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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> New Media Holding Company LLC v Kuznetsov [2016] EWHC 360 (QB) (26 February 2016) URL: http://www.bailii.org/ew/cases/EWHC/QB/2016/360.html Cite as: [2016] EWHC 360 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		26 February 2016

MRS JUSTICE SIMLER DBE :

Introduction

1. This claim arises out of a venture involving investors in a group holding company incorporated for the purpose of their investment as SIA Energokom ("Energokom"), a Latvian registered company. The group comprised companies providing services in the atomic energy sector in Ukraine to government owned energy companies, and was originally wholly owned (before the investments described below) directly or indirectly by Mr Ivan Kuznetsov, the Defendant, a Russian businessman with interests in the energy sector in Russia and Ukraine, and who has specialised in developing businesses related to atomic energy. One of the investors in Energokom was Mr Vladimir Gusinski, an international businessman with interests in several industry sectors.
2. Mr Gusinski and Mr Kuznetsov signed a document on 27 January 2010 (the "Term Sheet") pursuant to which Mr Gusinski claims that he was granted by Mr Kuznetsov, a redemption right in relation to Energokom shares. In 2012 Mr Gusinski sought to exercise that right by a demand by letter dated 17 October 2012 (referred to below as "the Notice") that Mr Kuznetsov purchase the relevant shares, but Mr Kuznetsov failed to do so.
3. On 28 December 2012 Mr Gusinski assigned the relevant rights to the Claimant, New Media Holding Company LLC, a company he owns and controls. The Claimant pursues this claim in debt as assignee.
4. The issues that arise accordingly are whether the Term Sheet gave rise to a legally enforceable redemption right. If it did not, the claim fails. If it did, the next issue concerns whether the Notice constitutes a valid exercise of the redemption right granted by Mr Kuznetsov to Mr Gusinski so that the failure to comply with it can be enforced by an order for payment of the price of the shares together with interest. If the Notice was invalid and/or unenforceable, Mr Kuznetsov contends that so too must be the claim for payment under it.
5. The Defendant's case in summary is that the Term Sheet was not legally enforceable because (i) it was never intended to be legally binding, there being no intention to create legal relations; and/or (ii) it was not supported by any or proper consideration on the part of Mr Gusinski. In any event, even if it was, the Notice is invalid because (i) it failed to identify which shares Mr Kuznetsov was being required to purchase; (ii) it was being applied to shares not covered by it; and (iii) the Notice was seeking to bring about a transfer of shares whose validity could be challenged by the other shareholders (because their pre-emption rights in relation to those shares under Latvian law had not been complied with).
6. In addition to many lever arch files of documents, including the contemporaneous contractual and other documents setting out the parties' agreements, intentions and on occasion, aspirations, I heard evidence from Mr Gusinski on behalf of the Claimant, and from Mr Kuznetsov and Mr Kagalovsky (another investor) for the Defendant. English is not the first language of any of these gentlemen. They were all assisted by interpreters, though Mr Kuznetsov and Mr Kagalovsky were more reliant on interpreters than Mr Gusinski.
7. Expert evidence on Latvian law was adduced by both sides because although the Term Sheet is governed by English law, Energokom is a Latvian registered company and Latvian law affords statutory pre-emption rights to shareholders in Latvian companies. Ms Eva Berlaus produced a report dated 30 July 2015 with 13 attachments on behalf of Mr Gusinski; Mr Lauris Liepa produced a report dated 2 September 2015 with 12 attachments on behalf of Mr Kuznetsov; and their Joint Statement is dated 2 October 2015. Both experts are eminently well qualified to express the opinions they do and there is a substantial measure of agreement between them as reflected by their Joint Statement. At Mr Kuznetsov's sensible instigation, the parties agreed not to call the expert witnesses to provide oral evidence to the court on the basis that the relevant Latvian law and authorities are available (together with the expert reports) and enable this court to reach its own view on points of disagreement.
8. The experts agree that the absence of any reference to the pre-emption rights afforded to other shareholders by Article 189 of the Latvian Civil Code in the Term Sheet does not render the Term Sheet void or invalid, and does not itself amount to a breach of Article 189. Shareholders not afforded statutory pre-emption rights under Latvian law may have a number of potential remedies: the right to claim redemption from the original acquirer once the transfer had occurred; the right to claim damages from the seller for losses caused as a result of the failure to offer the opportunity of exercising pre-emption rights; and the right to challenge the validity of the share transfer agreement. The experts also agree that the demand letters sent by the Claimant's solicitors to Energokom and the other shareholders did not comply with the formal requirements set by Latvian law for a request to consider pre-emption rights. The experts disagree about other matters to which I shall return below.
9. At the conclusion of the evidence in November 2015 an application was made by Mr D'Cruz, counsel for Mr Kuznetsov, to adjourn the trial to enable Mr Kuznetsov to provide disclosure in relation to the funding he said he provided to Energokom (that matched the funding provided on Mr Gusinski's side) which was said to have been challenged for the first time on behalf of the Claimant in opening, so that no earlier opportunity had been available to obtain and disclose such documents. That contention was disputed by the Claimant and the application was resisted. I concluded that the question of funding was sufficiently important both to the question of the legal enforceability of an earlier document known as the Road Map with consequences for the enforceability of the Term Sheet, and to credibility more generally, that I acceded to it. I made an order dated 17 November 2015 for disclosure on the issue of the funding Mr Kuznetsov "claims to have provided or facilitated for the Energokom Group between 1 January 2008 and 31 December 2012", to include proportionately focussed categories of document specifically identified by it ("the Disclosure Order").
10. The trial resumed on 27 January 2016 and Mr Kuznetsov gave evidence pursuant to a third witness statement exhibiting the funding disclosure he had provided. The Claimant also gave some disclosure on the funding issue, but called no further evidence. I address this evidence and its significance for the issues in dispute below.

The witnesses

11. Mr Gusinski was born in Russia and currently has Israeli and Spanish nationality. He is an experienced businessman specialising in the media sector, having developed Russia's first private television network, a satellite communication network and various radio stations. He is also an experienced investor with business interests in the United States and Ukraine as well as other parts of the world.
12. Mr Kuznetsov is a Russian citizen. He is a physicist by training and as an academic physicist has participated in scientific research in the field of atomic energy. He first became commercially involved in the atomic energy industry in 1999 and from then on became involved as an investor in companies operating within the atomic energy industry in Ukraine. In 1999 a Latvian company wholly owned by Mr Kuznetsov, SIA AMTO ("AMTO"), purchased a controlling interest in an entity known as Eyum-10 based in Ukraine. He describes in his first witness statement how the core business of Eyum-10 expanded organically between 2001 and 2005 through the incorporation of new companies providing additional services to the atomic energy industry in Ukraine, ultimately forming part of the group of companies that became Energokom following incorporation on 15 October 2007. Mr Kuznetsov also describes how when he first invested in Eyum-10 in 1999 and at all times since then, he has had a business partner as a joint investor in the group of companies, Mikhail Timofejevs. In addition to his involvement in the energy sector, Mr Kuznetsov is also a shareholder and director of Bank Tavrichesky in St Petersburg and an experienced, sophisticated international businessman.
13. Mr Konstantin Kagalovsky gave evidence on behalf of the Defendant. He too is an international businessman. There is no dispute that he and Mr Gusinksi fell out in the Autumn of 2009 leading to substantial litigation between them. From about late November 2009, all contact and cooperation between the two men ceased. In a judgment dated 16 August 2012 a New York Court found that Mr Kagalovsy had unlawfully diluted Mr Gusinski's interests in the Ukrainian television station in which they had both invested. Judgment was awarded in favour of Mr Gusinski and the Claimant and a sum in the region of US$30m was subsequently paid. The Court rejected Mr Kagalovsky's testimony as not credible on a number of issues including the question whether he negotiated the terms of certain agreements. Mr Kagalovsky's appeal failed, as did applications made by him to prevent enforcement of the judgment. Before me, Mr Kagalovsky's evidence appeared to be directed at advancing argument on behalf of Mr Kuznetsov, rather than being limited to facts within his own knowledge. Given that and the history of his relationship with Mr Gusinski, I treat Mr Kagalovsky's evidence with caution where it conflicts with other evidence and is unsupported by other reliable evidence.
14. So far as concerns the evidence of the two main protagonists in this litigation, I find Mr Gusinski to be straight forward and frank. He sought to give careful, precise answers to questions asked of him and was anxious to avoid misleading the court. Where he was unable to recall something, he said so. Where his recollection was mistaken, he was prepared to accept this. On the central issues however, his evidence remained unshaken. It was internally consistent, rational evidence and was also consistent with contemporaneous documents where these were available, and was supported by Mr Kuznetsov's evidence on some significant matters. I conclude that he is a reliable witness and where his evidence conflicted with evidence given by Mr Kuznetsov, I preferred his evidence.
15. For reasons that will become apparent in my treatment of the facts, I find Mr Kuznetsov unreliable, and save where his evidence is not disputed, or is supported by contemporaneous documents, I am unable to rely on it. It seemed to me that Mr Kuznetsov was prepared to say whatever he thought would help his case, irrespective of the truth of the facts he was advancing, and to change his evidence completely where that suited him. At times the evidence he gave made little commercial or rational sense; at times it was quite simply, not credible.

The Facts

16. To some extent the facts are agreed, or contemporaneous documents make clear what occurred, and record written agreements when they were reached. The inferences to be drawn is in dispute. I set out below my findings of fact based on the evidence I accept, so far as necessary to resolve the issues in the action. I cannot and have not addressed every factual dispute or issue raised by and between the parties, but have had regard to all the evidence they have provided in reaching my conclusions.

(i) Initial investment in Energokom by Mr Gusinski and Mr Altman

17. Mr Gusinski was first introduced to the possibility of investing in what was to become Energokom in the first half of 2007 by Alexander Altman (an old business acquaintance). Mr Kuznetsov told Mr Gusinski that he owned a group of companies dealing with energy projects in Ukraine and invited both Mr Gusinski and Mr Altman to invest in the group, subsequently consolidated as Energokom. Mr Gusinski had no previous experience in the field of nuclear energy nor in the provision of services of the sort undertaken by this group, but regarded this as an interesting venture investment. I accept his evidence that his interest in becoming involved was purely as an investor, and he had no intention of becoming involved in day to day management.
18. During the discussions leading to his investment, Mr Kuznetsov told Mr Gusinski that the group's subcontracts were and would remain highly profitable and as a result the investment would generate a good and speedy return. He presented to Mr Gusinski a valuation of the group of companies of US$20m, believing this to be a conservative estimate. On that basis an investment of US$1m would represent a 5% shareholding and this was the basis of Mr Gusinski's subsequent investment.
19. Upon its incorporation, the shares in Energokom were registered in the name of Leonid Krizhanovsky as nominee for Mr Kuznetsov. Mr Kuznetsov describes Mr Krizhanovsky as follows:

"Mr Krizhanovsky is an independent businessman providing consultancy and company administration services to corporate and individual clients. Before the incorporation of Energokom, from time to time, Mr Krizhanovsky provided consultancy services to me and over the years we built a relationship of trust. At the time of incorporation of Energokom, Mr Krizhanovsky held its shares on my behalf and for my benefit. He was a first subscriber for Energokom shares that were subsequently re-registered to the relevant shareholders controlled by me, Mr Gusinksi, Mr Altman and Konstantin Kagalovsky. I paid him a fee for this service. Mr Krizhanovsky was also appointed as the sole member of the board of directors of Energokom on incorporation, and he has remained the company's sole director ever since." [IK 1/44]

20. Mr Gusinski's evidence (which I accept) was that from the outset Mr Kuznetsov always described Energokom as "his company which he absolutely controlled and that the director, Leonid Krizhanovsky, was his nominee who would do exactly as [Mr Kuznetsov] directed": [VG 2/29].
21. Following meetings during the course of 2007 there were negotiations resulting in a detailed sale and purchase agreement dated 27 November 2007 ("the 2007 SPA") of shares in Energokom and Eyum-10. The parties to the 2007 SPA Mr Krizhanovsky and AMTO (together, the sellers) and Energy Consolidated Limited ("ECL"), an English company jointly owned and incorporated by Mr Gusinski and Mr Altman for the purpose (together, the purchaser). The 2007 SPA provided that:

i) in consideration for 5% of the shares in Energokom and 4.4% of the shares in Eyum-10, ECL would pay US$30,000 to Mr Krizhanovsky and US$100,000 to AMTO respectively.

ii) By clause 5 ECL undertook to lend to Energokom the sum of US$870,000, bearing interest at 7%, and by clause 5.3, the loan and all interest accrued thereon would be repayable by Energokom once it generated US$1m profits or 9 years from the date of the concluded sale and purchase agreement (i.e. 27 November 2016), whichever was the earlier.

iii) By clause 6 ECL was granted options to buy additional shares; and by clause 7 detailed rights of first refusal and tag along were set out.

iv) There was a governing law clause conferring exclusive jurisdiction on the English Courts, and a 'whole agreement' clause.

v) Mr Kuznetsov signed the agreement undertaking "to be fully responsible to (sic) all the undertakings …made by the Sellers" under the SPA 2007.

