‘Even pariahs have rights’: judge refuses request by Ogier to stop representing sanctioned Russian bank VTB
British Virgin Islands court rules that offshore firm’s ‘duties to the court’ outweigh reputational concerns
A British Virgin Islands (BVI) judge has refused to allow Ogier to stop representing sanctioned Russian bank VTB in an ongoing case, asserting that ‘even pariahs have rights’.
In rejecting the leading offshore firm’s application to ‘come off the record’, Mr Justice Jack held that VTB’s right to litigate had not been curtailed by the UK’s sanctions and that Ogier’s duties to the court ‘outweigh’ other considerations including reputational damage.
In his judgment, he cited Law Society of England & Wales president Stephanie Bryce, who, in the aftermath of Russia’s invasion of Ukraine, said “it’s the job of solicitors to represent their clients, whoever they may be, so that the courts act fairly”.
Jack said: ‘It is precisely when VTB are stigmatised as a pariah that VTB need the best endeavours of their legal representatives to advise them and to advocate in court on their behalf.
‘However uncomfortable it may be for Ogier, this is, as Ms Boyce asserted in respect of England and Wales, a vital safeguard for ensuring the rule of law in this territory. Even pariahs have rights.’
Ogier has been advising VTB in ongoing commercial litigation proceedings in the BVI commercial court brought by the bank to enforce Russian judgments obtained against various Russian businessmen and related businesses.
According to the latest ruling, Ogier had cited Russia’s ‘unprovoked’ invasion of Ukraine and the sanctions issued by the UK government as grounds for coming off the record.
The firm said it could not ‘represent VTB without the risk of Ogier and people who work for Ogier being in breach of the sanctions regime’ and it would ‘not place its employees in that sort of jeopardy’.
It also cited reputational concerns, the firm’s ethics and code of practice, and argued that VTB could not pay for the litigation to be continued because of the sanctions.
Rejecting its application, Jack noted ‘the effect of Ogier ceasing to act would be potentially disastrous for VTB’s conduct of the current proceedings’.
He added: ‘So far as reputational damage is concerned, there is on the one hand Ogier’s commercial interest in keeping its name unsullied by association with Russian state entities. Their contractual terms entitle them to terminate the retainer.
‘On the other hand, their duties as officers of the court require them to maintain the rule of law by ensuring access to the courts for the proper and fair determination of parties’ rights and obligations.’
He added: ‘I should add that one of the reasons I am giving this as an open judgment without anonymisation is so that it will be known that Ogier are continuing to act for VTB not out of personal choice, but because this Court has refused to allow them to stop acting for VTB.’
He also ruled that if no payments were possible ‘the issue of payment as a ground for coming off the record would need to be revisited’.
‘Given the large amount of work Ogier have done for VTB, a short period where they cannot bill whilst a licence is being obtained is not onerous,’ he said, adding that while the firm would still be owed money ‘the sums were manageable’.
Ogier instructed David Alexander QC of South Square to represent it. Maples & Calder and Carey Olsen acted for the defendants.
In a statement Ogier said: ‘The judgment shows that Ogier has made every effort within the bounds of its professional obligations to come off the record in this matter, including instructing a leading London silk to argue the case before the court.
‘Ultimately, however, the court has made a detailed, reasoned judgment, which we respect and, as officers of the court, will, of course, abide by.’
Earlier this month, it joined a host of leading commercial law firms by issuing a statement condemning the invasion and stating that it was 'not taking on any work related to or promoting the interests of the Russian or Belarusian state, or related to a supporter or enabler of Putin's leadership' and 'where appropriate... winding down existing mandates in accordance with our legal and professional obligations'.
On 7 March, Magic Circle UK firm Freshfields Bruckhaus Deringer said it was ‘taking steps’ to stop acting for VTB in London’s multi-million dollar ‘tuna bonds’ litigation. The firm had faced criticism for continuing to act for the bank when it emerged that it had received a licence allowing VTB to pay Freshfields' legal fees and expenses.
A few days earlier, Dutch firm Houthoff said it was ditching the Kremlin as a client but would ‘honour the applicable duty of care in the execution of this decision’ and ‘do so in consultation with the Dean of the Amsterdam Bar’.
The BVI ruling, however, suggests law firms seeking to back out of ongoing cases in other jurisdictions may run into a similar obstacle as that faced by Ogier. It also adds weight to the the Law Society’s position, which has drawn fire from some politicians as well as sections of the UK media.
Meanwhile, Ogier today unveiled a merger with eight-partner Dublin firm Leman in a major – and rare – foray into an onshore market.