International firm Hogan Lovells has achieved a partial victory on its application for summary judgment in a High Court claim for alleged conflicts of interest and breach of duty brought by a Ukrainian businessman.
Vadim Shulman is suing the firm for alleged breaches of duty which he says cost him 'a high percentage chance of recovering sums of up to $500m' from Gennadiy Bogolyubov and Igor Kolomoisky, the former owners of Ukrainian bank PrivatBank.
He retained Hogan Lovells International (HLI) and his claim was filed in May 2017, but the anchor defendant Bogolyubov successfully applied for a declaration that the High Court had no jurisdiction to hear the case as there was ’overwhelming evidence’ Bogolyubov became domiciled in Switzerland the previous month.
Shulman alleges HLI had 'multiple conflicts of interest' by also acting for PrivatBank in its claim against Bogolyubov and Kolomoisky as well as by representing Victor Pinchuk, who settled a billion-pound claim against the pair in 2016.
Hogan Lovels applied for summary judgment on the grounds that any alleged conflicts of interest relating to PrivatBank could not have arisen until it was retained by the bank in August 2017, by which time Shulman had already lost the chance to sue Bogolyubov and Kolomoisky in England and Wales.
In response, Shulman applied to amend his particulars of claim to include assertions that HLI’s alleged breaches of duty arose prior to April 2017.
Granting summary judgment on this part of Shulman’s claim, the High Court ruled that Shulman’s argument that the alleged conflicts of interest and breaches of duty as a result of Hogan Lovells’ retainer with PrivatBank had no real prospect of success.
Daniel Toledano QC, sitting as a High Court judge, said: 'Mr Shulman has not raised a credible basis for saying that, at any time prior to early April 2017 and by reason of HLI’s activities relating to [PrivatBank] (such as they were), HLI placed itself in a position where its own interests conflicted with those of Mr Shulman or acted in such a way as to breach its duty to act in Mr Shulman’s best interests.’
However, the judge refused HLI’s application for summary judgment on Shulman’s claim that he might have been able to obtain a freezing order which could have been used to extract a settlement before the High Court ruled on jurisdiction.
HLI had previously accepted that other aspects of Shulman’s claim against the firm, including allegations of conflict and breach of duty from the point of the PrivatBank retainer, are arguable and should proceed to trial.