22. Although the 2007 SPA contains a whole agreement clause and provides expressly for a loan of US$870,000 from ECL, Mr Kuznetsov maintains that

"all three of us [Mr Gusinski, Mr Altman, and him] understood and agreed that US$870,000 was an amount that I should receive for selling my shares of the core business and that Energokom would pay this amount to me on the sale of the shares." [IK 1/39].

Mr Kuznetsov said in evidence that this agreement that US$870,000 would be treated as purchase price and not a loan, was an oral agreement not appearing within the terms of the 2007 SPA, but that it was regarded by him as binding nonetheless. In essence this was a package deal, part oral and part in writing. He also said that there was a further binding oral agreement (that contradicts clause 5.3) to the effect that there would be no repayment of the loan unless the profits target was reached. I do not need to resolve whether these oral agreements were in fact reached. The significance of this evidence is that it shows that Mr Kuznetsov was familiar with, and happy to proceed on the basis of 'package' agreements reached partly in writing and part orally.

23. Pursuant to the 2007 SPA, Mr Gusinski made a payment of US$1 million through his company, the Claimant, and 5% of the shares in Energokom were transferred to ECL. Mr Altman did not have the financial means to fund his half share of the investment and, therefore, borrowed his share (US $500,000) from Mr Gusinski. The remaining 95% of the shares in Energokom were held by Mr Krizhanovsky.
24. It was suggested by Mr Kuznetsov in his evidence (though accepted by him that this was based on assumption), that Mr Altman represented both his own and Mr Gusinski's interests thereafter, and was in effect Mr Gusinski's nominee in relation to Energokom. I do not accept this evidence. It is disputed by Mr Gusinski who maintains that Mr Altman is an independent businessman and although a close acquaintance, is not and has never been his nominee. Mr Kuznetsov relies on two sets of minutes of meetings of the founders or shareholders of Energokom, dated 22 March 2010 and 20 March 2011, identifying Mr Altman as attending on behalf of three companies in which he, Mr Gusinski and Mr Kagalovsky held their interests in Energokom (Wain Holdings Ltd ("Wain"), Bedford Asset Management LLC ("Bedford") and Trumia Enterprises Limited ("Trumia")) to support his case that Mr Altman was Mr Gusinski's nominee. Though signed by others present it is notable that neither set of minutes was in fact signed by Mr Altman, and although I was told that enquiries would be made for a signed version, none was provided. By the time of the 2011 minutes, relations between Mr Gusinski and Mr Kagalovsky had broken down completely (with Wain in deadlock) as a result of the separate dispute between them, and I regard it as highly unlikely that Mr Kagalovsky would have been happy for his interests (through Wain) to be represented by Mr Altman.
25. In his written evidence as originally presented, Mr Kuznetsov stated that Mr Altman in "effect came to control all critical finance functions of the Energokom group and was responsible for distribution of foreign investments to the Ukrainian companies within the group" by becoming a director of A Trade Ltd ("A Trade"), a company incorporated in Ukraine, and this role gave Mr Altman de facto control and management of the Energokom group (IK1/54). This contention was put to Mr Gusinski in cross-examination, and was rejected by him: he could not understand how becoming a director of A Trade would give Mr Altman control of Energokom; in his view, the director of Energokom was always Mr Krizhanovsky, whom he never met or spoke to; and he pointed to the fact that a Mr (in fact Ms) Marchenko (and not Mr Altman) signed a credit agreement as director of A Trade dated 8 May 2009. Subsequently, when he came to give oral evidence, Mr Kuznetsov substituted the word 'shareholder' for 'director' where it appeared in relation to Mr Altman and A Trade in his statement. He had no sensible explanation for how he came to make this 'error' and nor could he explain how a shareholding in A Trade afforded Mr Altman control of "all critical finance functions" of Energokom. I regard this as an example of Mr Kuznetsov altering his evidence to suit his case.
26. I accept that Mr Altman had a day to day management role of Energokom in Ukraine but this was at Mr Kuznetsov's instigation, and not at the instigation of Mr. Gusinski.
27. In about February or March 2008 Mr Kuznetsov was introduced by Mr Altman to Konstantin Kagalovsky, a business partner of Mr Gusinski in relation to his investment in a Ukrainian television station, TVi. It was proposed and discussed that Mr Kagalovsky would join as an investor in Energokom on an equal basis with Mr Altman and Mr Gusinski. This was agreed to by Mr Kuznetsov and the arrangement was effected by assigning the shares held by ECL in Energokom to a Cypriot company, Wain (in which the three had equal interests). The assignment was effected by a Deed of Assignment dated 15 October 2008, and the relations between the shareholders were regulated by a shareholders agreement dated 16 October 2008.
28. Mr Kagalovsky's investment did not directly result in new funds being introduced to Energokom. Rather, he bought out part of the pre-existing interest in Energokom held by Mr Gusinski and Mr Altman, by paying Mr Gusinski US$500,000 (through the Claimant) some of which was used to purchase Energokom shares owned by ECL. As part of this new arrangement a series of agreements were entered into: a written loan agreement dated 13 November 2008 and a sale agreement dated 1 December 2008.
29. The sale agreement dated 1 December 2008 between Mr Krizhanovsky, as seller and Wain as buyer, provided for Wain to acquire a further 11.7% of Energokom, bringing its total holding, in conjunction with the 5% it had received by way of assignment from ECL, to 16.7%. The consideration for that sale agreement was dealt with expressly at paragraph 3 as US$470. Nevertheless Mr Gusinski accepts that part of the reason for the additional share transfer was a downward valuation of Energokom from US$20m to $6m.
30. So far as concerns the 13 November 2008 loan agreement by which Wain agreed to lend US$350,000 to AMTO, with interest payable at 18% per annum, to be repaid no later than 25 January 2009, signed by Mr Kuznetsov as personal guarantor of AMTO, Mr Kuznetsov explains that he signed the loan agreement as a guarantor "because AMTO was a company wholly owned by me." [IK2/14-16] In cross-examination he confirmed that AMTO is "his personal company". Despite that, it was Mr Kuznetsov's evidence that the loan was advanced to AMTO instead of Energokom for administrative purposes only and that in fact the sum was advanced to the Energokom group, but not because the group needed money – "it needed no additional cash at the time because it was already financed with my personal money" – Day 3/108/16. He maintained that this was a freestanding agreement not connected to any other agreements and primarily put in place to allow Mr Gusinski and Mr Kagalovsky to earn some interest without risk.
31. This is disputed by Mr Gusinski, who said (and I accept) that this loan agreement was linked to the 1 December 2008 sale agreement, and that it led him to think that Mr Kuznetsov was financially strained since he took this loan at 18% interest. I find it inherently improbable that Mr Kuznetsov would seek a loan at such a high interest rate unless it was genuinely needed, and I reject his evidence that this was simply done as an attractive way for Mr Gusinski to make a short term profit without risk, and not in any way because the money was needed, whether by him personally or by Energokom.
32. At about the same time (in December 2008) Mr Krizhanovsky transferred a 73% interest in Energokom to Larden Limited ("Larden"), a company registered in Belize and wholly owned and controlled by Mr Kuznetsov. There is no dispute about that, but Mr Kuznetsov says that Mr Krizhanovsky also transferred a further 10% interest in Energokom to Mikhail Timofejevs, previously held by Mr Kuznetsov on trust for Mr Timofejevs. There is nothing in writing to support this transfer. It is inconsistent with an email dated 22 April 2010 from Anton Emelyanov, Mr Kuznetsov's Head of International Law, to Mr Altman, setting out changes in the Ukrainian structures, in which he identifies the shareholders of Energokom as including "Group of Ivan Kuznetsov's companies – 83%". But if true, it is clear that neither Wain nor Mr Gusinski were offered pre-emption rights before the share transfer to Mr Timofejevs in 2008, despite the express terms of the 2007 SPA.
33. As a result of this series of transactions, by the end of 2008, the shares in Energokom came to be held as follows: (i) Larden and/or Mr Kuznetsov directly or indirectly: 73% or 83% (with 10% possibly held by Mr Timofejevs); (ii) Wain: 16.7%; and (iii) ECL: 0.3%.

(ii) The Road Map

34. It is common ground between the parties that in January 2009, Messrs Kuznetsov, Gusinski, Altman and Kagalovsky met to discuss their plans for Energokom. They discussed funding of Energokom because it was apparent that a significant injection of operational capital was needed.
35. Their discussions were recorded as notes that formed the basis of a document prepared by Mr Kuznetsov (and signed by all four men) entitled 'Road Map' (and referred to as "the Road Map"). Although there is a dispute between the parties to this claim as to whether the Road Map was contractually binding, as a matter of fact neither Mr Kuznetsov, Mr Kagalovsky nor Mr Gusinski regarded it as legally binding. Mr Kuznetsov described it as an understanding or a moral undertaking that was intended to be (and was in fact) passed to lawyers for them to draw up a legal document, but was never finalised. Mr Gusinski described it as a plan for development – an aspiration or understanding as to the future and how to keep Energokom afloat. Mr Kagalovsky described it as an "honourable thing to stick by".
36. Since considerable reliance is placed on it by Mr Kuznetsov, it is helpful to set the Road Map out in full. As translated from Russian, it provided:

"Party 1 (K.Kagalovsky, V.Gusinsky, A.Altman) and Party 2 (I.Kuznetsov) have agreed as follows:

1. Party 1 shall receive ownership of an additional 33% of shares in the core assets (i.e, a total of 50%).

2. Upon each receipt of dividends, Party 1 shall deduct half of its dividends as payment for the 33% of shares in core assets until such time as the amount of the said deductions reached USD 2 million (the value of the 33% stake).

3. Party 1 may not sell its shares until it has paid in full for the core assets.

4. In the event that the company is short of working capital, Parties 1 and 2 shall provide it with lending resources on identical terms on a 50:50 basis.

Addendum 1.

Party 1 agrees to finance Mr Altman with his own withdrawable dividends. If the amount of dividends is less than $250,000 a year, Party 2 shall participate accordingly in lending to Mr Altman.

Note: By "withdrawable dividends" we mean the part of dividends that is not applied towards payment for the core assets.

Addendum 2.

Distribution of current profit

The Parties have decided to pay out dividends in the amount of USD 656,000

50% - USD 328,000 shall be received by Party 2

50% - USD 328,000 shall be received by Party 1

Party 1 shall contribute half of its dividends USD 164,000 towards payment for the shares in core assets.

Party 1 shall receive withdrawable dividends as follows:

1) USD 64,000 shall be transferred to Wain

2) USD 100,000 shall be transferred to accounts controlled by A.Altman

Based on the amount of withdrawable dividends received by Party 1, each of the shareholders of Party 1 shall receive USD 54,666.

Thus, if the money for Wain is used only by Messrs V.Gusinsky and K.Kagalovsky, the amount of A.Altman's credit facility shall be USD 45,334.

