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Offshore Cases

Fraunteld Management Limited -v- Featherwood Trading Limited

June 2012 Contracts

BRITISH VIRGIN ISLANDS

HIGH COURT

UNJUST ENRICHMENT – BVI LAW – TOTAL FAILURE OF CONSIDERATION – PROPER LAW OF TRANSACTION – WHETHER SUBJECT TO BVI LAW OR RUSSIAN LAW – WHETHER RECOVERY AVAILABLE UNDER BVI LAW – WHETHER RECOVERY AVAILABLE UNDER RUSSIAN LAW

This was a case of unjust enrichment and conflicts of law. The case concerned two prominent Russian businessmen, a Russian distillery and several offshore companies. The Claimant Company claimed that it had paid over US$13 million into a Cypriot bank account belonging to the Defendant, a BVI company, and received nothing in return. The Claimant had expected that its affiliates, in exchange for the payment, would receive shares in the Russian distillery but the shares had never been transferred. The Claimant, therefore, claimed the money back under the principles of unjust enrichment. The Defendant did not claim any positive entitlement to the money but claimed that, as a matter of BVI and Russian law, it was nonetheless entitled to keep the money.

The evidence surrounding the payment of the US$13 million was highly contentious and the (multiple) witnesses gave evidence entirely via video link from Russia.

 

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