The High Court of Justice in London has rejected PrivatBank's lawsuit against its former owners Ihor Kolomoisky and Hennadiy Boholiubov and obliged the Ukrainian state bank to pay all court expenses of the defendants, according to a press release from Fieldfisher, representing Kolomoisky's interests.

"The High Court in London has thrown out PrivatBank's case against Ihor Kolomoisky and Hennadiy Boholiubov and ordered the Ukrainian bank to pay its two former main shareholders full costs ... The court found that the Worldwide Freezing Order [WFO] should never have been granted and that PrivatBank artificially constructed the case so they could attempt to join Kolomoisky and Boholiubov to the proceedings [in London]," Fieldfisher lawyers said.

"The court awarded the defendants interim payments on account of their costs totalling GBP7.5 million, with GBP4 million of that payable to Mr. Kolomoisky within 28 days," the report says.

According to a court judgement, a copy of which has been sent to Interfax-Ukraine, the judge drew the conclusion without doubt that PrivatBank brought the claim against Teamtrend Ltd., Trade Point Agro Ltd., Collyer Ltd. ("the English Defendants" in the judgement) in order to establish jurisdiction to sue Kolomoisky and Boholiubov in London.

The judge gave the reasons for this conclusion. No direct evidence has been given as to why in fact the bank brought a claim against the English Defendants in December 2017, and none of the arguments that the bank puts forward now as justification are at all persuasive. Some of the justifications on which the bank relies could not have existed as reasons in December 2017 because the Bank was unaware of them.

According to the judgement, the claim that was brought has been artificially constructed. The role of the English defendants in the fraudulent scheme has been presented to make it appear that the English defendants were central players in the fraudulent scheme and/or the recipients of the $1.8 billion, such that the bank would naturally wish to pursue them. A restitutionary claim against the English defendants, used to support this conclusion, is unsustainable.

The judge said that the bank has presented its claim – in the particulars of claim and in its evidence upon the without notice application – so as to omit highly relevant facts.

"A true presentation of the facts would have revealed that the role of the English defendants was no more than incidental to the working of the fraudulent scheme," the judge said in the judgement.

The judge said that there is no real attraction or benefit to the bank in suing the English defendants; the real defendants to the claim are Kolomoisky and Boholiubov. The bank has admitted that bringing a claim against Kolomoisky and Boholiubov in London gives it significant procedural advantages, many of which the bank has already enjoyed as a result of the worldwide freezing order and the defendants' compliance with associated disclosure obligations.

"That was a real benefit to the Bank, as compared with the lesser attraction of litigating in Switzerland or Ukraine, and is self-evidently the reason for the proceedings in London," the judge said.

The judge said that however, the bank has a good arguable claim against them for at least hundreds of millions of dollars. The judge said that the bank is not permitted to do is forum shop without regard to international conventions on jurisdiction. The former owners of the bank are entitled under the terms of the Lugano Convention to have any claim brought against them in Switzerland, where they are domiciled.

In circumstances in which the court has no jurisdiction against Kolomoisky and Boholiubov and the claims against the English defendants are stayed for the reasons given above in relation to the sole object of the claim against the English defendants, and further bearing in mind their lack of any valuable assets, injunctive relief against the English defendants should not be re-granted.

"Even if I had reached different conclusions on the jurisdiction and stay issues, I would as a matter of discretion have declined to re-grant a worldwide freezing order up to $515 million plus interest in view of the serious non-disclosure and misrepresentation that led to the grant of such an order up to $2.6 billion in December 2017," the judge said.

PrivatBank, in turn, previously said it would appeal this decision in the Court of Appeal in England, and until that point the WFO remains in force.