SCF Group News: Judgement Received From London High Court

High Court Judgment received on Costs and Appeals in Fiona Trust/Intrigue Shipping vs Yuri Nikitin and Others Case

Further to the judgment of the London High Court (Commercial Court) announced on 10 December 2010, in the case between Fiona Trust & Holding Corporation & Others and Intrigue Shipping Inc & Others (the “Claimants”) - now part of SCF Group, against Mr Yuri Nikitin (the principal of Standard Maritime Ltd) and others (the “Defendants”), Mr Justice Andrew Smith has today handed down his supplemental Judgments on the Claimants’ relief, interest, litigation costs and appeals.

During hearings held at the London High Court between 24 and 28 February 2011 Mr Justice Andrew Smith reviewed, amongst other things: substantive relief for the Claimants; the apportionment of costs between the various parties; applications to appeal aspects of the 10 December 2010 judgment by certain of the Claimants and Defendants. In summary, the reserved Judgments handed down today found as follows:

Claimants Relief The Judge has decided that Mr Nikitin and Milmont are liable to further account for sums received by Milmont under the Clarkson commission schemes in respect of certain newbuilding hulls, in addition to sums previously quantified at the Hearing in February.

Interest - The Judge awarded the Claimants interest on their principal sums at a rate of 2.5 pct over US LIBOR with quarterly rests.

Costs – The Judge made no order as to costs as between the Claimants and Mr Nikitin / his associated companies; ordered that the Claimants pay Mr Dmitry Skarga’s and Mr Tagir Izmaylov’s costs.

Appeals - The Judge refused the Fiona Claimants and the Nikitin Defendants permission to appeal.

The Judgment of Mr Justice Andrew Smith has resulted in total compensation due to the Claimants, including applicable interest, of approximately USD 60 million. Together with payments already received in settlement from other parties, the total compensation due to SCF Group is in excess of USD 140 million.

SCF Group is satisfied that the Judge accepted its submissions regarding the interest rate to be applied to the compensation awarded to it from the Nikitin Defendants. Regarding costs, the Group is disappointed that, in spite of the Judge’s finding that “the Claimants were the successful party against Mr Nikitin and the Standard Maritime Defendants” (par. 44), the Judge has not ordered Mr Nikitin and his companies to bear any of the costs of the Claimants. The Group does not regard the costs allocation as reflective of the wrongdoing of some of the Defendants as found by the Judge in the Judgment of 10 December 2010. Furthermore, the Fiona Claimants are also considering appealing to the Court of Appeal.

Commenting on the Judgment Mr Vladimir Mednikov, Executive Vice- President of Sovcomflot and Chief Legal Officer of the SCF Group, said:

“As a result  of today’s Judgment and earlier settlements SCF Group expects to recover in excess of approximately USD 140  million in compensation for fraudulent transactions undertaken by Mr Nikitin and his associated  companies between 2001 and 2004. Our decision to litigate has already been vindicated, however we remain disappointed as to the extent of the Judge’s findings regarding the wrongdoing of the Defendants and the allocation of costs.”

Nicholas Fairfax, a member of the Executive Board of SCF Group, noted:

“Today nobody has any doubt that the SCF Group had been the subject of serious  fraud. Cases involving fraud and corruption such as this are highly complex. We are now considering an appeal to the Court of Appeal. In addition further litigation is being pursued by Novoship.

“Throughout this process SCF Group has sought to protect the interests of its shareholders. The Group has an ongoing commitment to uphold high standards of corporate governance, will always investigate any suspected case of fraud or corruption and cooperate with the relevant national entities authorised to ?ombat such matters.”