allegations of conspiracy and fraud

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Kinanis LLC represented two of the Defendants in an action involving allegations of conspiracy and fraud. The Claimant was claiming that the defendants were trying to deprive her of her assets, mainly the proceeds of a sale of a yacht and the ownership of property held in Spain.

The property in Spain was held under the following corporate structure: the property was held in by a Spanish Company who was a defendant in the action. The Spanish company was wholly owned by a Cyprus company, the registered shareholder of which was Cypriot national acting as a nominee shareholder who in turn held the shares of the Cyprus company in favour of a Hong Kong company who in turn was owned by a Seychelles company the registered shareholder of which was a Romanian citizen, all of which were defendants in the action. This structure was accepted by both sides with the difference that the nominees recognised the Romanian citizen as the ultimate beneficial owner whereas the Claimant was alleging that the Romanian citizen was in fact acting as a nominee holding such shares for her. The claimant admitted that her alleged ownership of the companies and the Spanish property was intentionally concealed from the persons acting as nominees.

The Claimant managed to initially obtain on an ex-parte basis, freezing orders prohibiting amongst others the alienation of the Spanish property, as well as notification injunctions against several defendants of the defendants. In addition to the orders obtained on an ex-parte basis, the Claimant was also seeking several disclosure orders.

With her claim, the claimant was seeking damages against several of the defendants as well as declaratory orders by which she be declared the ultimate beneficial owner of the Cyprus, Spanish, Hong Kong and Seychelles company.

Jurisdictional issues were raised during trial of the interim orders where the Court decided that it had no jurisdiction to hear the action at all, as the basis of the claim and substance of the action was in fact a claim over “[…] a Spanish property registered in the name of a Spanish company who in turn was ultimately owned by a Seychelles company”. This meant that the real substance of the claim related to who was in fact the ultimate owner of the Seychelles company. In reaching its decision the Court reviewed the Cyprus Civil procedure rules as well as the provisions of the Brussels Recast Regulation. In addition, the Court also decided that the Claimant was estopped from her illegal behaviour, mainly intentionally concealing her identity from the nominees, to further proceed with the action and in effect the interim orders.