta), or they occurred years after the PN, (such as Maxims passport and the entry in the Moscow Land Registry record).  In summary these peripheral matters of credit are:

148.1  The question whether Maxim owns a current Russian passport (analysed below). 

148.2  The relevance of certain entries in the Moscow Land Registry (analysed below). 

148.3  Maxim’s shares in KEC apparently held by Abdula and Kirbitov. 

148.4  Maxim’s defence that the Memorandum and the Addendum did not constitute a concluded agreement but at best were a “road map” for future negotiations (analysed above). 

148.5  Maxim’s denial that Yuri Lis was his nominee (his right hand man) This is analysed above where I conclude that Yuri was independent of Maxim and was not his nominee. 

148.6  Maxim’s denial that Doglanov was his nominee who acted on his instructions to remove Shapilova as Chief Accountant of KEC (in September 2017).  This is analysed above where I conclude that Dolganov was not Maxim’s nominee.

148.7  I also set out the inconsistency in the Plaintiffs case when trying to get a witness statement from Doglanov and yet claiming that he was in Team Defendant (and acted as Maxims nominee). 

148.8  The discussions between Maxim and Zhukov (in the summer of 2018) about the possibility of transferring property owned by Maxim in Moscow and in Central London to the Plaintiff in settlement of the sums due under the Memorandum and Addendum. 

148.8.1  Three properties were mentioned: the Klimashkina apartment in Moscow; a house in Marlowe’s Road Kensington; a flat in Belgrave Mansions, Notting hill (See Zhukov WS B1/4/68-71).  Zhukov inspected the Klimaskhina apartment (See D/4/ 739-748) and he inspected the Belgrave Mansion flat in late 2018 (SeeDay 9/ LN pages 90-91. 

148.8.2  These discussions came to nothing.  Maxim stated that there were obstacles to the transfer of the Klimashkina property, namely his father in laws interest (Zhukov WS B1/4/69).  The Kensington house was too valuable to be used in lieu of the sums then owing by Maxim.  The Belgrave Mansion flat came close to settlement.  The parties discussed drawing up an agreement and certain stamp duty issues but it was not concluded (Day9/LN page 139). 

148.9  Maxims denied that he was the joint owner of Petrochemical via Rosewood (which owned 50% of Petrochemical) with Dmitry’s company Golden Dragon. 

148.10  The Plaintiff asserts that Maxim controlled Rosewood through nominees namely Alexey Lipkin (who Maxim accepts was a friend) and Vadim Esipovich (a Cypriot lawyer who replaced Bu Ning, Lipkin’s wife).  Maxim denied that they were his nominees and he denied playing any part in Rosewood. 

148.11  The Plaintiff refers to an Ultimate Beneficial Owner request to Rosewood from HSBC sent to Esipovich and copied to Maxim (See D5/115/1150-1053) Maxim denied that he was involved in this routine enquiry. 

148.12  The Plaintiff relies on the fact Dmitry asked Maxim to pay half of a small bill for expenses (about $5000) relating to Petrochemical (See above).  Maxim accepts that he did contribute, but only because it was a small sum which he regarded as too trifling to have a disagreement with Dmitry: See Day 14/ LN pages 65-69. 

149.  Maxim denied that he was involved in deception when documents were backdated to give the impression that Verta had assigned debt to Nikiforov as part of an Assignment Agreement (See D1/14/151-152). 

149.1  The detail is fairly complex: Verta was wound up and deregistered in Russia in December 2015(See B1/83).  The director of Verta, Kharchenkoko died in 2017.  After he died someone arranged to assign debt of about 83million roubles from Verta to Nikiforov (See D3/667-670) Later in 2018, a much reduced sum of about 10 million roubles was assigned from Verta to Nikiforov (See D3/683-691).  Anna Ivanova emailed Dmitry to the effect that this reassignment was necessary to solve a problem for Nikiforov (D5/9900.  The reason was not explained but it appears it was related to tax issues in Russia. 

149.2  Maxim denied that he was involved in this backdating exercise.  He further denied that Anna was his nominee. 

149.3  As already mentioned, credit can go both ways.  It is significant that Dmitry was involved in this suspicious business.  He admitted in evidence that he had seen the English translation of the reassignment document (See Day 6 LN Page 6). The original of this document was not produced. 

