CLIVE FREEDMAN QC AND DAVID LASCELLES SUCCEED IN €50MILLION JOINT VENTURE DISPUTE

Clive Freedman QC and David Lascelles appeared for the successful Defendant in Sax v Tchernoy [2014] EWHC 795 (Comm), instructed by Mischon de Reya. Judgment was handed down by the Commercial Court (Mr Justice Hamblen) on 26 March 2014.

The €50million claims were brought by Mr Sax (an American lawyer and businessman) against his alleged joint venture partner, Mr Tchernoy, a Russian entrepreneur and philanthropist who had achieved considerable success in the aluminium industry. The case concerned whether the English Court had jurisdiction to deal with this case against Mr Tchernoy and in particular whether Mr Sax could show a good arguable case that there was a contract subject to English law.

The dispute related to a proposed project to acquire land and develop a luxury hotel and golf resort in Sardinia. The parties had signed a Memorandum of Understanding. The Commercial Court found that there was no jurisdiction because there was no binding contract: there was no intention to create legal relations and any contract would have been too uncertain to be enforceable. The Court also found that Mr Sax could not establish any losses and would not have permitted a case to go forward on the basis of nominal damages.

Mr Sax’s claim that English law governed was also rejected. The decision is the first to consider whether a choice of law can be inferred from an express choice in a draft (rather than concluded) related agreement.

In the context of CIS related litigation based on putative joint ventures, the case is an interesting demonstration of the approach of the Court to contested evidence of whether there was a concluded contract forming a basis to give jurisdiction to the English Court.

Please click here to see the judgment.