Introduction
On 20 December 2024, Mr Simon Birt KC (Sitting as a Deputy Judge of the High Court) handed down judgment in the King’s Bench Division (Commercial Court) case of Alimov v Mirakhmedov [2024] EWHC 3322 (Comm).
The primary issue for the Court to address was whether the English Court had jurisdiction over a claim involving various Kazakh parties, living in the UK, UAE, and Kazakhstan.
The Claimant, Mr Yermek Alimov is a businessman with expertise in Kazakhstan’s energy sector and the former head of two Kazakh energy companies, AstanaEnergoServices JSC and Karaganda Energo Tsentr LLP (a private energy company which owned the Karagndiskaya TETs 3 power station and provided energy to the city of Karaganda). The four Defendants comprised of three Kazakh bitcoin miners: Mr Abdumalik Mirakhmedov (“D1”), Mr Rashit Makhat (“D2”), Mr Andrey Kim (“D3”) and fourth Cypriot-based company, Genesis Digital Assets Limited (“Genesis”), then the largest cloud bitcoin-mining company in the world.
The Facts
In summary, Mr Alimov said that in around April 2017 Genesis and D1-D3 entered into a joint venture agreement to develop bitcoin mining in Kazakhstan. Genesis were to own 50% and D1-D3 50%. D1-D3 were responsible for finding a cheap source of energy, acquiring the land and buildings near the energy source and readying that land and buildings for bitcoin mining. Genesis was to prepare and install the technological equipment needed for bitcoin mining, and incorporate the new bitcoin mining factories in Kazakhstan into its existing bitcoin infrastructure in Europe.
In seeking to find that cheap source of energy, D2 and D3 contacted Mr Alimov in around May 2017. There were then said to have been a series of meetings in May 2017 between D1-D3 and Mr Alimov, in which Mr Alimov proposed various energy sites in the city of Karaganda which would be suitable for D1-D3’s energy needs.
Ultimately, Mr Alimov says that he met D1 in London on 10 June 2017 where he alleges to have reached an oral agreement on which the claim is largely based. Mr Alimov says that he and D1 (acting with the authority of D2 and D3) agreed that Mr Alimov would receive a 35% share in the Defendants’ joint venture corporate vehicle, as well as 35% of the bitcoin obtained, in exchange for Mr Alimov providing the energy infrastructure needed to mine bitcoin. The Court described and defined this as the “London Agreement”.
Mr Alimov sought to bring a breach of contract claim under Article 228 of the Civil Code of Kazakhstan before the High Court in London. D1 disputed jurisdiction, claiming that he had relocated to the UAE, while D2 and D3 argued that the dispute was governed by Kazakh law and should be heard there.
The Claimant was required to satisfy three conditions in order to obtain permission to serve proceedings on a foreign defendant outside the jurisdiction: (1) that there is a serious issue to be tried on the merits in relation to the foreign defendant(s); (2) that there is a good arguable case that the claim falls within one or more of the jurisdictional ‘gateways’ set out in the applicable rules; and (3) that England & Wales is clearly the appropriate forum for the trial. However, the burden of proof rested on the Defendants to demonstrate that there exists an alternative forum, in this case, Kazakhstan, that is more appropriate than England & Wales for the resolution of the dispute
The Applicable Law
The Claimant relied on CPR PD 6B gateways, specifically para. 3.1(1) (D1 domiciled in England) and para. 3.1(3) (proper parties D2 and D3), as well as para. 3.1(6) (contract made in England). In determining the issue, the Court referenced Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, which clarified that a “good arguable case” requires sufficient evidence to warrant trial, not certainty of success. It also cited Goldman Sachs International v Novo Banco SA [2018] UKSC 34, affirming that a claim based on a contract formed in the jurisdiction is valid if backed by plausible evidence. The court found the Claimant had a good arguable case but concluded the dispute over the London Agreement necessitated a full trial rather than summary determination.