149.4  Apparently, this assignment of around 83 million roubles (later reduced to about 10 million roubles) was relied on by Victoria in 2019 to commence bankruptcy proceedings against KEC (See D5/114/1042-1043).  The debt relied on by Victoria was the debt which Verta was shown to have assigned to Nikiforov in December 2015 (See D1/14/153-154).  KEC was wound up in November 2019 (See D5/127/1146).  The Plaintiff asserts that Maxim engineered the bankruptcy of KEC through the agency of Doglanov.  Maxim denies this and repeated that Doglanov was not his nominee. 

150.  I do not have the full facts or a clear explanation for the Verta / Nikiorov / Victoria assignment and the apparent reassignment of the same debt.  The thicket of detail is murky. 

151.  With regard to credit, neither party comes out of it well.  I did not find much assistance when considering the central issues surrounding the PN and the allegations of misrepresentation.  This is particularly so as all these assignment transactions occurred either long before or after the emergence of the PN.  None of them have a direct bearing on the PN. 

152.  The Plaintiff asserts that Yuri Lis acted as Maxim’s nominee in respect of a guarantee Synergy issued for Petrochemicals liability under a Multy-Party Repayment Agreement (SeeD2/28/261-1-2).  Yuri strongly denied that and stated that he was acting solely in Synergy’s interest and that he could easily afford to cover the guarantee.  See Day 10/page 92/12-13).  Maxim denied that he was involved in this guarantee or that Yuri Lis or Anna Ivanova were acting on his behalf. 

153.  The Plaintiff asserted that Yuri Lis was acting on behalf of Maxim in connection with a payment of US$50000 connected with Abel Mass.  Yuri Lis denied this.  He explained that the payment related to separate business between Able Mass and Synergy and was an operational expense (See Day 10/page 85 lime 2-4).  Maxim denied that he was involved in this transaction. 

154.  Set against these numerous allegations of dishonesty against Maxim the Defendant asserts that Team Plaintiff was dishonest in respect of various issues.  Examples are:

154.1  The complicated evidence surrounding Maxim’s passport shows a propensity of those acting for Team Plaintiff to overstep the boundary of acceptable investigation.  This is analyzed below. 

154.2  The Plaintiff commissioned a private investigation report ostensibly to show that Yuri Lis attended the Primavera restaurant at the same time as Kovalenko (19^th of February 2018): the Potok Surveillance Report (D6/1295).  This was established by photographs of relevant car registration and parking.  But the report strays widely into other matters which have nothing to do with this meeting.  It includes personal and confidential information about Yuri Lis and his wife and their daughter (including his passport number, his taxpayer number, his wife Joanna’s Facebook page and the birthday of their young daughter). 

154.3  Understandably, the Defendant claims that this is another example of Team Plaintiff overstepping data protection regulations in their search for material against Maxim.  I was not told the current law in Russian.  But it does seem an excessive intrusion into Yuri Lis family life just to establish a fact which is not much in dispute. 

154.4  The complicated evidence of entries in the Moscow Land Registry to show that Maxim’s passport number was used.  This is analysed below. 

155.  All these questions of credit are peripheral to the central issue.  I consider that there is ample evidence to decide whether the PN is genuine without particular recourse to these other, unrelated, issues.  Although I understand, and I have considered, the parties’ reliance on these peripheral matters I did not find them particularly helpful when deciding the central issues about the PN. 

156.  The Hearing on 14^th of August concentrated on 2 issues of credit about which much detailed evidence was called at Trial and lengthy submissions made in the Parties closing arguments.  These issues are:

156.1  Maxim’s passports and particularly whether he had a current passport for the Federation of Russia;

156.2  Maxim’s properties in Moscow and particularly whether he was registered as owner of a flat obtained by him through an inheritance. 

157.  Considering each in turn:

Maxim’s Passport

158.  The sole relevance is to provide another copy signature for the handwriting experts to consider.  They already had many signatures (over 300 control signatures and many sample signatures).  The sample signatures already had examples taken from Maxim’s identity/ travel documents:

Maxim’s expired Russian passport (International) which contains 2 signatures (C/3/514).

Maxim’s current Cypriot expired passport (C/3/513);

Maxim Cypriot ID card (C/3/512)

159.  The sample signatures were produced under Court Order: Mimmie Chan J (A/8/140-141). 

159.1  The Plaintiff claimed that Maxim is in breach of that order my not producing his current Russian passport.  He denied that he had one.  A lot of time was spent on the issue. 

