White & Case debarred over conflicts in $2bn oligarch battle
31 January 2014 | By Matt Byrne
12 February 2014
3 February 2014
12 February 2014
9 December 2013
12 December 2013
White & Case has been disqualified from acting on one of its flagship cases, the $2bn oligarch litigation between Ukranian industrialist Victor Pinchuk and his rivals Gennady Bogoliubov and Igor Kolomoisky, after a conflict of interest.
Mr Justice Field handed down his judgment granting a permanent injunction debarring White & Case from acting for Pinchuk in the commercial court battle today (31 January). The US firm had already voluntarily ceased acting for Pinchuk in a related arbitration last December.
In what will be seen as a David and Goliath victory, Enyo Law successfully acted for the claimants, a group of companies whose majority shareholders are Bogoliubov and Kolomoisky. Enyo partner George Maling instructed Brick Court Chambers’ Daniel Jowell QC and Richard Eschwege.
Olswang partner Richard Bamforth instructed Bankim Thanki QC and Tamara Oppenheimer of Fountain Court Chambers to represent White & Case.
Blackstone Chambers’ Dinah Rose QC, instructed by Nabarro partner Tom Dane, represented Pinchuk on an unsuccessful intervention in the proceedings highlighting the potential impact of the disqualification of White & Case.
Today’s disqualification centred on White & Case’s internal conflicts checking procedures, which were highlighted after it emerged that the firm had been advising Bogoliubov and Kolomoisky in the US on a corporate restructuring and potential IOPO and Pinchuk in London on the dispute involing the former pair.
In April 2011, a team led by White & Case partner Colin Diamond in New York accepted instructions to act for a number of companies in which Kolomoisky and Gennadiy had ownership interests on the restructuring and IPO.
White & Case acted for the claimants until May 2013. During that time it became privy to and obtained substantial confidential information about Kolomoisky and Gennadiy’s ferroalloy businesses’ assets and the structure of various corporate vehicles.
Unknown to the Ukranian pair, White & Case lawyers in London and Moscow led by partner David Goldberg had been advising Pinchuk since September 2010 on claims against Kolomoisky and Bogolyubov.
The court heard that White & Case decided internally there was no conflict of interest between its acting for the claimants and also acting for Pinchuk and did not establish any information barriers separating the teams for two years.
White & Case was instructed to act for Pinchuk in the London court in March 2013 and related London arbitration proceedings in August 2013. The claimants sought an injunction to prevent White & Case acting for Pinchuk in both the commercial court and the London arbitration. In both cases White & Case has now ceased acting for Pinchuk.
In his ruling today Mr Justice Field found that White & Case was in possession of confidential information that was or might be relevant to the litigation, and that Pinchuk’s interests were or might be adverse to the interests of the claimants.
He further held that White & Case could not show that there was no real risk of the disclosure of the claimants’ confidential information to Pinchuk.
In a statement White & Case said: “White & Case has an exemplary record in detecting and avoiding conflicts of interest and in safeguarding our clients’ confidential information. We have robust policies and procedures that are underpinned by strong systems and regular training and support for our partners, lawyers and staff.
“While we are disappointed by the judgment, the judge did not find that any actual breach of client confidentiality had occurred.
“The issues raised in the judgment are very specific to the facts of this particular case and to the relationship between the parties involved, but we are considering whether any improvements to our policies and procedures can or should be made.”
It is not clear if White & Case will appeal or which firm will win instructions from Pinchuk in the ongoing litigation. Firms thought to be in the running to pick up Pinchuk as a client include Dechert, Debevoise & Plimpton, Hogan Lovells and Quinn Emanuel Urquhart & Sullivan.
Freshfields Bruckhaus Deringer partner Ian Terry continues to represent Kolomoisky and Skadden Arps Slate Meagher & Flom partner David Kavanagh for Bogoliubov in the matter (10 July 2013).