(Signatures)"

37. It is clear from emails passing between respective lawyers (Anton Emelyanov for Mr Kuznetsov and Yaron Kupfer, Mr Gusinksi's lawyer) that the Road Map was passed to the lawyers, and a draft agreement implementing the "key theses" was produced and circulated for comment. The draft agreement identified the parties to the formal agreement that would follow as Larden, Wain and Energokom, rather than the individuals personally.
38. Messrs Gusinski, Altman and Kagalovsky are together referred to as Party 1 in the Road Map. This was not, as Mr Kagalovsky asserted, intended to reflect a common understanding that the three individuals named as Party 1 should be treated equally in respect of their involvement in Energokom. Rather, I am satisfied that taken as a whole, the document was intended to be read and understood as referring to them in their capacities as joint shareholders of Wain, and not in their individual capacities. That is reflected in the understanding the two sides' lawyers came to have when seeking to draft a formal agreement subsequently. It is also consistent with other parts of the Road Map which provide for Party 1 to "receive ownership of an additional 33% shares" and that on receipt of dividends "Party 1 shall deduct half of its dividends" and "may not sell its shares". Addendum 2 refers to Party 1 contributing "half of its dividends towards payment for the shares.." and to "each of the shareholders of Party 1.." receiving a payment.
39. The intention set out in the Road Map was that Wain would receive an additional 33% shareholding in Energokom, with the price for these shares identified as US$2m which would be paid for by deducting (for the benefit of Mr Kuznetsov) half of the dividends payable in relation to these shares until these deductions reached US$2m (paragraph 2). In the event that Energokom found itself short of working capital, Wain and Mr Kuznetsov would provide it with the relevant funding on identical terms on a 50:50 basis.
40. However, it is common ground that no legal agreement by reference to the Road Map was ever finalised or signed, and I find that it was superseded by critical events that followed. I return to the question whether it was or became legally binding after considering the provision of relevant funding to Energokom below.
41. During 2009, it is common ground that the crisis in Ukraine worsened and that Energokom was left without the income it had anticipated as a result of serious defaults by contracting parties.
42. By May 2009 Energokom was in urgent need of funds to cover operational costs. Mr Kuznetsov agreed that this was the context for his request that Wain fund a further short term loan to Energokom. That request was agreed to by Wain and by a written loan agreement dated 17 May 2009 Wain made a further loan to Energokom of US$1.05m repayable no later than 22 December 2009 ("the Wain May 2009 loan"). On 25 May 2009 (as appears in Energokom's bank statements) US$1.05m was paid by Wain to Energokom. The funding of this loan was provided in equal shares to Wain by Tomkins Limited (on behalf of Mr Kagalovsky) and by Ajax Capital ("Ajax") (a Moscow based financial institution), arranged by Mr Gusinski.

(iii) Matched funding said to have been provided by the Defendant pursuant to the Road Map

43. It was Mr Kuznetsov's case when the trial commenced that following and pursuant to the Road Map, Messrs Gusinski and Kagalovsky provided initial funding to Energokom through the Wain May 2009 loan in accordance with the understanding under the Road Map that they would co-fund its working capital requirements along with him; and that he provided matched funding of Energokom in the form of a loan agreement provided by Datacom International LP ("Datacom") and A Trade dated 8 May 2009, and additionally by loan agreements by which contributions to Energokom were made "directly by my companies, mainly Datacom and AMTO".
44. In both written and oral evidence Datacom was repeatedly described by him as "my company". Mr Kuznetsov said that by means of a revolving credit facility, Datacom agreed to provide a loan to A Trade of US$2.025m, and that A Trade was in control of the money flow in the group and "directed funds to other companies within the Energokom group by way of loan agreements or in some cases would pay their liabilities directly.." (IK 1/107 and 108). The impression given, both in the witness statement and in his oral evidence by Mr Kuznetsov was that at least US$2m had been provided in May 2009 which more than matched the $1m provided by Wain.
45. There is no doubt that the Datacom/A Trade agreement of 8 May provides a credit line by which A Trade can call down funds from Datacom but at trial there was no evidence of any funds actually being provided to Energokom pursuant to that credit line. Nor was there any document evidencing the separate loan agreements to which he referred.
46. In correspondence before trial the Claimant's solicitors, GSC Solicitors ("GSC"), made a request of Simmons & Simmons (the Defendant's solicitors) for "full details on Datacom International LP …, including the bank statements." Mr Kuznetsov explained in oral evidence that this request was passed to him but was refused

"since Datacom was engaged in rather large scale activities, comprehensive activities, which had nothing to do with the Ukrainian holding, and it involved the interest of other shareholders, not just me; to provide this information would have meant that an agreement and consent from all the other parties would have been necessary. I think it is very complicated and difficult, because it could have been commercially sensitive and private."

Mr Kuznetsov was reminded that he said Datacom was 100% owned by him, and he maintained that evidence. He was asked if he was unable to access and provide Datacom bank statements if he wished to do so. His answer was:

"what I did mean is that of course there was management, the management team who had share options, because Datacom has this facility for the management, and in any case the company deals extensively with issues far beyond Ukraine."

He explained that when he referred to shareholders he meant the top management team (at Datacom) who had share option schemes. He was asked again whether he had the ability to access and provide Datacom bank statements and answered that it was possible to do so and that obtaining information on Datacom accounts was possible. The reason it had not been done was:

"we did not consider it relevant and there was no issue whatsoever in providing this information, with the exception that we would have had to identify and pinpoint the information relating to Ukraine alone." (Day 4/7-9)

47. Mr Kuznetsov maintained his position in the course of giving oral evidence that the A Trade/Datacom agreement supported his case that he provided funding for Energokom that matched the Wain May 2009 loan funded by Mr Gusinski and Mr Kagalovsky. He said he did so pursuant to the Road Map which he regarded as imposing a binding moral obligation to make the funding contribution required.
48. Mr Kuznetsov also advanced an alternative case, for the first time during cross-examination, that he actually started putting money into Energokom to assist it before May 2009, and had done so "from the very signing of the Road Map", "to begin with in small sums" (Day 3/120) but "by the time the credit of US$1.05m was issued by Wain, this meant that from my side the financing or the contribution had already reached this level" (Day 4/13). Mr Kuznetsov was adamant that he had documents to support this alternative case, but had not considered them relevant.
49. The documentary evidence available when the trial started (including a funding schedule prepared on Mr Kuznetsov's behalf at C/2 which expressly referred to Datacom as 100% owned by him) showed that the first advance of any funding to Energokom after the Road Map was signed was pursuant to the Wain May 2009 loan. This is reflected in the Energokom bank statements disclosed by Mr Kuznetsov initially, showing a transfer from Wain to Energokom on 25 May 2009 of US$1.05m, and covering the period 1 May 2009 to 31 December 2011, and not any earlier period.
50. Following the Disclosure Order, Mr Kuznetsov's own Table 3 demonstrates that only US$100,000 was advanced by Datacom to A Trade in May 2009 and that there is no basis in fact for his contention that the funding provided by Wain pursuant to the Wain May 2009 loan was matched by him (directly or indirectly) through this route, whether pursuant to the Road Map or otherwise by the time the Road Map was signed. Even by reference to the period between the signing of the Road Map and the Term Sheet, although small amounts of money were provided from time to time, there was nothing that could be described as a matching of the funding provided by Wain.
51. Moreover, in providing disclosure following the Disclosure Order, Mr Kuznetsov represented by reference to the A Trade bank statement for the period 26 May 2009 to 3 November 2010 (the only statement disclosed by him despite the Disclosure Order requiring disclosure for the period up to 31 December 2012) that he had provided substantial funds (amounting to US$1.7m) to Energokom via A Trade and Datacom up to 4 November 2010. He failed however to disclose the fact that during 2011, the funding position was reversed and Datacom received substantial sums from A Trade (as the later bank statements disclosed by the Claimant demonstrate). Those later payments altogether undermine the contention that Mr Kuznetsov provided matched funding through this means as he asserted.
52. So far as Datacom itself is concerned, the Disclosure Order required bank statements and disclosure in relation to it as a wholly owned company of Mr Kuznetsov. No disclosure whatever was provided. In his third witness statement Mr Kuznetsov states that he made a mistake in referring to Datacom as "my company" and in the reference to it in his schedule at C/2 as 100% owned by him. He says:

"By that I meant that Datacom was a vehicle through which, amongst other things, I provided funding to Energokom … [Datacom] was, though a company not owned by me, but provided by a corporate services provider, Mr Krizhanovsky. I am not aware who the shareholders of this vehicle are. …"

No credible explanation is given for this further 'mistake' by him. I find it hard to accept it as a simple mistake, particularly in light of the reasonably detailed evidence Mr Kuznetsov gave about the management team of Datacom having share options, and the repeated written references in his own statement to it as "my company". Moreover (even accepting that Datacom may be dormant) the early confidence expressed by Mr Kuznetsov about being able to produce documents relating to Datacom was apparently misstated by him to such an extent that he has not managed to disclose (whether directly or with the assistance of Mr Krizhanovsky who did not give evidence) a single document from Datacom.

53. There is a strong inference to be drawn that in putting forward disclosure of an A Trade bank statement for 26 May 2009 to 4 November 2010 (which Mr Kuznetsov said he just happened to have in his or Energokom's possession), Mr Kuznetsov has not only sought to avoid disclosing bank statements of A Trade which would have revealed the true position, but has felt unable to disclose bank statements or other records from his company Datacom, which would if disclosed have revealed the funding received by Datacom from A Trade in the subsequent period.
54. So far as the alternative case advanced in oral evidence by Mr Kuznetsov is concerned, nothing was provided by way of further disclosure to support this case; nor was it advanced in evidence in Mr Kuznetsov's third witness statement. It simply melted away and I am driven to conclude that these are all examples of Mr Kuznetsov's willingness to say whatever he thinks will help his case, without regard to the truth or accuracy of the particular point he is advancing.
55. Furthermore, the Energokom bank statements disclosed before the trial on behalf of Mr Kuznetsov, show that almost immediately after the Wain May 2009 loan payment was received into Energokom's bank account, a substantial transfer out of Energokom's bank account (US$500,000) was made to a company called Peltier Investments Ltd ("Peltier"), followed by further payments throughout February 2009 to Peltier.
56. In correspondence on 1 September 2008, Peltier is described by Mr Emelyanov in response to questions from Mr Kupfer as "our affiliated company". Nevertheless, requests on behalf of the Claimant for disclosure in relation to Peltier were refused before trial on the basis that no pleaded issue arose in relation to Peltier (which is not identified by name in either of Mr Kuznetsov's first or second witness statements). In correspondence Simmons & Simmons explained in relation to Peltier:

"the company was provided by Mr Krizhanovsky who is an independent provider of corporate support services to corporate clients for the purpose of distribution or redistribution of funds within Energokom, in particular the financing of the underlying Ukrainian companies of the group as requested from time to time by the relevant managers and approved by Mr Altman."

57. Mr Kuznetsov adopted and maintained that explanation regarding Peltier during oral evidence in November 2015. He described Peltier as "affiliated to Mr Krizhanovsky" (Day4/27). He did not disclose the fact that Peltier had been used by him personally as a vehicle through which to receive money he asserts was due to him personally, for example, by way of the purchase price of shares in Energokom sold to ECL under the 2007 SPA. Instead he gave the impression of familiarity with and knowledge of Peltier and its activities, stating:

"Peltier is a transit company through which money is transferred to Ukraine. It is not engaged in any business activities as such."

58. Mr Kuznetsov then gave the following account of how Peltier was able to avoid Ukrainian currency control restrictions, and channel funding to the Energokom group:

"A: In Ukraine, a company needs to have a currency licence to receive funds from abroad. A-Trade was the only company in the group which held a currency control licence, granted by the national bank of Ukraine and its only function was to re-direct funds to other Ukrainian companies in the group"

Q: Are you now saying that Peltier was able to direct funds to underlying companies within the group?

A: My Lady, may I just explain the situation as follows: There were two channels of financing. One was the direct bank transfers where the money was deposited directly from one bank to another and this was the channel purely run by A-Trade. There was another channel also when Ukraine was… when the Ukrainian company or Ukraine was receiving physical cash.

Namely, some companies in Ukraine were owed money by western companies, so they would deposit cash for that in Kiev to Mr Altman or Ms Marchenko. And Peltier would make a relevant mirror transaction abroad, as a payment.

So cash would end up in Kiev, but it was Mr Altman and Mr Marchenko who was controlling this cashflow and these transactions. So he would be directly liaising with Mr Krizhanovsky and they would specifically decide who and where would receive this cash, as part of the settlement transaction. It was… actually I had virtually nothing to do with it."

This explanation makes little commercial or rational business sense. It appears to involve potentially serious wrong-doing. No part of this explanation appears in any of Mr Kuznetsov's witness statements and nor was there, in November 2015, any documentary evidence to support this account. For example, there was no contemporaneous or other evidence of any written instruction to Peltier to make one of the asserted mirror transactions abroad, nor any record of a single payment by Peltier as a result.