159.2  On Day 1 the Court was informed that this passport would be produced.  But it never was.  Instead, on Day 7, the Plaintiff produced a strange document (apparently an application form in the name of Maxim for such a passport: the Application Form) Maxim denied that the Application Form was his.  Maxim also pointed out obvious errors in the Application Form:

159.2.1  Maxim’s marital status was stated to be single when, in fact, he had been long married;

159.2.2  The translator apparently had difficulty deciphering part of the contents of the Application Form which appear illegible. 

159.2.3  The Application Form stated that it was submitted by a certain Samoilova.  No one knew who this lady was.  Plotnikova, the Russian lawyer, engaged by Dmitry, to investigate this issue did not know. 

159.2.4  The Application Form states that the passport was collected by Samoilova.  At that time Maxim was not in Russian (he was celebrating his daughter’s birthday in a popular restaurant in Dubai). 

159.2.5  The signature on the Application Form purports to be Maxim for the receipt of the passport.  It does not look like his signature.  Maxim denied that he signed it.  (See Day 14 page 25). 

160.  I consider this issue confusing and, at times, murky.  I find it hard to accept that Maxim submitted a false application to the Russian authorities at a time when he was not in Russia.  Maxim is a careful man.  He would know the risks of trying to deceive the Russian State bureaucracy.  I had a glimpse of how efficient and unforgiving such a bureaucracy could be.  I was not persuaded that Maxim participated in this clumsy attempt to secure a passport at a time when he was not in Russia. 

161.  Attempts were made by the Plaintiff to show that Maxim had used this passport. 

161.1  Plotnikova (the lawyer engaged by Dmitry to investigate) managed to get a passport number from a copy of a document she persuaded a policeman to give her at the entrance to Moscow Central police station. 

161.2  Plotnikova with help from Lisenkov (a lawyer from the St Petersburg Bar), managed to obtain confirmation that such a passport had been issued (F/16/96-99).

161.3  Plotnikova noticed that this passport number (series 4620 Number 924945) had been used in an arbitration in Moscow.  Maxim did not participate in this arbitration and neither did Plotnikova. 

161.4  Counsel for Maxim strongly criticised Plotnikova’s conduct and implied that it was in breach of privacy / confidentiality regulations (which it would have been in Hong Kong).  I was not referred to the relevant Russian law, but it was accepted that Russia does have its own privacy laws.  Whether these laws were transgressed by Plotnikova is not possible to determine on the evidence. 

162.  Another issue arose when Maxim was questioned about whether he had been involved in arbitration proceedings (Day 14/line 15-18).  It transpired that he had participated by way of a power of attorney: See the Judgment (Exhibit P3).  This is referred to above (where I found that, to his credit Maxim openly admitted his mistake).  Maxim denied that he had used the passport in the way alleged. 

The Land Register in Moscow

163.  A lot of time was taken trying to decipher a thicket of detail contained in the Land Register records.  Annex 1 to the Plaintiffs Opening contains an Aid Memoire of the relevant documents (illustrated from the Ministry forms some of which bear the Official apostille and some do not).

164.  Plotnikova engaged two separate firms of Land Agents in Moscow to investigate the Ministry records.  Lisenko, explained the procedures within this large bureaucracy (he had once worked there).  Maxim denied that the records related to him and stated that he did not provide the passport details which are recorded.  Maxim stated that Plotnikovas enquires were not objective and he referred to some apparent inconsistencies (for example documents which did not identify the person responsible). 

164.1  This tight detail was only relevant to Maxim’s general credit.  The Land searches occurred many years after the emergence of the PN and have nothing to do with it.  Like the detail relating to Maxims passport I was not greatly assisted by the competing submissions on these documents when I came to consider the central issue of credit relating to the PN. 

164.2  No doubt Plotnikova did her best to explain the labyrinth.  But, at times I sensed that she was more enthusiastic than objective in fulfilling the instructions Dmitry had given her.  I noticed that during her evidence Plotnikova fidgeted with her hands and occasionally she looked round towards Dmitry who was sitting behind her in court. 

164.3  Plotnikova gave strange evidence how she obtained the copy of a report from the policeman at the Noginsky police station (Exhibit D1) See Day / LN pages 48-49.  The Defendant asked why Plotnikova could not now produce the document which she claims the policeman had given her (See Day 4 / LN page 49).  She was unable to explain.  

