Winston & Strawn to take IPOC case to Privy Council

The London office of US firm Winston & Strawn is likely to refer a massive and complex mobile phone case to the Privy Council on behalf of its client IPOC, a Bermuda incorporated investment fund.

The case, being heard in the British Virgin Islands (BVI), will decide who owns a disputed 25 per cent stake in Russia’s third largest mobile phone operator MegaFon.

Winston & Strawn’s case, led by London litigation partners Barry Vitou and Tom Benz, was dismissed by the BVI Court of Appeal and the firm looks set to appeal to the Privy Council.

Referrals of large commercial cases to the Privy Council are rare and the appeal is taking place as the BVI and other Caribbean islands are considering the creation of their own court to replace the Privy Council as the court of final appeal for Caribbean cases.

The Caribbean islands are considering a break with the Privy Council partly for reasons of national status and because so many death sentences have been overturned by the UK body.

Any referral will delay the outcome of the case. The dispute is already threatening to delay the flotation of MegaFon on the London and New York stock exchanges.

IPOC claims ownership through various option agreements the fund allegedly signed in 2001 with the stake’s purported previous owner, LV Finance, a Russian investment company. However, Alfa, a conglomerate owned by Russian oil and banking tycoon Mikhail Fridman, claims that it owns a stake and has purportedly paid LV for it.

In the BVI, IPOC has made a substantial number of claims against LV, Alfa and others, including seeking to freeze assets linked to the 25 per cent stake. Similar claims are being brought by IPOC in two arbitrations in Switzerland.

LV is being represented by Michael Jones, head of Weil Gotshal’s London litigation department. Alfa’s BVI vehicles are being represented by Lovells and are instructing Stephen Smith QC of New Square Chambers. Winston & Strawn is instructing Martin Mann QC of Twenty Four Old Buildings.