The Court of Appeal (Carr and Asplin LJJ, Sir Timothy Lloyd) have today dismissed an appeal against Picken J’s dismissal of a claim in unjust enrichment in the long-running Avonwick litigation.
The underlying litigation concerned a dispute between three Ukrainian businessmen, Mr Gaiduk, Mr Taruta and Mr Mkrtchan. In December 2009, vehicles belonging to Messrs Taruta and Mr Mkrtchan had paid US$950m to acquire a Gaiduk company, Avonwick’s, interest in a Ukrainian metals business called IUD under the “Castlerose SPA”. As the Court recorded at , it was common ground that the sum of US$950m was intended to include the Gaiduk interest in IUD, but also various other assets (including stakes in the Kiev Hyatt, held by NET, and Agro Holding). The interests in NET and Agro Holding were never transferred.
At trial, Picken J dismissed a claim by the Taruta Parties that there was a collateral contract to the Castlerose SPA which provided for binding obligations on the Gaiduk Parties to transfer their stakes in NET and Agro Holding . There was no appeal from that decision. The Judge also dismissed a claim to recover US$75m in unjust enrichment, which was said to be the sum attributable to the interests in NET and Agro Holding -.
The Castlerose SPA expressly provided that the full sum of US$950m was payable under the Castlerose SPA for the shares in Castlerose alone . The issue which arose on the appeal was whether an unjust enrichment claim for ‘failure of basis’ could lie in circumstances where there was an express contractual provision as to the basis of the payment.
The Court unanimously held that it could not:
In consequence, the appeal was dismissed.
The judgment is here.
Ben Woolgar appeared for the successful Respondents, the Gaiduk Parties, at trial and on appeal (instructed by Quinn Emanuel).