11/07/2020 • The Straits Times

Ex-Georgian PM’s suit to be heard here, not Geneva, rules court

Singapore’s Court of Appeal has allowed the lawsuit of former Georgian prime minister Bidzina Ivanishvili, against a trustee linked to a major Swiss bank, to be heard in Singapore instead of Geneva.

The case involves a US$1.1 billion (S$1.5 billion) trust.

Mr Ivanishvili, 64, once ranked as the richest man in the former Soviet republic of Georgia, had sued over losses involving the US$1.1 billion Mandalay Trust, of which he and his family are beneficiaries.

It was a 2-1 decision by the Court of Appeal.

Judge of Appeal Judith Prakash issued the judgment grounds last week on behalf of the majority comprising Chief Justice Sundaresh Menon and herself.

She wrote: “There is no doubt that the Singapore courts are the most well-placed to decide issues of Singapore trust law, and the Swiss courts, operating in a civil law jurisdiction with no substantive doctrine of trusts, would be far less familiar with these issues.”

She also said that when looking at the connecting factors in their totality, “the availability of evidence is only a weak point in favour of Switzerland being the appropriate forum, whereas the shape of the litigation and the governing law both point in favour of Singapore”.

The risk of overlapping proceedings is a neutral factor, she added.

Senior Judge Chao Hick Tin, in a dissenting opinion, said Switzerland was the more appropriate forum for the case to be heard.

He pointed out that the contentious parts of the claims in the action had the most real connection with Switzerland, so far as witnesses and documents were concerned, among other things.

The Mandalay Trust with US$1.1 billion was set up by Mr Ivanishvili in Singapore in March 2005.

Its assets were held by two investment firms, Meadowsweet Assets and Soothsayer, in the Geneva and Singapore branches of investment bank Credit Suisse, which is based in Switzerland.

The trust assets were managed and invested by the Switzerland-based bank, which provided investment reports detailing the performance of the accounts to the trustee.

Mr Ivanishvili alleged misconduct on the part of his portfolio manager Patrice Lescaudron, who was convicted of embezzlement, forgery and other charges in a Geneva court in 2018 and jailed for five years.

In 2017, Mr Ivanishvili, his wife and three children sued the bank and the trustee in the Singapore High Court over the Mandalay Trust’s losses.

Both the bank and trustee succeeded in the High Court in 2018 to stop the court proceedings here and have the case heard in a Swiss court.

Mr Ivanishvili appealed to the Court of Appeal for the case to be heard here instead of Switzerland.

In the course of the appeal proceedings, his Drew & Napier lawyers led by Senior Counsel Cavinder Bull and Ms Woo Shu Yan applied to drop the claim against the bank and sued only the trustee.

The move strengthened their appeal, which the court made clear was not an abuse of process. It pointed out the change allowed the real issues in the appeal to be properly tried.

The trustee, represented by Queen’s Counsel Toby Landau who was instructed by Allen & Gledhill lawyers led by Senior Counsel Stanley Lai, opposed the appeal.

The court held, among other things, that the availability of witnesses was a weak factor in favour of Switzerland as the appropriate forum.

In allowing the appeal, it held that the “shape of the litigation” was ultimately that of a claim for breach of trust against a trustee carrying out its duties in Singapore.

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