165.  There was considerable debate whether Russian Ministry of Internal Affairs documents (particularly the Land Registry) are issued in an apostilled form and, also, whether an electronic signature was necessary.  Livenko gave a helpful explanation. 

166.  On balance I found no convincing evidence to support the Defendants claim that some of the official documents relied on by the Plaintiff were not authentic.  Again, this small point of detail has no direct relevance to the central issues surrounding the PN.  I did not find it an indicator of credit either way. 

167.  Plotnikova gave evidence that she managed to obtain Maxim’s passport number (4620 No 924945) in the MAST – Bank arbitration in Moscow (Exhibit P3).  Maxim stated that he was not a party in this arbitration and indeed the Judgment does not include his name among the participants (See Day 15 / LN page57).  Maxim was challenged about this since it appears that he had an indirect interest by way of a Power of Attorney.  Maxim originally denied being involved, but when he was shown a record of the proceedings he openly admitted that he had made a mistake.  He explained that the Moscow arbitration judgment was years ago and he had forgotten the detail (See Day 15 LN page 57).  I consider that Maxim was frank and honest about this matter.  He readily admitted that he had made a mistake. 

168.  I have spent a lot of time on questions of credit because they are central to the PN.  But they are not the only question.  I found an objective analysis of the circumstances surrounding the appearance of the PN and an analysis of the contents of the PN more instructive than the conflicting issues of credit arising from the many peripheral matters referred to by the parties.  In situations, such as this, where there is a stark disagreement between the witness of fact it is instructive to look beyond for support. 

Conclusions on Issue 1

169.  I am satisfied that the P.N.  is not a genuine document prepared by Maxim to settle outstanding sums due in relation to the transfer of shares in KEC. 

169.1  A reasonable challenge was made by the Defendant to the validity of the PN (particularly the opinion of the expert, Mr Leung, who stated that the signature is not that of Maxim).  So the onus of proof was on the Plaintiff to prove that the PN is genuine.  I have concluded, on a balance of probabilities, that the Plaintiff has failed to prove that the PN is genuine. 

170.  A suspicion necessarily arises who created the PN.  The document is not particularly convincing: whoever concocted it was not that skillful.  From what I saw of Dmitry and his partners in Team Plaintiff, I do not believe that any of them forged the PN.  Dmitry, Zhukov, Borowski and even Kovalenko are too clever to have been so foolish.  There is no evidence how the PN was created.  Perhaps it was done by an over -enthusiastic underling trying to improve Team Plaintiffs position in the dispute with Maxim…but this is idle speculation which leads nowhere.  But it is important to record that I found nothing to indicate that that the key witnesses in Team Plaintiff were personally involved in this deceit. 

171.  Forgery and/or knowingly putting a false document before the Court is a serious criminal offense in Hong Kong.  A report has already been made to the Hong Kong Police.  The Court was told that there is no current information about the progress of the police investigation.  The criminal consequences, if any, are not my concern in this Trial.  It is sufficient for this Civil trial that I have concluded that, on a balance of probabilities, the PN is not a genuine document. 

Issue 2

Was Maxim’s signature forged on the PN

172.  This issue requires the assessment of diametrically different positions by the parties on the facts and in terms of the opinion of their expert witnesses.  The correct approach is for the Court to consider:

172.1  the inherent plausibility;

172.2  the consistency with contemporaneous documents and independent evidence;

172.3  the demeanor and credibility of the witnesses.  See Lee Fu Wing v Yau Po Ting Paul (2009) 5 HKLRD 513 at 524 per Au J (as then then was).

173.  The law relevant to the issue of forgery is set out in Choi Lisa Mei Yin v Yau Pak Kin (2020) 2 HKC 28 at 237-238 per Kwan J:

173.1  the burden on the party alleging forgery is to adduce evidence justifying a reasonable inference that the questioned signature was forged.  It is not enough to merely raise suspicious circumstances that do not themselves prove forgery;

174.  Handwriting expert evidence is considered to be necessarily of a lower order of cogency than credible direct evidence of witnesses who actually saw and heard what happened See Nina Kong v Wang Din Shin (2005) 8 HKCFAR 387 at 403-404 per Chan PJ and 463 I-J, 493 C-D, 500 F -505 H per Ribeiro PJ. 

