22/06/2023

Obtaining permission to continue derivative action in a €100 million Cyprus-Poland fraud claim

Philip Riches KC, Andrew Dinsmore and Richard Greenberg (instructed by Peachey & Co) obtained ‘second stage’ Part 19 permission from the Chancery Division to continue a derivative action in a €100 million fraud claim following a two-day hearing in Durnont Enterprises Limited v Fazita Investment Ltd [2023] EWHC 1294 (Ch).

The claimant brings the action on behalf of a Cypriot company in relation to a fraudulent scheme, which expropriated €100 million of investment certificates in a fund that invested in Polish real estate.

The judgment will be of interest to practitioners in complex international fraud claims, especially with a company law angle, in that it considers:

• the applicable law to the issue of whether a person can bring a derivative claim in England in respect of a foreign company,
• how to approach factual and foreign law expert evidence in a derivative action, and
• the relevance of the need to serve out of the jurisdiction and the applicable test for that at the permission to continue stage.