59. By the time the trial resumed in January 2016 Mr Kuznetsov had been required to disclose Energokom bank statements dating back to 2008 (previously not disclosed on grounds of asserted irrelevance by his legal team) and these showed that between 20 February 2008 and 14 March 2008 Energokom transferred US$450,000 to Peltier ($470,000 having been paid to Energokom by ECL under the 2007 SPA). Mr Kuznetsov accepted in cross-examination that this reflected a payment from Energokom to himself personally, with Peltier used as the vehicle for making the payment to him. The inference I have drawn from the way this evidence has unfolded is that Mr Kuznetsov sought to hide payments to Peltier by failing to identify Peltier initially, by asserting that Peltier was not relevant to any pleaded issue and by refusing to disclose earlier bank statements for Energokom.
60. Mr Kuznetsov still maintains that Peltier served two purposes: as a vehicle to receive money for him personally, and to participate in the transfer of cash to Ukraine (as described above). Nevertheless, despite the Disclosure Order, Mr Kuznetsov has disclosed no documentary evidence to support his case that Peltier funded Energokom or distributed cash within Energokom; and has given no disclosure of bank statements relating to Peltier in the relevant period. Despite Mr Kuznetsov's apparent familiarity with Peltier and personal use of this company to channel funds to himself, despite Mr Emelyanov's email referring to Peltier as "our affiliated company", and Mr Kuznetsov's own evidence in November 2015 that Peltier is affiliated to Mr Krizhanovsky who controlled it, Mr Kuznetsov has not been able to produce any disclosure whatever from Peltier to substantiate his account. Moreover, his close associate, Mr Krizhanovsky, has not been able to prevent Simmons & Simmons sending information and document requests to the so-called "wrong Peltier" (based in Ireland); and when the so-called "right Peltier" based in the Seychelles was written to, the letter produced no response; and Mr Krizhanovsky has apparently done nothing to encourage the production of documents by his affiliated company. The result is that there is no independent evidence to support Mr Kuznetsov's account of undocumented (tax efficient) cash transactions by which Peltier provided funds to Energokom.
61. In these circumstances, I am unable to accept Mr Kuznetsov's account of Peltier's involvement in funding Energokom. The reasonable inference to draw from the documents and evidence I have seen is that the substantial payments made by Energokom to Peltier (as shown on the bank statements of Energokom) were payments to Mr Kuznetsov personally. I am not satisfied that Mr Kuznetsov provided any operational funding to Energokom before the signing of the Term Sheet. The inference I draw is that Mr Kuznetsov used Peltier to extract funds provided by Wain to Energokom under the Wain May 2009 loan. The documents that have been disclosed and that form the foundation for various tables and schedules of payments produced on behalf of the Claimant, show that the funds so extracted substantially exceed those provided by Datacom to A Trade during the relevant period.
62. I return to address Mr Kuznetsov's contention that the Road Map was legally binding. I do not accept it. My reasons in light of all the evidence, including the additional evidence produced pursuant to the Disclosure Order are as follows:

i) I do not consider that its terms and form are identical to those of the Term Sheet, described below. I do not therefore accept that the Road Map has the "same value" as Mr Kuznetsov put it (Day 3/113) or that if the Term Sheet is legally binding, it follows that so too must be the Road Map. The two agreements are different and involved different issues and parties. That one is legally binding does not entail a conclusion that the other one is too.

ii) None of the parties to the Road Map regarded it as legally binding at the time it was signed. It was an aspiration they as individuals were content to adopt, but it was merely aspirational.

iii) It was passed to respective lawyers who conducted negotiations based on its 'key theses', but these did not result in a concluded agreement. Following the breakdown in relations between Mr Gusinski and Mr Kagalovsky, the Road Map became unworkable in any event.

iv) Many of its provisions are uncertain: there is no provision for the terms of or timing in relation to loans or for identifying when Energokom would be "short of working capital" or how much would then be required by way of any suggested funding obligation.

v) Even had it been binding, I would have concluded that it was binding on Wain and not the individuals.

vi) The so-called funding obligation under the Road Map was not performed by Mr Kuznetsov. There is no reliable evidence that Mr Kuznetsov provided equal operational funding to Energokom in or before May 2009. Nor does the documentary evidence show that he provided equal funding at any time afterwards.

vii) The steps taken by individuals after May 2009, that reflected the aspirations set out in the Road Map, were taken pursuant to separately negotiated agreements, and not pursuant to the Road Map.

viii) An objective appraisal of the Road Map and the conduct of the individuals who signed it, leads to the conclusion that they did not intend it to be legally binding.

(iv) Discussions leading up to the signing of the Term Sheet

63. The repayment date for the Wain May 2009 loan was 20 December 2009 but Energokom was unable to repay the loan by this date. Mr Kuznetsov knew that he could not obtain replacement funding from Wain because of the breakdown in the relationship between Mr Kagaovsky and Mr Gusinksi, and Mr Altman was in no position to provide any funding. Mr Kuznetsov sought an extension of time for repayment but Mr Gusinski refused to agree and insisted that at least half of the loan be repaid to Wain so that it could repay Ajax. It is not in dispute that Mr Gusinski refused to confirm that he would provide the replacement funding requested for this loan. When pressed several times by Mr Kuznetsov to do so, his consistent response (on Mr Kuznetsov's evidence) was: "Repay the loan first and then we will see."
64. The result is that Mr Kuznetsov had to use his own funds (as he agreed) to repay half of the Wain May 2009 loan (representing the part of the loan funded by Ajax) and interest between 18 and 21 Dec 2009 and did so using funds provided by Datacom.
65. Soon afterwards, (again there is no dispute) Mr Kuznetsov began chasing Mr Gusinski (in several telephone conversations) to provide replacement funding. However, when he did so Mr Gusinski changed the topic and brought up discussion about his desire to exit Energokom. Because he and Mr Kagalovsky no longer had a common interest in Energokom, Mr Gusinski informed Mr Kuznetsov that he would only continue as a shareholder in Energokom if Mr Kuznetsov provided him with certain corporate governance rights and a redemption right in relation to his interest in Energokom. Mr Kuznetsov knew that if Mr Gusinski exited Energokom, this avenue of funding for Energokom would be closed to him.
66. The position is summarised on Mr Kuznetsov's behalf at paragraph 9 of the Re-Amended Defence as follows:

"In December 2009 [the Defendant] and Mr Gusinski entered into discussions about a mechanism by which Mr Gusinski (who was also considering advancing significant loans to Energokom) might receive certain temporary rights and preferences to protect his position as a minority shareholder. These proposed rights included both a right of redemption and certain corporate governance preferences in favour of Mr Gusinski."

67. In the course of the conversations that it is agreed took place about these issues, Mr Gusinski explained to Mr Kuznetsov that he was also unhappy with his investment in Energokom because he had originally expected it to produce quick and significant returns but that had not proved to be the case. He said he was uncomfortable about the investment in Energokom because of the deterioration in his relationship with Mr Kagalovsky over their ownership of the television channel in Ukraine. Ultimately, according to Mr Kuznetsov, Mr Gusinski told Mr Kuznetsov that he would only agree to continue to remain a shareholder of Energokom on certain conditions. Those conditions were that he would be provided with corporate governance rights to protect his minority interest and with a redemption right. Although Mr Kuznetsov agrees that these two conditions were discussed in the same conversations between the two, about replacement funding, nevertheless he contends that the discussions about replacement funding were separate and were run in parallel to discussions about the Term Sheet.
68. In his witness statement (IK 1/132] Mr Kuznetsov says:

"I wish to emphasise that the replacement funding of Energokom was not discussed in connection with Mr Gusinski's request to provide him with additional corporate governance rights and a redemption right. Nor did we ever discuss any facilitation of this funding or continuation of such facilitation, as alleged by NMH, … This is why there was not mention of financing in the term sheet."

69. The commercial context in which the Term Sheet accordingly came to be negotiated is as follows. Energokom was in dire need of additional funding and Mr Kuznetsov had had to contribute his own funds to repay the Wain May 2009 loan. Mr Gusinski was prepared to consider advancing a further loan to Energokom following repeated requests from Mr Kuznetsov, but was concerned about the viability of his investment. By November 2009 he had discovered the true position in relation to Mr Kagalovsky and understandably wished to have more control over what was happening in Energokom now that he could no longer trust his co-investor.

(v) The Term Sheet

70. The Term Sheet was prepared by lawyers. Although in cross-examination of Mr Gusinski it was suggested to him that he had not mentioned the need for a jurisdiction clause during discussions with Mr Kuznetsov but had "slipped it in" to the draft circulated afterwards, that was not Mr Kuznetsov's evidence, and Mr Gusinski denied it. There was ultimately no dispute that the document prepared by the lawyers and signed by the parties reflected what was agreed in discussions between Mr Gusinski and Mr Kuznetsov.
71. Emails sent following the discussions and agreement reached by Mr Gusinski and Mr Kuznetsov, show that the drafting of the Term Sheet was placed into the hands of their lawyers by Mr Kuznetsov soon afterwards. By 14 January 2010 a draft was available and was circulated by email, including to Mr Altman (but not Mr Kagalovsky). An amended version (with the exclusive jurisdiction clause added) was circulated by email dated 27 January 2010 to Mr Gusinski's lawyer and again copied to Mr Altman by Danny Dushansky, on behalf of Mr Gusinski.
72. Mr Kuznetsov knew that the purpose of a jurisdiction clause was to agree in advance the country in which any proceedings based on the agreement would be heard. He read it before signing the Term Sheet. He knew that at all times he (and if necessary, he together with Mr Gusinski) would be able to exercise majority control over Energokom (Day 3/158). I find that he did not raise any question of Latvian law during discussions with Mr Gusinski, and accept Mr Gusinski's evidence to the contrary, that Mr Kuznetsov assured Mr Gusinski that he could deliver on the promises he was making in relation to Energokom since he controlled the group. Had such assurances not been given I have little doubt given the commercial context that Mr Gusinski would simply have refused any further funding, and that Mr Kuznetsov well knew and understood this.
73. The Term Sheet as signed provides as follows:

"27.01.2010

Between

Mr. IVAN KUZNETSOV

(Hereinafter referred to as Mr Kuznetsov)

AND

Mr VLADIMIR GUSINSKI

(Hereinafter referred to as Mr Gusinski)

Mr Kuznetsov and Mr Gusinski as the ultimate beneficial owners of ENERGOKOM LLC, a Company duly incorporated and existing under the laws of the Republic of Latvia, registration number 40003962689, having its principal place of business located at A.Chaka st. 135. LV-1012, Riga, Latvia (hereinafter referred to as "the Company") have concluded current Term Sheet describing principal terms and conditions of Company share management and control.

Company Share

16.6% of the Company in possession of Mr. Gusinski or affiliated person.

Rights of the Company share

Mr Gusinski or affiliated person as the owner of the Company share has the decisive voice in the following questions:

approving the annual budget of the Company

approving merger and acquisition of the Company

approving of the executive board of the Company

The Company share redemption

At any time following the date of this term sheet Mr. Gusinski has the right, upon his own discretion, to require the Company share redemption for the price of 333 333 (Three hundred thirty three thousand three hundred thirty three) US dollars with the interest of the rate of 9% per annum payable from November 27, 2007 until the date of transfer in accordance with this term sheet.

Notice of redemption

To be valid, notice of redemption (hereinafter referred to as "Notice") shall be forwarded:

To the following email [email protected]:

Or in written to the following address - Russian Federation, 191123, Saint-Petersburg, Radischeva Street, 39, Mr. Ivan Kuznetsov.

Term of redemption

Mr Kuznetsov or affiliated person shall buy out the Company share during 2 (Two) months from the date of Notice receiving for the mentioned price and interest calculated for the date of Notice receiving.

The Company share transfer

Mr Gusinski or affiliated person shall transfer the Company share to Mr Kuznetsov or affiliated person during 5 (Five) days from the moment of funds receiving.

Governing Law and Jurisdiction

The Term Sheet shall be governed by the English law and shall be subject to exclusive jurisdiction of the courts in England.

IN WITNESS WHEREOF, the parties have duly affixed their signatures on this

27.01.2010.