175.  Two experts gave evidence about the questioned signature of Maxim on the PN

175.1  The Plaintiffs expert is Mr Guosheng Liang (“Liang”) See C/3/434-518;

175.2  The Defendants expert is Mr S.C Leung (“Leung”) See C/3/519-566;

175.3  These experts produced a Join Statement See C/3/567-574.  As often occurs they only managed to agree the parameters of Handwriting Theory but found themselves to be an Ocean apart in the application of that theory to the facts of the contested signature. 

175.4  It is settled in Hong Kong that the value of such expert evidence is subsidiary to the real evidence surrounding the origin of the contested document.  Since I have already concluded that the PN is not a genuine document it is, strictly speaking, unnecessary to decide whether the contested signature was forged.  But for completeness (and in respect for the time spent by the experts), I propose to do so albeit in a summary manner.  For a detailed account of the intricacies of the disagreements between Mr Liang and Mr Leung See their Reports and the Live Note Transcript of their expert evidence. 

176.  Both experts were polite and courteous doing their best to assist the Court understand their arcane science.  They were both distinguished and each had an impressive back story of giving expert evidence in Hong Kong. 

176.1  The Plaintiff cited the Judgement in another trial (China Energy per Cheng J) where Mr Leung gave expert evidence.  Critical comments were made about his methodology.  I was not much assisted by this comparison.  The facts in that case were different and so, I imagine, were the submissions.  The most skilled professional can sometimes fall into error (even Homer was known to nod) but that does not mean that they are generally unreliable.  I was impressed by Mr Leung: I found him to be careful, precise and objective.  I was not influence by adverse comments made about him in a different case some years ago. 

177.  Extracts from the important judgment of Ribeiro PJ in the Nina Kung case put the value of handwriting expert evidence into context.  Where the experts are divided and inconclusive their evidence has less weight (see 436 H-J) Handwriting evidence has a “soft, less precise facet involving professional judgment of a relatively subjective nature” (See 500 F-H). 

178.  The Court can determine the issue primarily on the factual material (the evidence of the witnesses, the nature of the contested document and an objective assessment of the surrounding circumstances) and explain, briefly, why the expert evidence did not assist (See Credit One Finance Limited v Leung Yong Lok (2020) HKCFI 2919. 

179.  The experts called at trial were experienced.  Mr Liang led a Team from the Fada Institute of Forensic Medicine & Science: Li Bing and Lian Yuanyuan.  Mr Leung also operated in a reputable environment.  But the two of them could agree very little about the contested signature.  In summary:

179.1  Mr Liang concluded that “the questioned signature…was highly probably written by the person who wrote the control signatures namely Maxim Moskalev” (See the Liang Team Report summary of Conclusions paragraph 4). 

179.2  On the other hand, Mr Leung concluded that “the signature on the questioned PN was not written by Mr Maxim Moskalev” (See Leung Report C/3 549 paragraph 6.2.2.) 

179.3  As already observed the difference between the two experts was an ocean apart. 

180.  Mr Leung states that the questioned signature exhibited a variety of fundamental differences from the control signatures.  These included the line quality; the letter formation; the morphology; the pen pressure; a variation in the patterns of the signature (variously described as a sausage shaped loop as distinct from a bow shaped loop).  Mr Leung concluded that these fundamental differences constitute a strong indication of forgery (See Leung Report C/3/556 at paragraph 8.3). 

181.  Mr Liang rejected Mr Leung’s opinion and stated that there were no fundamental differences between the questioned signature and the control signatures. 

182.  I listened with interest to the various adjectives and analogies used to describe the features of the questioned signature: toothlike structure; bow-shaped; sausage shaped.  It seemed to me to be subjective and influenced by the reaction of the person looking at the signature (like trying to describe in words the brush strokes in a Kandinsky painting).  Fortunately, the scope of such descriptions was kept under control and the suggestion that an ant-eater shape was more useful did not find traction with the experts. 

183.  The experts explained the indicators they applied: pen pressure; interference by foreign matter (such as a paper-clip lodged under the document being signed) called an “accidental; hesitation which includes pen-lift; a hiatus which includes retouching or patching; a blemish.  Mr Liang concluded that the contested signature was smooth and natural with no sign of pause, hesitation or pen-lift.  Mr Leung disagreed.

184.  The Plaintiff suggested that a holistic approach was required: to see the signature as a whole and not to focus on small imperfections.  Particularly if such imperfections only became apparent under the microscope. 