The Claimant sought to rely on the Companies Act 2006, specifically section 1141, to argue that service could be effected at a registered address for D1 in England, notwithstanding that D1 had relocated abroad. However, the Court concluded that section 1141 of the Companies Act did not establish an independent basis for service, particularly in instances where the defendant no longer resided within the jurisdiction. The Court further rejected the Claimant’s reliance on this provision for service at the registered address, stressing that it did not provide a separate or novel rule for jurisdiction. Service was ultimately deemed valid solely because D1 had not fully established his residence in Dubai at the relevant time, meaning the London addresses remained applicable for service purposes.
The Court also found that the Claimant’s assertion that D1 had authority to bind D2 and D3 to the London Agreement under Kazakh law was unsupported, as Kazakh law requires specific formalities, such as a power of attorney, which the Claimant could not produce. As a result, there was no real prospect of success on this point. However, the Court allowed the Claimant’s amendment to plead ratification, noting that even if D1 lacked authority, D2 and D3 had subsequently ratified the agreement by requesting the transfer of the sub-station and factory and making payments of bitcoin. The issue of ratification had a plausible evidential basis, and the claims against D2 and D3 therefore demonstrated a serious issue to be tried under the para. 3.1(6) gateway.
In applying the law, the Court followed the principles of forum non conveniens – that a court may stay proceedings in favour of a more appropriate forum – to determine the most appropriate forum for the dispute. The Judge relied on Spiliada Maritime Corp v Cansulex Ltd [1987] A.C. 460, which established that courts must assess whether there is an alternative forum that is clearly more appropriate for the trial based on factors such as location, convenience, and fairness.
Court’s Decision
The Claimant sought to have the dispute heard in England, arguing that the London Agreement took place in this jurisdiction, and the Defendants could therefore be served here. In prior decisions, English courts had asserted jurisdiction on the grounds of the location of the parties or the alleged breach of contract within the jurisdiction. In this case, the overwhelming factors – the location of the relevant events, the Defendants’ domicile, and the evidence – were tied to Kazakhstan. The Claimant’s claim for jurisdiction in England was based primarily on an oral agreement allegedly formed in London, but the Court found that the connection to Kazakhstan outweighed any link to England.
Key considerations included:
- Location of Events: The alleged breach of contract and the relevant events primarily took place in Kazakhstan, where the Bitcoin mining project was located, and where the majority of the business and infrastructure was situated.
- Location of Evidence and Witnesses: Most of the evidence, including documents and testimony, was expected to come from Kazakhstan.
- Parties’ Connections to Kazakhstan: The Defendants all had substantial business and personal ties to Kazakhstan, making the country the natural venue for the resolution of the dispute.
The Court’s decision in this matter contrasts with another recent FSU-related jurisdictional dispute in January 2025 – Magomedov & Ors v TPG Group Holdings (SBS), LP & Ors [2025] EWHC 59 (Comm). In Alimov v Mirakhmedov, the Court found a serious issue to be tried under the CPR PD 6B gateways and allowed the Claimant’s ratification claim to proceed, citing a plausible evidential basis. The Court similarly stressed the absence of a substantial link to England and concluded that Kazakhstan was the more appropriate forum, given the dispute’s closer ties to that jurisdiction. By contrast, in Magomedov, the Court determined that there was no serious issue to be tried and declined jurisdiction in England due to insufficient connections with that forum.
Importantly, the Court found that there would be no real risk of substantial injustice in the claim being heard in Kazakhstan. Following Município de Mariana v BHP Group (UK) Ltd [2022] EWCA Civ 951, the Court reiterated that the mere possibility of a different outcome in a foreign jurisdiction, or the application of different procedural or substantive rules, does not constitute substantial injustice. As Kazakhstan is the clearly more appropriate forum, the Claimant must accept the rules and procedures of that jurisdiction, as outlined in Connelly v RTZ [1998] AC 854, without the ability to bypass local legal provisions to achieve a more favourable result.
Conclusion
The Court ultimately determined that Kazakhstan was clearly the more appropriate forum for this dispute. Although the Claimant had established a plausible case that the alleged agreement was formed in London, the Court emphasised that the strong connections to Kazakhstan, where almost all the relevant events and property were located, made it the natural forum for the dispute.
The case also serves as a reminder to Claimants when initiating claims involving multiple jurisdictions, and the need to carefully consider jurisdictional challenges at the outset.
Share this Post