Mr Kuznetsov Mr Gusinski

(signature) (signature)"

74. There is no written evidence to corroborate Mr Kuznetsov's evidence that Mr Altman objected to the arrangements set out in the Term Sheet and Mr Altman did not give evidence. Mr Kuznetsov states that he was not seeking approval from Mr Altman given his view that the Term Sheet was not binding but called him to obtain his preliminary view and in a telephone conversation was told that Mr Altman did not agree to it. I find this implausible. First, it is surprising if Mr Altman took exception to the Term Sheet that he did not respond by email setting out his objection when he was on the email chain and it would have been very easy to do so. Secondly, it is surprising that he said nothing to Mr Gusinski, who had been funding his contribution to the venture, but kept his objection a secret. Thirdly, if Mr Altman had objected, and Mr Kuznetsov was acting as the reasonable, honest businessman he has projected, it is surprising that he did not tell Mr Gusinski about it.
75. Mr Kuznetsov states that he told Mr Kagalovsky about the Term Sheet, but only after it was signed, in about February or March 2010. He says he explained in his own words the arrangements outlined in the Term Sheet but without sending him a copy. If Mr Kuznetsov considered it important to understand Mr Kagalovsky's view of the Term Sheet, he gave no sensible explanation for not telling him earlier and for not simply including Mr Kagalovsky on the email chain with Mr Altman, which would have been straightforward to do. He states that he met Mr Kagalovsky later in Kiev and showed him a copy of the Term Sheet and that on both occasions, Mr Kagalovsky told him that the arrangement was unfair with respect to him and that he would never approve it. Mr Kagalovsky's evidence about these conversations was vague: he did not recall the context, nor the date, and he made no reference in writing to a meeting in Kiev. He states that he was not aware of the detail of the negotiations between Mr Gusinski and Mr Kuznetsov but offers a series of arguments nevertheless as to why he did not regard the Term Sheet as binding. I have serious doubts as to whether these conversations with Mr Kagalovsky actually took place in the period after the Term Sheet was signed. It is possible that such discussions took place subsequently, after Mr Gusinski sought to exercise his redemption right, but on balance I do not accept they took place as described.
76. Mr Kuznetsov explains that when he came to sign the Term Sheet he considered it to be no more than an informal protocol of understanding between Mr Gusinski and himself. Its purpose was to record the points of principle that had been agreed between them in their discussions and he says that his understanding and intention was that a binding agreement between them would be drawn up once detailed and formal agreements and corporate approvals by the other shareholders of Energokom had been executed. Unlike the actions he took following the Road Map, Mr Kuznetsov did nothing whatever to draw up a detailed agreement after the Term Sheet was signed. In my judgment that was because, contrary to his evidence, he regarded the Term Sheet as binding without the need for any further document.
77. Mr Kuznetsov advances a series of further arguments why the Term Sheet is not binding (some of which are also adopted by Mr Kagalovsky). First, in his experience it is common during initial negotiations to have a framework document frequently called a term sheet later given to lawyers who embody it in a contractually binding form. Secondly, the Term Sheet did not reflect the actual position because Mr Gusinski did not then own or possess a 16.6% shareholding in Energokom and the Term Sheet did not accordingly contain rights that could be enforced when it was signed, reinforcing that it related to future intention. Thirdly, the corporate governance and redemption rights related to rights that could only be exercised by registered shareholders and Mr Gusinski was not a registered shareholder. His interest was held by Wain and the rights referred to in the Term Sheet could not therefore be exercised or enforced directly by him but would require the entry into force of a further formal shareholders agreement. Fourthly, the Term Sheet itself refers to the fact that it describes "principal terms and conditions" which reflected the fact that a final binding agreement would be required. Fifthly, both he and Mr Gusinski appreciated that the corporate governance rights and redemption right would have to be approved by Mr Altman and Mr Kagalovsky because of their own involvement and shareholder rights. Sixthly, the redemption right was subject to a statutory pre-emption right or rights that would have required the approval of other shareholders. I return to these arguments below.
78. Mr Kuznetsov made clear in evidence that he raised none of these matters with Mr Gusinski. Nevertheless, he says in his written evidence that he had no doubt that Mr Gusinski shared his understanding about the non-binding nature of the Term Sheet, without any credible explanation as to why this should be so.

(vi) Further funding of Energokom

79. Following the signing of the Term Sheet Mr Gusinski provided a replacement loan by means of a Promissory note issued by Energokom to Ajax (guaranteed by Mr Gusinski) on 1 March 2010 which provided for the loan to be repaid on demand but no earlier than 15 November 2010. The loan was repaid by Energokom in November 2010 and it is common ground that there were further repeated requests by Mr Kuznetsov of Mr Gusinski for replacement funding. This was provided in December 2010 by means of a further Promissory note issued by Energokom to Ajax (again guaranteed by Mr Gusinski). This loan was not repaid when it fell due and a short extension was agreed once Mr Kuznetsov provided a personal guarantee dated 2 December 2011 to repay. On 10 April 2012 the loan was substantially repaid through Datacom (though some interest and a small amount of principal remained outstanding).
80. By three separate Share Purchase Agreements dated 30 October 2010, Larden transferred an 11% interest in Energokom to each of Trumia (Mr Gusinski's company), Bedford (Mr Altman's company) and Tomkins (Mr Kagalovsky's company) (33% in total). It is common ground that the Share Purchase Agreements reflect a transfer for nominal value. Mr Kuznetsov's evidence is that because Mr Gusinski and the others had started honouring their promises by way of funding Energokom he regarded it as the right time to transfer the 33% shares in Energokom "as promised under the Road Map". He explains the absence of any reference to arrangements in the Road Map in the Share Purchase Agreements as being based on the fact that he considered his obligation to transfer the 33% shares as a standalone obligation.
81. The result of the Share Purchase Agreements and a subsequent transfer by ECL of its remaining 0.3% share to Wain, was that Wain came to hold 17% of the shares in Energokom.

(vii) Negotiations for Mr Kuznetsov to purchase Mr Gusinski's interest in Energokom and the breakdown of those negotiations.

82. In about February/March 2012 Mr Kuznetsov and Mr Gusinski discussed concerns about Mr Altman's management of Energokom. Mr Gusinski instructed his accountants to undertake an audit of the relevant companies, with Mr Kuznetsov's full knowledge. An audit was conducted in about April/May 2012. The subsequent reports expressed criticism of the management of the Energokom group.
83. It is common ground that Mr Gusinski, Mr Altman and Mr Kuznetsov met to discuss the situation and in particular to discuss Mr Gusinski's exit from the business. Mr Gusinski put a lot of pressure on Mr Altman to find a resolution without resorting to a legal fight. The negotiations continued by email between Anton Emelyanov and Ilya Gusinski (the son of Vladimir Gusinski) on 17 and 18 July 2012, and Mr Emelyanov wrote:

"I write to you on the order of (Mr Kuznetsov). As a result of agreements reached with (Mr Gusinski), (Mr Kuznetsov) is prepared to buy the stake in the Ukrainian unit by the end of September 2012: an 11% stake in the company Energokom from the company Trumia a 5.67% stake in the company Energokom from the company Wain Holdings a 16.67% ….. At a price of US$333,000 +9% per annum from the date of registration of transfer of a right to the shares in the register of companies of Latvia"

84. Those aspects of the agreement were confirmed by Ilya Gusinski on 18 July, although other aspects were not. Negotiations continued by email through the second half of July and by email dated 26 July from Yaron Kupfer to Anton Emelyanov, the former expressed surprise to see that there was a legal requirement under Latvian law which imposed on shareholders a statutory right of first refusal and asked for a copy of the relevant law.
85. By 2 August 2012 Mr Kuznetsov stopped answering letters so that the negotiations stalled.
86. Once negotiations stalled, Mr Gusinski reverted to a formal legal process by way of relying on his rights under the 30 October 2010 Share Purchase Agreement with Larden and on the terms of the Term Sheet. By a letter dated 27 September 2012 from GSC (who were solicitors both to Mr Gusinski and the Claimant) and Mr Kupfer, Mr Kuznetsov was asked to confirm that he intended to proceed with the purchase of the relevant shares. The letter also complained that Mr Kuznetsov had breached his fiduciary duties because Mr Gusinski had not been allowed to exercise the corporate governance rights referred to in the Term Sheet.
87. There is no dispute that Mr Gusinski was unable to secure the sale of any Energokom shares owned by Wain by then because Wain was deadlocked following the dispute with Mr Kagalovsky. Mr Gusinski says, and I accept, that for that reason, an affiliation agreement dated 16 October 2012 (the 'Affiliation Agreement') was made between Bedford, Mr Gusinski, the Claimant and Ms Irina Altman. Mr Gusinski acquired the right to control and dispose of part of Bedford's interest in Energokom as a result. Mr Gusinski thereby acquired control of a further 5.6% of Energokom. As a consequence he controlled the 11% interest in Energokom held by Trumia, a 5.6% interest in Energokom held by Bedford, and the 5.66% interest in Energokom held by Wain. The Affiliation Agreement grants Mr Gusinski the right to require to be transferred to him or his nominee 50.9% of Irina Altman's interest in Bedford or the 112 shares in Energokom owned by Bedford.
88. Although I am satisfied that he was not aware of the provisions of Article 189 of the Latvian Civil Code at the time the Term Sheet was concluded, Mr Gusinski became aware of those provisions by the time he came to issue the Notice of redemption.
89. By letter dated 17 October 2012 from GSC to Mr Kuznetsov (referred to as "the Notice"), express reference was made to the Term Sheet governed by English law, and to the provisions concerning "the company share redemption" "notice of redemption" "time of redemption" and "the company share transfer". On Mr Gusinski's behalf a formal demand was made that Mr Kuznetsov redeem 16.6% of the Energokom shares "possessed by [Mr Gusinski] or his affiliate" pursuant to the Term Sheet, said to equate to 332 shares, at a price of US$333,333 together with interest at the rate of 9% per annum from 27 November 2007 until the date of transfer (i.e. a daily rate of US$82.19, with a total then amounting to US$146,791.34). The letter did not specify the name of the affiliate whose Energokom shares Mr Gusinski was requiring Mr Kuznetsov to redeem.
90. Also by letter dated 17 October 2012, GSC wrote to the Board of Energokom giving notice of the proposed sale of shares to the Board in order that the Board could inform the other shareholders of Energokom of the opportunity to take up relevant pre-emption rights. The letter said:

"We act for

1. Trumia ….

2. Bedford …

Both Trumia and Bedford are the registered owners of 220 shares each in Energokom. As duly authorised agents for Trumia and Bedford we hereby give you formal notice that

a. Trumia has agreed to sell 220 shares… in Energokom; and

b. Bedford has agreed to sell 112 shares… of its holding in Energokom

to Mr Kuznetsov at a total price of US$480,124.34 on which interest is accruing…

Section 189 of the Latvian Commercial Code applies to these sales and accordingly this notification of sales is given to your board to enable you to comply with your duty to inform all shareholders of the sales without delay. In this regard we should remind you that that period for the utilisation of first refusal will expire at the end of one calendar month from the date of this notification."

91. By letter dated 24 October 2012, Mr Krizhanovsky on behalf of the Board of Energokom replied to GSC requesting two duly certified powers of attorney in respect of Trumia and Bedford to confirm their authority to act (as was required by law) and stating that the letter had not contained the information as to the name, surname and position of the author of the letter. The letter said that on receipt of two duly issued and certified powers of attorney with confirmation of GSC's powers and authorities, the Energokom board of directors "shall proceed with the Notice".
92. By letter dated 6 November 2012, GSC refused to provide this information. Instead, GSC challenged the request for information on the basis that there was no such requirement under English law, ignoring the fact that Energokom is a Latvian company and that statutory pre-emption rights arise as a matter of Latvian law. In a somewhat antagonist manner, GSC asserted that the pre-emption right period had commenced and threatened legal proceedings if Energokom did not comply with the Notice.
93. By letter dated 8 November 2012, the Board of Energokom replied to GSC, repeating the request for copies of two powers of attorney and explaining that Latvian legal requirements made it necessary for the board to make this request. The letter reiterated that upon receipt of two duly certified powers of attorney the board "shall proceed with the notice".
94. GSC did not provide the Board of Energokom with the information requested. Instead, GSC wrote by letters dated 21 November 2012 directly to the shareholders of Larden, Wain, Tomkins and also to Mikhail Timofejevs, informing them of the proposed sale by Trumia and Bedford of a total of 332 shares in Energokom to Mr Kuznetsov, and referring to their rights of first refusal in respect of those shares.
95. There was further correspondence in which GSC maintained its position by reference to a misunderstanding of Latvian law and the board of Energokom maintained its position. GSC issued these proceedings on behalf of the Claimant on 3 January 2013.

The main issues

96. Against those factual findings I return to the issues to be resolved in this trial. The Claimant seeks from Mr Kuznetsov payment of an alleged debt of US$480,124.34 (together with interest) under the Term Sheet, being the price for the sale of 16.6% of Energokom shares in the possession of Mr Gusinski or his affiliate. The two main questions that arise are:

(i) Is the Term Sheet valid and/or enforceable?

(ii) If so, was the Notice of Redemption valid and/or enforceable?

Issue 1: Is the Term Sheet valid and/or enforceable?

97. The Defendant's case is that the Term Sheet is invalid and/or unenforceable because it was never intended to be a legally binding or enforceable agreement; and is unsupported by any (or any relevant) consideration.