184.1  A complicating factor is that mass-produced signatures can be manipulated.  A clever witness will understand why the experts need control signatures to compare with the questioned signature.  It will be tempting to “control” the control signatures to advance the case they want.  They could write highly divergent controls to isolate the questioned signature.  Alternatively, they could write careful copies of the questioned signature if they want it to be confirmed.  The possibilities are endless.  No doubt the experts are aware of this. 

184.2  The study of handwriting is an old skill.  Nowadays, we all have experience of the modern world where banks can verify our signature in a split second.  Everyone knows that their own signature is not always exactly the same; it can vary depending on mood, tiredness, stress, age and even exuberance after a good dinner.  Yet with the wonders of AI when we sign a credit card bill on an ancient receiver in a far-flung place the bank recognizes it. 

185.  These observations are in no sense to question the skill of the experts (who I found very interesting and both of whom I admired).  But they put into context their debate about whether a feature of the signature is a tooth, a sausage or a bow. 

185.1  The details of this debate are set out in the Expert Reports.  They are carefully illustrated with many photographs and diagrams taken from the questioned signature and compared with the control signatures and the sample signatures.  Given that I have already decided that the PN is not a genuine document I do not consider it necessary to summarise this intricate detail again now.  I found it interesting, I understood it, but in the overall scheme of the central issues, I did not rely heavily upon it. 

186.  On balance I preferred the evidence of Mr Leung.  His Report is more logical and reasoned.  Mr Leung was a more impressive witness. 

186.1  I made every allowance for the fact that Mr Liang was the Senior witness. The Court afforded him every indulgence (including his preference to work only in the afternoon).  At times, Mr Liang was not so objective.  He appeared to disavow the benefit of using high-definition magnification when examining the characteristics of a signature.  Then it was pointed out to him that his Team had done exactly that.  Sadly this was the kind of mistake much loved by law students (“What do you mean you don’t know the co-efficient of linear expansion of brass!”).  Like any anecdote this exchange (F.E Smith cross examining an expert witness) has, no doubt, been embellished.  But it serves to illustrate the point that one careless mistake can undermine the reliance placed by the Court on an expert’s testimony.  I am afraid, with all due respect to his distinguished career, I was not persuaded by Mr Liang’s expert evidence.  I preferred the evidence of the Defendant’s expert, Mr Leung. 

187.  Given my conclusion that the PN is not a genuine document it is not so important for me to determine whether the questioned signature is a forgery.  But, for completeness, I do find, on a balance of probabilities, that the signature on the PN does not belong to Maxim.  It has been forged. 

Issue 3 Misrepresentation

188.  The principles are well established and were not controversial at Trial. 

189.  In summary the Plaintiff claims that at the time of the agreement for the transfer of Team Plaintiffs KEC shares in return for payment from Maxim he made representations that he would make full and timely payment and that he fully intended to do (Maxim’s Representations).  The Plaintiff asserts that Maxim’s Representations were false and so constitute actionable misrepresentations as fraudulent (deceit) or alternatively negligent.

190.  The elements of the tort of deceit are set out in Haifa International Finance Co Ltd v Concord Strategic Investments Ltd [2009] 4 HKLRD 29 [P#23] at 35, [15] per Cheung JA:

190.1  There must be a representation of fact made by words or conduct;

190.2  The representation must be made with knowledge that it is or may be false.  It must be wilfully false, or at least made in the absence of any genuine belief that it is true;

190.3  The representation must be made with the intention that it should be acted upon by the claimant;

190.4  It must be proved that the claimant has acted upon the false statement;

190.5  It must be proved that the claimant suffered damage by so doing. 

191.  A representation of present state of mind is a representation of fact: see Edgington v Fitzmaurice (1885) 29 Ch.  D.  459 [P#24] at 483 per Bowen LJ.  If a person induces another to enter into a contract with him when he had no intention to fulfil the contract, then this could amount to fraud because at the time of contracting he must be taken to have represented an existing intention to perform the contract: see also Leung Ping Shing Roger v Lee Kwok Kei (unreported: HCA 778/2007, [P#25]. 

192.  In determining whether there has been an express representation, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used: See IFE Fund SA v Goldman Sachs International [2006] 2 CLC 1043 [P#26] at 1056, [50] per Toulson J. 

