This section summarises various transfers of ownership regarding the Moscow property between 2015 and 2020.
Purported transfer into the Akhmedov Trust in 2015 (set aside)
In 2015, Farkhad had purported to settle his right, title and interest in the entire issued share capital of Sunningdale into the Akhmedov Trust pursuant to a Declaration of Trust dated 17 March 2015. Haddon-Cave J set aside the settlement of Sunningdale into the Akhmedov Trust under s 37 of the Matrimonial Causes Act, and s 423 of the Insolvency Act, by paragraph 17 of his Order dated 20 December 2016. The effect of this is that the shares were re-vested in Farkhad absolutely, as the owner of the entire issued share capital of Sunningdale.
Further transfers: June 2018 transfer to Temur, May 2020 transfer to Farkhad via Sunningdale
Mrs Justice Knowles recently described the transactions as follows (noting that “the developments in relation to the Moscow Property will be the subject of detailed consideration at the trial” and that the summary “does not represent the court’s concluded view of these recent developments”):
In summary, the dealings with the Moscow Property appear to be as follows:
a) Prior to June 2018, the Husband was the ultimate beneficial owner of the Moscow Property. It was beneficially owned by him through his 100% shareholding in a Cypriot company called Sunningdale Limited [“Sunningdale”] which owned all of the shares in a Russian company called Solyanka Servis LLC [“Solyanka Servis”], which in turn owned the registered title to the Moscow Property.
b) In June 2018, Sunningdale transferred the shares in Solyanka Servis to Temur at a substantial undervalue. Temur became the ultimate beneficial owner of the Moscow Property and the Husband ceased to have any interest in it. Although the Husband remained the owner of Sunningdale, that company had been stripped of its value. The Wife had been prejudiced as she could no longer realise the value of the Moscow Property by enforcing against the Husband’s assets.
c) Days after the Wife served her Particulars of Claim on Temur in January 2020, Sunningdale suddenly commenced proceedings in Moscow against Temur to recover the shares in Solyanka Servis for a supposed default in payment over 18 months earlier. In his Defence, Temur said that he did not intend to defend that claim.
d) On 25 February 2020, the Wife became aware that a hearing had been scheduled in Moscow for 20 May 2020. To protect her position in the event that the Solyanka Servis shares were transferred back to Sunningdale, the Wife applied to the Cypriot courts for, inter alia, the appointment of an interim receiver of Sunningdale. An interim receiver was appointed on 6 May 2020, with the appointment order being drawn up on 15 May 2020. On 1 June 2020, Sunningdale was served with the appointment order.
e) Unknown to the Wife at the time, on 19 May 2020, Temur had already caused a formal transfer agreement to be executed for the transfer of the Solyanka Servis shares to Sunningdale. On the same day, a submission was made to the Russian Tax Service (which maintains the register of shares) to register this transfer. The transfer became effective on 26 May 2020.
f) Notwithstanding the appointment of the interim receiver and the service of documents on Sunningdale on 1 June 2020, Sunningdale executed a separate share transfer agreement with the Husband’s representative on 3 June 2020 for the sale of the Solyanka Servis shares to the Husband for the massively undervalued price of RUB 50 million (less than £600,000). A submission was made to the Russian Tax Service for the registration of this transfer on 4 June 2020 and, notwithstanding the determined efforts of the interim receiver to prevent it, this transfer became effective on 9 June 2020. The result is that the Husband is once more the beneficial owner of the Moscow Property and that he has once more succeeded in defeating the Wife’s entitlements.
g) Further, the Husband has three months from the date of the registration of the transfer to pay the vastly undervalued purchase price, that is, until 9 September 2020.
Source: judgment of Mrs Justice Knowles dated 18 August 2020 at [14]