Intention to create legal relations

98. The legal principles that apply to this issue are broadly agreed. It is their application to the facts in dispute that is contentious.
99. Whether there is a binding contract and if so, on what terms, depends on what is said or done by the parties, and whether that leads objectively to a conclusion that they intend to create legal relations, and have agreed on all terms which they consider or the law requires as essential to create a binding contract. It does not depend on their subjective intentions. The governing criterion is the reasonable expectations of honest sensible businessmen: see RTS Ltd v Molkerei Alois Muller GmbH & Co [2010] UKSC 14, at [45] and [50].
100. The burden is on the party asserting that there was no such intention to establish that: Attrill v Dresdner Kleinwort Ltd [2013] EWCA Civ 394. Where the parties are in a pre-existing contractual relationship there is a strong presumption that they intend to create legal relations when they enter into a further agreement.
101. Subsequent conduct can be taken into account as objective evidence of whether or not the parties understood themselves to have concluded a contract and to have been bound by such a contract. Whether or not there is a legally binding contract however, depends on all the circumstances of the case: see RTS Ltd v Molkerei (above) at [54] and [56].
102. A number of factors are relied on by the Defendant as pointing to the conclusion that there was no intention to create a legally binding contract in the Term Sheet. First, the language used: its description as a 'term sheet' describing 'principal' and not the full terms, and its brevity and failure to refer to consideration. Secondly, the casual and informal way in which it was prepared and signed. Thirdly, the fact other shareholders (with statutory pre-emption rights, and affected by the corporate governance provisions) were not parties, so that certain rights were not capable of being enforced without further formalities. Fourthly, the fact that Mr Gusinski was not a registered shareholder and did not own 16.6% of Energokom at the date the Term Sheet was signed (his interest being limited to 5.6% at that time) meant his immediate right to redeem the Company Share was incapable of enforcement, and this remained the position for the following nine months.
103. I accept that there are some factors pointing against an intention to create legal relations, but for the reasons set out below I have concluded that the terms of the document itself, and the conduct of the parties viewed objectively, leads to the conclusion that the Term Sheet was intended to be legally binding.
104. Although I accept that the phrase used to describe the document – 'term sheet' – is often used in a commercial context to describe a framework agreement or template to be used to develop a more detailed legal document, there is no absolute rule that documents described as 'term sheets' are framework documents and cannot be contractual. The nature of a particular agreement reached depends on its own particular wording and what was intended, viewed objectively. Here, the drafting of the Term Sheet was placed very quickly into the hands of the lawyers following agreement reached in discussions between the two men, and drawn up by them. Mr Gusinski and Mr Kuznetsov, who are both experienced, sophisticated businessmen, signed the Term Sheet containing the clear, express terms relied upon.
105. The language used in the Term Sheet is consistent with a legally binding agreement and not merely a document that was aspirational. The rights and obligations set out are expressed in unqualified terms. For example the "right… to require" company share redemption; the word "shall" is used in clause 4, 5, 6 and 7. In context, the fact that the preamble refers to the Term Sheet as "describing principal terms and conditions" suggesting that further agreement on other matters might be required, does not mean that the Term Sheet itself was not contractual. An objective appraisal of the words and conduct of these two experienced businessmen leads to the conclusion that they did not intend agreement of any additional terms to be a precondition to a legally binding agreement. To the knowledge of both Mr Gusinski and Mr Kuznetsov, as a result of the agreement reached orally, there is an express law and jurisdiction clause, expressed to apply to "this term sheet" and not merely to some of its terms, or to any future agreement. It is difficult to see what purpose such a clause was intended to serve absent an intention to create a legally binding agreement. The Term Sheet also contains detailed provision for service of the notice of redemption, including emails and addresses, which would have served little or no practical function if the agreement was aspirational only.
106. The Term Sheet makes no reference to any consideration moving from Mr Gusinski and this is relied on as objective evidence that it could not have been intended to be binding. However, in the context of parties who had previously reached package agreements, part written, part oral, the absence of any reference to consideration is equally consistent with an intention that this was a package agreement, with the loan agreement reached orally, and anticipated to require separate further agreement. That is an approach that had been adopted previously between these parties (or their corporate vehicles) and I infer that having secured the rights identified in the Term Sheet, that is precisely what was anticipated on this occasion so far as funding to be provided by Mr Gusinski was concerned.
107. Further, as is common ground, these parties, through their corporate vehicles, had a pre-existing contractual relationship, with many of their antecedent agreements acknowledged to be legally binding, so that there is a strong presumption that the Term Sheet was also intended by them to be legally binding.
108. Mr D'Cruz points to the more detailed, lengthier agreements previously entered into (such as the 2007 SPA), but that does not entail that the Term Sheet was not itself binding. The Term Sheet dealt with two relatively short points (the clear right of redemption and the specific corporate governance rights) in contrast to the earlier lengthier agreements dealing with a wider range of issues. Nor was it casually entered into. Shortly after oral agreement was reached, the drafting of the document was placed by Mr Kuznetsov into the hands of his lawyer and Head of his International Law department, who invariably acted on his behalf and prepared a first draft. Mr Kuznetsov sought to downplay this fact by asserting that Mr Emelyanov acted in an administrative (secretarial) capacity but there is nothing to substantiate this assertion, and it is inconsistent with the wording of the Term Sheet itself and in particular the redemption right identified. The draft was circulated and considered by Mr Gusinski's lawyer and the exclusive jurisdiction clause was inserted. It was then signed by both parties, who did nothing further that could support an understanding or anticipation that any further written agreement was required in order to create a legally binding agreement. There is no logical reason why Mr Gusinski in particular would not have taken further steps to turn the Term Sheet into a legally binding document if he had believed or understood that to be necessary, given his obvious wish to have the redemption rights granted by the Term Sheet before providing any further funding. The parties' conduct in the circumstances described, objectively viewed, is consistent with a legally binding agreement having been reached.
109. Nor am I persuaded that the two further indicators relied on by the Defendant as supporting his case that the Term Sheet was aspirational only, negate contractual intention. Both at the time the Term Sheet was executed, and at all times thereafter (as Mr Kuznetsov accepted) Mr Kuznetsov (either alone or in combination with Mr Gusinski) retained majority control of Energokom. If he wished to grant or cede to Mr Gusinski the right to have a decisive voice on corporate governance questions, there was nothing to prevent him from doing so and he had the ability to enforce such a decision. In that context the corporate governance provisions in the Term Sheet provide a commercial arrangement that is consistent with the parties seeking to regulate and define their business arrangements in a legally binding manner so as to protect Mr Gusinski's minority position. Mr Kuznetsov was in a position to procure such votes or corporate approvals as were required to ensure that corporate governance rights were performed as he required them to be. Similarly, Mr Kuznetsov was in a position to ensure that the share transfers that would result in Mr Gusinski owning (directly or indirectly) at least a 16.6% shareholding in Energokom subsequently took place. This happened subsequently, pursuant to the 30 October 2010 Share Purchase Agreement, when Trumia paid Larden $450 for a transfer of shares that resulted in Mr Gusinski owning 16.6% of the Energokom shares.
110. So far as asserted objections by other interested parties are concerned, the contemporaneous documentary evidence shows that the Term Sheet was sent to Mr Altman; but there is no email (or other documentary evidence of any) response from him whatever (whether positive or negative). There is no evidence of it being sent to or objected to by other shareholders such as Mr Kagalovsky before it was signed. In my judgment any reasonable, honest businessman who had signed a document such as this and was in receipt of a chorus of disapproval from other interested parties would have told his counterparty of those concerns. The fact that Mr Kuznetsov did not say anything whatever to Mr Gusinski about any of these asserted conversations supports my conclusion that these asserted conversations did not happen.
111. To the extent that reliance is placed on the Latvian Civil Code as a basis for concluding that there was no contractual intention, it is common ground between the Latvian law experts that the provisions of the Term Sheet did not involve any breach of or non-compliance with the provisions of Article 189 of the Code, so that there is no reason to think that Mr Gusinski or Mr Kuznetsov would have concluded that Article 189 presented any obstacle or problem. In any event, Mr Kupfer's email of 26 July 2012 expressing surprise at the existence of Latvian statutory pre-emption rights supports my conclusion that neither he nor Mr Gusinski had any awareness of the existence of Article 189 at the time the Term Sheet was entered into. It is difficult therefore to see how this issue could bear on Mr Gusinski's intention to create legal relations. Finally, the relaxed attitude displayed by Mr Kuznetsov (and others) in the period prior to the Term Sheet towards contractual pre-emption rights enjoyed by his fellow shareholders reinforces my conclusion that the existence of statutory pre-emption rights would not have been seen by Mr Kuznetsov as any obstacle to the grant of a legally enforceable redemption right to Mr Gusinski under the Term Sheet.
112. Mr D'Cruz relies on the fact that Mr Gusinski made no effort to enforce the corporate governance rights he claims were granted to him under the Term Sheet until his attempt to enforce the purported redemption right in September or October 2012, two and a half years after the Term Sheet was signed. It is said that this inaction points against an understanding that there was a legally binding contract in place. I disagree. As Mr Kuznetsov accepted in evidence, Mr Gusinski's principal concern in relation to the Term Sheet was the provision of a redemption right and thereby an exit route from this investment. Mr Gusinski did not provide the desperately needed funding until that right had been secured. When it became clear that the project was not working, there was an attempt to negotiate Mr Gusinski's exit amicably, albeit through a different route than that afforded by the Term Sheet. It was only when negotiations broke down that Mr Gusinski reverted to the formal legal process set out in the Term Sheet.
113. For all these reasons I am satisfied that the Term Sheet was workable when signed. The terms of the agreement reached, the commercial context and circumstances demonstrate that the Term Sheet was, on an objective basis, intended by both Mr Gusinski and Mr Kuznetsov to be a legally enforceable agreement.

Consideration

114. Although it is apparent from the face of the Term Sheet, that it does not provide for Mr Kuznetsov to receive anything in return for granting Mr Gusinski the rights identified in it, the Claimant's case is that the Term Sheet represented a clear and logical quid pro quo for Mr Gusinski's agreement to provide or facilitate the further funding in Energokom which the Defendant was seeking, and his agreement not to pursue any investigation into mismanagement of Energokom at that time. That case is challenged as a matter of fact and further, on the basis that even if Mr Gusinski did make the funding promise asserted, as a matter of law, it did not amount to valid consideration, but was simply a promise of something that Mr Gusinski was already obliged to do under the Road Map.
115. It is trite law that a gratuitous promise is unenforceable for want of consideration. The classic definition of consideration as set out in Dunlop Pneumatic Tyre Company v Selfridge and Co Ltd [1915] AC 847 at 855 remains good law (approved by the Privy Council in Attorney-General v R [2003] UKPC 22 at [30] to [32]):

"An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable."

116. Even a temporary act of forbearance, which falls short of an express promise, but confers a practical benefit on the relevant party, can constitute good and sufficient consideration: see AG v R at [32] where the price for which R's promise was bought was the forbearance of the MOD to exercise its power to return him to unit, and was held to amount to a practical benefit to R and a sufficient act of forbearance to make the promise enforceable.
117. The first question that accordingly arises, is whether as a matter of fact Mr Gusinski made the oral promises relied on by the Claimant as consideration for the rights granted to him under the Term Sheet.
118. The Defendant relies heavily on what are said to be inexplicable inconsistencies between the Claimant's case as originally pleaded and as currently put at trial, together with the "incredible change of factual case from a mere indication that Mr Gusinski would be likely to provide further financial support to an unequivocal promise that he would" do so. Although I accept that the Claimant's pleaded case on consideration has changed over time, there was little if any dispute in the evidence, between Mr Gusinski and Mr Kuznetsov as to what was agreed between the two and the context in which it came to be agreed.
119. The Claimant's case at trial was that the consideration for the Term Sheet was a promise by Mr Gusinski of continued financial support for Energokom in the form of facilitation of an extension of the Wain May 2009 loan, and forbearance in the form of a promise by Mr Gusinski not to pursue any investigation into the management of Energokom.
120. Mr Gusinski's evidence, both in writing and his oral evidence, was consistent with that case. I do not accept the construction placed by Mr D'Cruz on paragraph 34 of his witness statement and the evidence he gave in cross examination about that paragraph (Day 2/160-161), to the effect that he conceded the consideration question. Read fairly and as a whole, it is clear that paragraphs 31- 34 of Mr Gusinski's witness statement concern the Road Map, and the fact that the steps he undertook to provide money to Energokom from Autumn 2009 onwards, were not as a result of "any document such as the Road Map" but "were the subject of separate and discrete discussions" between Mr Gusinski and Mr Kuznetsov, no doubt, including the discussions that led to the Term Sheet. It seems to me that the cross-examination proceeded on the basis of taking one sentence out of context and in isolation; and that the witness and counsel were at cross purposes. Mr D'Cruz had the Term Sheet in mind, whereas Mr Gusinski was focused on the Road Map. The matter was clarified in re-examination and I do not regard the forceful answer given by Mr Gusinski either as having been "spoon-fed" or as "well-rehearsed" (Day 3/74).
121. Mr Kuznetsov's evidence was also clear. So far as the question of continued financial support for Energokom is concerned, Mr Kuznetsov said that by December 2009 he knew that replacement funding for Energokom would be required since the Wain May 2009 loan would shortly fall due for repayment. Moreover he knew that as a result of the disagreement between Mr Kagalovsky and Mr Gusinski, he could not obtain that funding from Wain. Indeed he sought a 12 month extension to that loan agreement from Wain, but received no response, and had to contribute his own funds on 18 and 21 December 2009 (through Datacom) in order to repay the Wain May 2009 loan (Day 3/131-133). Soon after that repayment, as he acknowledged, he chased Mr Gusinski with regards to replacement funding [IK 1/127] and was particularly keen to secure it as soon as possible. Mr Kuznetsov described several discussions over the telephone with Mr Gusinski about replacement funding and explained that when he raised this, Mr Gusinski responded by raising his desire to exit his investment in Energokom.
122. In his first witness statement, [IK 1/130-132] Mr Kuznetsov said:

"Mr Gusinski explained that he was also unhappy with his investment in Energokom because he had originally expected it to produce quick and significant returns in the first year… but that had not proved to be the case. Mr Gusinski also said that he was also uncomfortable about his Energokom investment because of the deterioration of his relationship with Mr Kagalovsky due to their dispute over the ownership of the TVi channel and this was also an important factor why he wanted to exit Energokom.