193.  When considering an implied representation, the test is not one of implied contractual term, but whether, fairly read in all the circumstances, the passage contains (explicitly or implicitly) the representation alleged: see Jaffray v Society of Lloyds [2002] EWCA Civ 1101 [P#27] at [59], [303]-[307] per Waller LJ. 

194.  As to the requirement of falsity and dishonesty, if the representors own intentions are false, they must also be dishonest and so fraudulently made. 

195.  As to the requirement that the representee must have been induced to act upon the representation: -

195.1  There is a presumption of fact that a statement likely to induce a representee did so influence him.  This presumption is to be considered with all the evidence.  Where the representation was made fraudulently, the presumption will be “very difficult to rebut”: see BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises Inc [2020] QB 551 [P#28] at 567B, [32], 570F, [43] per Longmore LJ. 

195.2  There is no requirement in law that the representee must have contemporaneous awareness and understanding of the representation: see Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] 3 WLR 789 [P#29] at 828B-E, [156]-[157], 829C-H, [162]-[164] per Lord Leggatt.  It suffices for the Representor to have exploited an unconscious assumption by the Representee: at 832D-G, [175]-[176]. 

196.  As to the assessment of damages once an actionable misrepresentation has been established the Court ascertains the losses flowing directly as a result.  In this Trial any question of the quantum of damages in respect of any actionable misrepresentation has, by Court Order, been adjourned to a separate hearing See the 2^nd CMC Order [1] [A/7/1 33]. 

197.  Under section 3(1) of the Misrepresentation Ordinance (Cap.  284) [P#30], it is necessary to establish a subsisting contract (which on the facts of this Trial can only be the Memorandum and / or the Addendum).  It must be established that the Representations were intended to be acted upon and were in fact acted upon and that the Representations were false.

197.1  A “but-for” test is applied when considering whether there was an inducement: see e.g.  Marme Inversiones 2007 SL v NatWest Markets plc [2019] EWHC 366 (Comm) [P#31] at [303] per Picken J. 

197.2  If the representation is material, in that it would influence the judgment of a reasonable person when deciding whether to enter the agreement, this can also give rise to a rebuttable presumption of inducement and reliance: see e.g.  Zurich Insurance Co plc v Hayward [2017] AC 142 [P#32] at 155C, [29], 156G, [34] per Lord Clarke. 

197.3  The burden then shifts to the Representor to show an honest and reasonable grounds for making the Representation. 

Application of these principals to the facts

198.  The first difficulty the Plaintiff faces is that the Trial proceeded on the basis that no claims are being made for breach of the Memorandum and / or the Addendum.  Although the Court was taken to both of these documents and their contents were analyzed and construed there were no Submissions and so no finding by the Court that either amounted to a concluded agreement.  To the contrary the Defendant throughout maintained that they were not an agreement, but at best a road map setting out an understanding to agree in the future.  It follows that the Plaintiff cannot clearly demonstrate that, whatever representations Maxim made to Team Plaintiff, they were thereby induced to enter into an agreement. 

199.  This is unfortunate because on the evidence there is little doubt that Maxim did make representations to Team Plaintiff at the time of the Memorandum and/or the Addendum.  Then, maybe, it is not so unfortunate because I do not consider that Maxim’s representations were false (in the sense of being dishonestly made).  Further they were not recklessly made.  In summary my reasons are:

199.1  A preliminary construction of the terms of the Memorandum shows that the procedure for making payment was complicated and uncertain.  It appears to rely, in part, on the assignment of debt between KEC and various Import Agents under Assignment Agreements.  Maxim accepted an obligation to reimburse Team Plaintiff, but he maintained that this obligation was not personal to him but rather it was to arrange for KEC to pass over the funds once they were received under the Assignment Agreements.  This issue was not fully debated at Trial and no conclusion was reached as to whether Maxim’s obligation to pay was personal or was, instead, an obligation to arrange for KEC to pay the Plaintiff.

199.2  It follows that any representations Maxim made to Team Plaintiff did not induce them to enter into the Memorandum and / the Addendum since the Plaintiff accepted that whether either of these constituted an enforceable agreement is not in issue in the Trial.  No claims are advanced in respect of breach of either agreement. 

