There was a prolonged and deliberate contempt of court by an EU-sanctioned Russian oligarch and his companies, including one registered in Dublin, to proceed with a plan to take over full control of a rival company, the High Court has heard.
Billionaire Dmitry Mazepin, an ally of Russian president Vladimir Putin, is at the centre of an action in Dublin by the owners of the rival company over what they say was the unlawful takeover of €2 billion in shares of the firm in Russia.
Mr Mazepin is principal of United Chemical Company Uralchem (UCCU), and, before the takeover, was a minority shareholder in Russian firm Togliattiazot (ToAZ), both of which are producers of ammonia used in making fertiliser.
The takeover by Mr Mazepin of ToAZ makes him one of the largest ammonia producers in Russia.
The owners of ToAZ - Caribbean-registered trust firms Trafalgar Developments, Instantania Holdings, Kamara, and Bairiki Inc - have sued Mr Mazepin and other individuals along with a number of related companies including one called Eurotoaz, which is registered in Dublin.
Eurotoaz was allegedly central to Mr Mazepin's plan to take control of ToAZ by improper means with the assistance of the other individual and corporate respondents in the case.
Dublin hearing
Pending hearing of the case in Dublin, the High Court is being asked by the Caribbean-registered ToAZ owners to find UCCU and Mr Mazepin guilty of contempt of court by breaching undertakings given in 2019 not to enforce a Russian judgment against the plaintiffs or their agents pending the determination of the Dublin case.
The UCCU respondents deny the claims and say a bankruptcy action they brought in Russia against Sergi Makhlai, the former chairman and shareholder in ToAZ, did not breach the undertakings.
As a result of the bankruptcy action, the ToAZ owners claim, shares in ToAZ held in a Russian bank were auctioned off earlier this year to another Mazepin-controlled company called Kai at a deflated value.
The ToAZ owners say the issue of who owned the shares is a smokescreen because the High Court undertakings were breached once any steps were taken to enforce a June 2019 €1.2bn Russian court judgment against the ToAZ plaintiff companies, including the sale of ToAZ shares.
Eoin McCullough SC, for the ToAZ owners, said Mr Mazepin, as the principal in UCCU, was behind the moves to take control of ToAZ, which began when he (Mazepin) used his minority shareholding in the firm to engage in improper civil and criminal lawsuits against ToAZ and its majority shareholders in Russia.
'Raider attacks'
They are known as "raider attacks" and are an approach to business well known in Russia.
The raider attack was designed to devalue ToAZ and involved pressure being brought on judicial authorities in that country to bring prosecutions which ultimately led to UCCU and Mr Mazepin gaining control of ToAZ, he said.
When ToAZ brought conspiracy-to-defraud proceedings in Dublin against the UCCU respondents, the Russian judicial process was speeded up and the €1.2bn judgment was obtained against the plaintiffs, counsel said.
ToAZ then applied for injunctions in Dublin preventing UCCU from enforcing that judgment but those proceedings were settled on the basis of undertakings that UCCU would not seek to enforce the judgment pending determination of the full case, he said.
However, UCCU decided to seek the bankruptcy of Mr Makhlai in Russia and a bankruptcy administrator decided ToAZ shares held in a Russian bank formed part of the Makhlai estate. This led to the sale of some 70 per cent of ToAZ shares to Mr Mazepin’s Kai company, it is claimed.
This, Mr McCullough said, was an "egregious breach" of the Dublin undertakings, he said.
It was a contempt of court which continued over a prolonged period and was quite deliberate, he said.
"It was a plan brought to fruition in a period of 16 months in circumstances where they knew full well what they were about", he said.
The case continues in a hybrid Trialview/physical hearing before Mr Justice Mark Sanfey.
