The two men were accused by the bank of siphoning off vast sums using a complex string of financial transactions carried out by algorithm they framed as a ‘fraud of byzantine complexity.’

Alleged scam

The bank alleged a scam involving a series of deals where loans were issued and used to make advance payments for ‘impossibly large’ quantities of commodities that were never delivered. Both Mr Bogolyubov and Mr Kolomoisky denied any wrongdoing and are seeking to have a $2.6 billion freezing order imposed by the English courts against their assets set aside. The court found that a worldwide freezing injunction (“WFO”) should never have been granted and that PrivatBank artificially constructed the case so they could attempt to join Kolomoisky and Bogolyubov to the proceedings. Mr Justice Fancourt found that PrivatBank’s actions were impermissible and an abuse of Kolomoisky and Bogolyubov's rights under Article 6 of the Lugano Convention to be sued in their own domicile. Mr Justice Fancourt also identified ‘serious non-disclosure and misrepresentation’ by PrivatBank in its claim and accordingly set aside the WFO. PrivatBank had originally claimed approx. USD 1.91bn, but Mr Justice Fancourt found that the maximum possible value was about 75% in PrivatBank’s original claim and made no finding that any sum was actually due to PrivatBank.

'Somewhere' someday'

The Judge also made it clear he has not made any findings at all about whether or not there has been any fraud, concluding that ‘whether or not a fraud was involved will be a matter for trial somewhere, someday.’ The court ordered PrivatBank to pay costs. Andrew Lafferty, a partner at Fieldfisher and spokesperson for Mr Kolomoisky, said ‘we are delighted that the Judge has found that the WFO should be set aside as a result of serious and deliberate non-disclosures and misrepresentations to the Court by PrivatBank, during the hearing at which the WFO was granted and at which the Defendants were not represented. Mr Kolomoisky has always maintained that the Bank's claims are politically motivated, misconceived and will fail.’