199.3  The important question whether Maxim’s representations were false (dishonest) or reckless is likewise not in issue.  But for completeness I summarize my conclusion based on the evidence:

199.3.1  The alleged misrepresentation is that Maxim promised to pay Team Plaintiff as a personal obligation and that he failed to do so.  I have already indicated that I am far from persuaded that the obligation to reimburse Team Plaintiff in the Memorandum was personal to Maxim.  The evidence, in fact, points the other way: such payments as were made to the Plaintiff via complicated Assignment Agreements between KEC and the Import Agents. 

200.  The fact these payments were made to the Plaintiff under the Memorandum and / or the Addendum is the most telling point against the claim of misrepresentation.  The fact that Maxim arranged for KEC to make some payments to the Plaintiff under the terms of the Memorandum and / or the Addendum must negate the assertion that Maxim was dishonest when he said he would pay.  Clearly Maxim did intend to pay.  That Maxim did not pay the full amount is not relevant: to amount to a misrepresentation it must be shown that Maxim never intended to pay.  The fact that he did pay something must defeat the Plaintiffs assertion that Maxim acted dishonestly (or recklessly). 

201.  My assessment of Maxim when giving evidence supports this conclusion.  I was not persuaded that Maxim is a dishonest, habitual liar.  I have analysed the many allegations of dishonesty levelled against Maxim and I have concluded that he was no more lying than other witnesses from Team Plaintiff.  They all lied to a certain extent to advance their case, but then at other times they were open and honest (admitting their mistakes).  None of the witnesses, including Maxim, were bald -faced liars, the enemy of the truth. 

202.  So, in conclusion, whilst it is clear that Maxim made representations at the time of the Memorandum and / or the Addendum I do not consider them to have been dishonestly made (or reckless).  The fact that Maxim did pay Team Plaintiff under these agreements and continued to pay after the appearance of the PN defeats any suggestion that he acted dishonestly (or recklessly) in this regard. 

Conclusion on the claims in misrepresentation

203.  The Plaintiffs claims in fraudulent misrepresentation are not made out and so must fail.

204.  The Plaintiffs claims in negligent (reckless) misrepresentation are, a fortiori, not made out and so must fail. 

Conclusion on the Plaintiffs claims in the Trial

205.  The claims based the PN must fail it having been determined that the PN is not a genuine promise by Maxim to pay the Plaintiff.  In further support of this conclusion, it has been determined that the signature on the PN is a forgery. 

206.  The claims in misrepresentation (fraudulent or alternatively negligent) are not made out and so must fail. 

Costs

207.  The Order for Costs is an Order Nisi.  The question is complicated and may well attract further submissions from the parties.  If the parties do not respond, within 14 days, to this Order Nisi for Costs it will become an Absolute Order for Costs. 

208.  General observations are:

208.1  The significant increase in the costs of the Trial caused by litigating a dispute between Russians in Hong Kong is referred to above.  It is a complicating factor when considering Costs because both parties, to an extent, contributed to the resulting inflation of costs.  The Plaintiff chose to initiate proceedings in Hong Kong.  The Defendant had the opportunity to challenge jurisdiction when he successfully set aside the Summary Judgment which the Plaintiff had obtained.  But the Defendant did not dispute that Hong Kong was the convenient forum by taking out a Summons for the Court to determine the forum conveniens.  Instead the Defendant submitted to the jurisdiction of the Hong Kong courts by filing a defence (and so took a step in the action). 

208.2  The fact that no claims were advanced in respect of breaches of the Memorandum and / the Addendum has resulted in the production of a lot of material which, in the event, was not relied upon except as part of the background. 

209.  A number of Interlocutory Summonses were referred to but not determined.  No order was made concerning the small Costs they will have generated.  

210.  The fact that I have concluded that Maxim still owes the Plaintiff further payment is a complicating factor.  Although Maxim has been successful in defending the central issues in the Trial, he does not have merit on his side. 

211.  The fact that I have concluded that the PN is not a genuine document and that the signature was forged, but that I have also concluded that none of the key witnesses in Team Plaintiff were directly involved in this deceit is a complicating factor. 

Order nisi as to costs

212.  All the Costs referable to the PN are to be paid by the Plaintiff to the Defendant on an indemnity basis.  

213.  All other Costs are to be borne by the parties themselves.  There is no Order for such Costs.

214.  This unusual Order takes account of the fact that Maxim, although successful in the Trial, still owes the Plaintiff a considerable sum.  I do not consider it just for Maxim to benefit by receiving all the Costs of this lengthy and complicated Trial.