Mr Gusinski told me that he would only agree to continue to remain a shareholder of Energokom on certain conditions. Those conditions were that I provide him certain corporate governance rights to protect his minority interest and agree to grant him a redemption right.

Although Mr Gusinski brought up his desire to exit his investment in Energokom at the time when I was chasing him in relation to replacement funding, the conversation about the exit and discussions about the replacement funding were separate and were run in parallel…. I presumed that if Mr Gusinski decided to exit the Energokom business, he would not continue to provide his share of finance under the roadmap. On the other hand I hoped that if Mr Gusinski stayed in the business he might still honour the roadmap agreement and provide the replacement funding. However, I wish to emphasise that the replacement funding of Energokom was not discussed in connection with Mr Gusinski's request to provide him with additional corporate governance rights and a redemption right."

123. Nevertheless, Mr Kuznetsov agreed that in order to get the funding he wanted and that Energokom needed, he knew that he had to reach an agreement with Mr Gusinski that would make him prepared to remain invested in Energokom; and that is why Mr Gusinski's desire for a redemption right and the corporate governance rights were discussed. He accepted that these two questions were linked, and discussed during the same conversation; but insisted that they were discussed in parallel, although it was difficult to understand exactly what he meant by that. Given his evidence as to how the discussions started, and Mr Gusinski's response to the request for funding with a request for an exit route, it is difficult to see a basis on which it could be said that the two questions became bifurcated. In any event, ultimately Mr Kuznetsov agreed that it was because he had agreed the Term Sheet that Mr Gusinski was willing to provide the funding he required – accepting that the only thing that changed between the time when Mr Gusinski was unwilling to provide further funding and the date when he in fact did so was that the Term Sheet was signed: Day 3/152-153. He continued:

"but it doesn't mean that this term sheet was a binding agreement. I believe that Mr Gusinski was content and happy, took comfort that in this term sheet I promised him to sign a legally binding agreement at a later date on all the terms and all the items that were listed in it. And therefore he did carry on with his financing."

124. Accordingly there is no dispute on the evidence that Mr Kuznetsov understood that the quid pro quo for the signing of the Term Sheet, at least in Mr Gusinski's mind, was the provision of financing. Whether Mr Kuznetsov thought that the Term Sheet was itself binding or that it contained an enforceable promise to enter into a binding agreement at a later date does not affect the question of consideration. On his own evidence Mr Kuznetsov signed the Term Sheet in return for Mr Gusinski's promise of further funding. This was undoubtedly valid consideration moving from Mr Gusinski.
125. So far as the question of an investigation is concerned, again there is little dispute as to the facts, and certainly nothing contrived in Mr Gusinski's evidence as to the forbearance promise. Mr Gusinski's consistent evidence is that the promise of increased governance rights that would protect his minority interests in the business and a promised exit route in respect of his investment, enabled him to agree (in addition to the promise of new funding and to continue his cooperation with Mr Kuznetsov) not to pursue any investigation for the moment into Energokom. Mr Kuznetsov's evidence was to similar effect:

"Q: And one of the things Mr Gusinski said was that if he received these corporate governance rights, he wouldn't pursue any investigation for the moment into the reasons that Energokom had not been as successful as you hoped?

A: yes, it is true. Such words, words to that effect, were pronounced by Mr Gusinski. But they were no surprise to me; I was not interested in them, because actually I insisted and carried on insisting and inviting any investigation or audit myself. .."

126. In either case, I am satisfied that if Mr Kuznetsov had refused to grant Mr Gusinski the redemption right he sought and the corporate governance rights that would protect his minority interest, the funding subsequently provided by Mr Gusinski would not have been provided. This was the commercial quid pro quo. Having reached the oral agreements described, and executed the Term Sheet on 27 January 2010, Mr Gusinski facilitated a loan from Ajax capital of $525,000 to Energokom, by means of a personal guarantee. The loan was made on 1 March 2010, and subsequently renewed on 24 December 2010 with a further guarantee provided by Mr Gusinski, dated 16 January 2011.
127. Furthermore, Mr Gusinski did not commence any investigation into the management of Energokom. Despite Mr Kuznetsov's assertion that he had no interest in this, I am satisfied that this act of forbearance, even if temporary, conferred a real practical benefit of value to Mr Kuznetsov. Whether it was his intention or not to carry out an investigation, he can have had no wish for somebody else to pursue such investigations at that time. This constituted good and sufficient consideration to make the promises contained in the Term Sheet enforceable. No question of past consideration arises here.
128. In any event, in light of my conclusions set out above that the Road Map was not legally binding, and certainly not binding on Mr Gusinski as an individual rather than Wain, and was not acted upon in broadly equal terms in the relevant period by Mr Kuznetsov, the promise made between December 2009 and January 2010 by Mr Gusinski to provide continued financial support for Energokom was not made pursuant to the Road Map and was not, accordingly past consideration, as far as the Term Sheet is concerned. In the circumstances, the question of past consideration does not arise even in relation to the funding promise.
129. For the same reason, the question of economic duress also does not arise. However, I observe in any event, that the case of economic duress raised by Mr D'Cruz in his closing submissions for the first time (that Mr Kuznetsov was forced to accommodate Mr Gusinski's conditions under pressure of his threats to exit Energokom, and made to feel like he was in a hostage situation) is neither pleaded nor covered by Mr Kuznetsov's witness statement and was not put to Mr Gusinski at all. In fact, the question of past consideration was also un-pleaded, and raised for the first time in the Defendant's opening skeleton argument. This was canvassed on the first day of the trial and on the Claimant's behalf no objection was taken. However, Mr George QC laid down a clear marker that he would not consent, at least without an application, to any widening of this issue into an argument based on economic duress. That discussion having taken place and no application having been made to amend to plead economic duress, it seems to me that it is simply too late to raise any question of economic duress in closing.
130. Accordingly, for all these reasons I find that the Term Sheet was a legally binding and contractually enforceable agreement.

Issue 2: Validity of the Notice of Redemption

131. The Defendant's case is that even if the Term Sheet was valid, the Notice of redemption was invalid for one or more of the following reasons:

(i) it failed to identify the shares that the Defendant was being required to purchase (in terms of the proposed owners/sellers).

(ii) The Notice was being applied to shares that were not covered by the redemption right.

(iii) Further, the Notice was seeking to bring about a transfer of shares whose validity could be challenged by the other shareholders, because their pre-emption rights to those shares had not been complied with.

132. Mr D'Cruz submits that because the Notice is in the nature of an option that can be exercised unilaterally, strict compliance with any notice conditions is required and the offer must be accepted in exact compliance with its terms. Further, in his submission all of the conditions required to be met by the Notice need not be expressed in the underlying document itself. In construing the document, the purpose of the option and of the related notice are relevant and it is a question of construction whether it is an indispensable condition that a notice specifies particular information in order to be valid: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 776 and 768; United Dominions Trust v Eagle Aircraft Services Ltd [1968] 1 AE 104 at 107F and Rennie v Westbury Homes Holdings Ltd [2007] EWCA Civ 1401 at [15]. Adopting a purposive, commercial approach, he submits that to be valid the Notice had to contain sufficient information to satisfy a reasonable grantor that the action being required of him by the Notice is covered by the option. This is an indispensable condition, and since it is not expressly provided for in the Term Sheet, it is to be implied to give business efficacy to the contract or because it represents the obvious but unexpressed intention of the parties.
133. Applying these principles to this case, Mr D'Cruz submits that it was an indispensable condition that the Notice confirm that the shares Mr Kuznetsov was being required to purchase were ones to which the redemption rights applied. Specifically, the Notice should have contained information sufficient to confirm that the shares were ones that fell within the definition of "Company share" in the Term Sheet (namely "16.6% of the Company in possession of Mr Gusinski or affiliated person") as properly construed. Having regard to the purpose of the option, which was to secure an exit route from Energokom for Mr Gusinski, and the unusually exact percentage of shares to which the proposed option is stated to apply (16.6%) which was the precise percentage anticipated at the date of the Term Sheet that Mr Gusinski would come to own, the only shares to which the Notice could attach were those specific shares in Energokom that it was anticipated at the time of the Term Sheet that Mr Gusinski would end up owning after receiving his share of the 33% of Energokom anticipated by the Road Map (in other words, the 11% held by Trumia and 5.6% through Wain and ECL with effect from 30 October 2010) and that would, if sold, secure Mr Gusinski's exit from Energokom. That is the meaning or effect of the words 'in possession' in the definition of Company share.
134. Whilst I accept the legal principles to which Mr D'Cruz drew my attention and in particular the need to give careful consideration to the unilateral nature of a Notice such as is in issue in this case, in construing its terms and determining whether any unexpressed but indispensable condition is to be implied, ultimately the question is one of construction of a written contract, where the task is to identify the intention of the parties by reference to what a reasonable person having their background knowledge would have understood in using the specific language used in the written contract. The importance of what the parties agree in terms of the language they use is not to be undervalued since they have control over the language used by them and must have been specifically focused on the issue covered by the relevant provision when agreeing the wording of it: see Arnold v Britton [2015] 2 WLR 1593 (SC).
135. Accordingly, I begin with the Term Sheet. This expressly addresses the procedural requirements for a valid Notice of redemption, as follows:

"To be valid, notice of redemption (hereinafter referred to as "Notice") shall be forwarded:

to the following email [email protected]

Or in written to the following address – Russian Federation, … Mr. Ivan Kuznetsov."

There is and can be no suggestion that the Notice failed to satisfy those requirements. Moreover, it defines "Company share" to which the redemption right applies, very widely as "16.6% of the company in possession of Mr Gusinski or affiliated person".

