The Commercial Court has handed down a significant judgment dealing with the principles and scope of an account of profits following a breach of fiduciary duty.
The Court has held that the Claimants are entitled to an account of profits worth over $100m.
These proceedings related to “Recovery Services” provided to the family
of deceased Georgian billionaire Arkadi “Badri” Patarkatsishvili, who died
intestate in February 2008. After Mr Patarkatsishvili’s death, his family
sought to recover his assets, which were held by a variety of complex
structures and individuals in a wide range of jurisdictions. The parties
involved in the present proceedings initially worked together to help the
family to recover those assets, but later fell out, and the Defendants pursued
the opportunity by themselves.
At the Phase 1 liability trial, Recovery Partners GP Ltd & anor.
v Rukhadze & ors.  EWHC
2918 (Comm), Cockerill J held that the Defendants had acted in breach of the
fiduciary duties they owed to the Claimants. Daniel Cashman summarised the
liability judgment here.
The Claimants elected the equitable remedy of an account of profits.
Following the Phase 2 quantum trial which took place between October
and December 2021, the Court has now determined that – subject to the valuation
of one asset, which remains to be determined – the Claimants are entitled to an
account of profits worth $142.536m, less a 25% allowance for the Defendants’
work on the Recovery Services over several years.
Cockerill J’s full judgment can be found here.
Shaheed Fatima QC, Tom Cleaver, Will Bordell and Marlena Valles acted for the Claimants, instructed by Brown Rudnick.