136. The question is whether it is necessary to give business efficacy to the Term Sheet and/or because it represents the obvious but unexpressed intention of the parties, to imply a term that to be valid, in addition to what is expressly stated, the Notice must identify the precise vehicle or shareholder of the shares to be sold.
137. Mr Gusinski and Mr Kuznetsov, two experienced, sophisticated businessmen, well used to using sophisticated funding structures and corporate vehicles, expressly directed their minds to the preconditions for validity they wished to impose on any future notice of redemption. The only precondition imposed was by way of identifying the address to which any notice should be sent. They could have defined 'company share' more restrictively and spelt out in the Term Sheet a requirement to identify the specific shares and/or holder of those shares which Mr Gusinski wished to sell. They chose not to do any of these things.
138. The purpose of a redemption notice is to alert the party on whom it is served to the fact that the redemption rights are to be exercised and that payment will be required in return for the transfer of the relevant shares. That purpose was achieved by a notice that simply complied with the express terms in the Term Sheet. The fact that Mr Kuznetsov would be required to pay in advance for the shares and that their transfer was required only after payment, does not alter this conclusion. On an objective view of the language used in the Term Sheet and having regard to the purpose of the redemption right, this was plainly intended. In these circumstances and since the effect of implying this unexpressed term would be to make it almost impossible for the person giving the notice to know what is required to make it valid, I do not consider that such a term represents the obvious unexpressed intention of the parties. Nor is it necessary to give business efficacy to the Term Sheet to imply additional requirements to those expressly agreed, that would have to be satisfied by any notice of redemption.
139. Further, in my judgment, in order to be valid and enforceable the Notice was required to contain information sufficient to confirm no more than that the 16.6% shares in Energokom to be sold were in the possession of Mr Gusinski or his affiliate. At the time that the Term Sheet was executed, the parties did not know, and could not have known, how or by whom interests in Energokom might subsequently come to be held. Mr Kuznetsov had not heard of Trumia at that time. He was well aware of the dispute between Mr Gusinski and Mr Kagalovsky, and accepted that Mr Kagalovsky could have left the venture altogether, and by inference, Mr Gusinski could have continued in the venture with a greater shareholding than 16.6%, with or without Mr Altman. Mr Kuznetsov knew that Mr Altman did not have funds of his own and although Mr Kuznetsov refused to accept it as mere conjecture, the inevitable inference is that there could have been a situation where Mr Gusinski and Mr Kagalovsky insisted that because they were providing the money, they should acquire the shares allocated to Mr Altman. Accordingly, whilst it is true that the purpose of the redemption right was to secure Mr Gusinski's exit from Energokom, there is no factual basis in the evidence for suggesting that these parties had a particular 16.6% in mind when agreeing the redemption right, or that any purported exercise of the redemption right in respect of a smaller number of shares than the 16.6%, or indeed in respect of 16.6% of shares in circumstances where he had a larger shareholding than that, would be invalid. It would have been easy to include these points expressly in the Term Sheet if that had been the parties' intention, but they chose not to do so.
140. As a result of the Affiliation Agreement, I am satisfied that Bedford was just as much an 'affiliate' of Mr Gusinski as Wain. Even if I had some concern about the meaning of "affiliated person" in this context, I agree with Mr George that it is clear that Mr Gusinski was entitled under the terms of the Affiliation Agreement to require the relevant shares to be transferred to him, in which case on any view, they would have been 'in possession of Mr Gusinski' for the purposes of the Term Sheet. In the circumstances, I do not accept that the shares registered to Bedford were not ones to which the redemption right could have applied. The redemption right legitimately applied to those shares, just as it did to those registered to Wain and Trumia.
141. Alternatively, it is argued on behalf of Mr Kuznetsov that the validity and enforceability of the Notice was dependent on the notice given to the Energokom Board itself being valid since no redemption sought under the Notice could be implemented unless the provisions of Latvian law were complied with. Mr D'Cruz contends:

i) The Notice to the Board did not comply with Latvian Law because GSC failed to comply with the request to provide evidence of its authority (in the form of a power of attorney) and the name and signature of the author of the letter.

ii) As a result the Board was entitled and obliged not to notify the other shareholders of the proposed sale for the purpose of their right of first refusal.

iii) The letters from GSC to the other shareholders about the proposed sale also failed for the same reasons, to constitute valid notice for the purpose of the statutory pre-emption rights.

iv) This means that any sale that might have occurred pursuant to GSC's Notice to the Board would have breached the pre-emption rights of the other shareholders and entitled them to bring claims for redemption of the shares or damages or to avoid the sale. He relies on the fact that Ms Berlaus accepts that redemption would have been a realistic scenario.

In other words, the Notice was seeking to bring about a transfer of shares in circumstances that would breach Latvian law and whose validity could have been, and could still be, challenged by the other shareholders, and was thereby rendered invalid.

142. Mr D'Cruz submits that as a matter of commercial practicality, a notice of redemption must be valid not just on the date that it is sent but also (and he submits more importantly) at the date on which the obligation that the notice is seeking to trigger is said to arise. He argues that it does not follow from the fact that a notice is valid on the date that it is sent that it is also valid on a later date and he relies on the fact that a change in circumstances may invalidate a notice in the interim period. If by the date when the relevant obligation arises, it is illegal to perform that obligation, then he submits the notice must be treated as invalid from the date it was sent.
143. I do not accept this argument. I reject, as a matter of law, the proposition that a notice of redemption that is otherwise valid and enforceable in English law, can become invalid as a result of subsequent events or correspondence as is argued. Mr D'Cruz identified no authority for this proposition, and no real basis for it in English contract law. There is none as far as I am aware.
144. Finally, the Defendant's pleaded case contends that the Term Sheet contained an implied term that "any obligation on Mr Kuznetsov to make any payment pursuant to the [Notice] would be dependent on NMH being willing and able to comply with what would be its own obligation to procure the transfer to him of shares to which the [Notice] would apply within five days of receipt of payment from Mr Kuznetsov." On this basis it is said that Mr Kuznetsov is not obliged to make any payment under the Notice.
145. I can see no proper basis for the implication of such a term. As Mr George submits, the concept of "willing and able" is imprecise and involves a factual investigation into both subjective and objective matters, creating too great a degree of uncertainty to be the basis of a sensible commercial agreement, involving as it would the potential elimination of one of the parties' fundamental obligations under the contract.
146. As a matter of English law, if Mr Gusinski received payment pursuant to the Notice but failed to discharge his own obligations by procuring the transfer of shares to which the redemption right applied within five days of receipt of such payment, Mr Kuznetsov would have a legal claim against him and there is no basis for implying a term seeking to supplement legal rights already enjoyed under English law in those circumstances. In any event time is not expressed to be of the essence of the Term Sheet and any loss caused by such a delay could easily be compensated for in damages. Again there can be no justification for implying a term that eliminates the payment obligation in its entirety in these circumstances.
147. Such a term is particularly inappropriate where, as here either party could have ensured that the necessary formalities (under Latvian law) for the exercise of the redemption right were complied with, since it is common ground between the Latvian law experts that, irrespective of who had the primary obligation, Mr Kuznetsov could have provided notice to the board of Energokom within the two-month period that would have satisfied the requirements of Article 189 of the Latvian Civil Code.
148. Moreover, although the experts disagree as to who had the primary obligation to provide such a notice, Mr Liepa's view is based on an analogy with statutory provisions in relation to an entirely different article of the Latvian Civil Code: Article 2061. But that Article deals with contractual (as opposed to statutory) rights of first refusal in purchase agreements and expressly provides that the purchaser has the obligation to offer a contractual right of first refusal to the holder of this right. Before amendment with effect from 1 July 2013 there was no express stipulation in the Latvian Civil Code as to who would have responsibility for notification of pre-emption rights. Eva Berlaus states that in practice notices of rights of first refusal were given both by buyers and sellers of shares. The absence of an express obligation placed on the seller in Article 189 (in contrast to the position in Article 2061) strongly suggests that no such obligation was intended.
149. In any event, it is clear as a matter of Latvian law that the transfer of shares without prior compliance with Article 189 of the Latvian Civil Code does not render the transfer automatically invalid or unlawful (as Mr Liepa accepts). Accordingly, Mr Gusinski could have made a legally binding transfer of shares within the relevant time period. Furthermore, it would never have been impossible for such a transfer to take place: the parties could have co-operated properly and the deficiencies in correspondence could easily have been remedied; and the other shareholders could in any event have waived the formalities, or waived their pre-emption rights in writing at any time: Article 189(1) of the Code.
150. The Latvian law experts agree that there are three possible claims that could be made in respect of a transfer of shares without prior compliance with Article 189 of the Code: a right to claim redemption; a right to claim damages; and a right to challenge the validity of the share transfer agreement itself.
151. So far as the third of these possibilities is concerned, although such a challenge can be made, it is agreed that no question of automatic invalidity generally arises in Latvian law. The only circumstance in which a share sale would be rendered invalid for non-compliance with Article 189 of the Code is if, pursuant to Article 1415 of the Code, the relevant transfer was not performed in good faith in that it constituted

"an impermissible or indecent action, the purpose of which is contrary to religion, laws or moral principles, or which is intended to circumvent the law".

152. In her report Ms Berlaus refers to a number of cases in which the Supreme Court of Latvia reviewed cases where rights of first refusal had been ignored and concluded that non-observance of such rights did not automatically result in invalidity of the share sale agreement. In Decision No. SWKC-475/2011 of the Senate of the Supreme Court of Latvia, the Court addressed an argument that a share purchase agreement was invalid because rights of first refusal had not been observed, the claimant arguing that the failure to observe those rights was intended to circumvent the law, rendering the agreement void. The argument was rejected. The Senate held:

"To recognise that a transaction intends to circumvent the law, it is necessary to establish that parties to the transaction wanted to achieve real consequences, but the purpose of their agreement was to circumvent the obligations or restrictions provided in the norms of law".

Having assessed the facts, the Senate concluded that no grounds could be detected for invalidating the transaction. Among other reasons, it held that the real consequences the parties sought to achieve by the transaction remained irrespective of the failure to observe rights of first refusal, so that the transaction was valid and enforceable:

"In addition, the challenged agreement has been concluded between two shareholders of the company; therefore, the Senate considers that the buyer's activity, which aims at obtaining shares owned by another shareholder in the company, cannot be considered to be impermissible and indecent."

153. I cannot see any basis on which it could be said there was an impermissible purpose in the present case. Rather, there was a procedural failure by GSC in the formalities required of the correspondence sent to the Board and the other shareholders. Nevertheless, the other shareholders were informed of the proposed share sale and invited to exercise their pre-emption rights, but none did so. The non-compliance with procedural requirements by virtue of the failure to provide certified powers of attorney and identify the particular solicitor responsible for writing the letter, is procedural only. Where the relevant defects are purely procedural and the relevant holders of pre-emption rights were at all material times aware of the proposed share sale it is difficult to see that there could be any finding that either Mr Gusinski or Mr Kuznetsov failed to act in good faith in relation to the share transfer. No such case is advanced by Mr Kuznetsov on the pleadings in any event.
154. In any event, there is no evidence of any other shareholder wishing to take up these pre-emption rights. The only people who could allege that their rights had been violated are the other shareholders, Mr Altman, Mr Kagalovsky and Mr Timofejevs. All three were aware of the proposed share sale and, accepting that they were entitled to await sight of duly certified powers of attorney, nevertheless none sought to exercise their rights. Moreover, Mr Kagalovsky confirmed in evidence that he had no interest in taking up any pre-emption rights as he considered the entire Energokom project to be "dead and buried". Mr Altman had transferred his own shares to Mr Gusinski, suggesting that he had no interest in taking up pre-emption rights. Mr Timofejevs was Mr Kuznetsov's business partner and it is to be assumed that if he wished to take up pre-emption rights he would have done so in those circumstances.
155. As for the two other bases of challenge, the experts canvass the possibility of a claim for damages by the other shareholders but in Mr Liepa's view, such a remedy is "unlikely" in any event. Even if such a remedy was available, the claim for damages would be against Mr Gusinski and not Mr Kuznetsov pursuant to Article 2063 of the Latvian Civil Code, unless Mr Kuznetsov had acted in bad faith. Again, it is difficult to see on what basis a term should be implied that would eliminate Mr Kuznetsov's payment obligation because a shareholder might bring a claim for damages against Mr Gusinski which is at best unlikely to succeed.
156. The possibility of a claim seeking to exercise a right of redemption, by analogy with Article 1073 of the Latvian Civil Code is also canvassed by the experts. In an article exhibited by Mr Liepa, by Janis Bite, Mr Bite is reluctantly "forced to conclude" that such a claim would not be possible under Latvian law. Ms Berlaus herself refers to the "lack of definite redress mechanism to be applied in cases of non-compliance with the [right of first refusal] of the shareholders, and this led to both theoretical and practical uncertainties". Even if such a claim were possible under Latvian law, the remedy would simply be to provide the shareholders with the very rights of pre-emption given to them by Article 189 of the Code. In this scenario, the only risk to Mr Kuznetsov would be that shareholders who had not responded to the invitation to exercise pre-emption rights from GSC, would after the transfer had taken place have that opportunity.
157. So whilst three possible claims under Latvian law might be available, any claim to invalidate the share transfer could only be pursued under Article 1415 of the Latvian Civil Code on public policy grounds not present here. The remaining claims are doubtful. Contrary to the submissions of Mr D'Cruz, they do not afford any basis for implying a term restricting the effect of the Term Sheet so that it cannot be regarded as valid (at least to the extent that it concerns the redemption right) on the basis that it would otherwise expose Mr Kuznetsov to a claim of redemption or a declaration avoiding the agreement. Nor, contrary to Mr D'Cruz's forceful submissions, is there any public policy impediment to this court enforcing the Term Sheet, whether as a matter of comity or otherwise.

Conclusion

158. For these reasons I am satisfied that the Term Sheet is contractually binding and legally enforceable and that the Notice of redemption is also valid and enforceable. In those circumstances there will be judgment for the Claimant on the claim, together with interest. I will hear submissions as to the precise terms of the order to be made and as to any consequential orders.
159. It remains only to thank all counsel and the parties for the helpful and focused way in which this litigation was conducted; and for the assistance they gave me, both in writing and orally.