Law360, London (February 18, 2020, 8:55 PM GMT) — A judge ordered Credit Suisse to pay some of a former employee’s costs on Tuesday after he largely fended off a bid to pare down his £46 million ($60 million) lawsuit over his imprisonment in Romania on espionage charges while working for the lender.
In his written ruling, Roger Ter Haar QC, sitting as a High Court judge, noted that back in January, Credit Suisse was able to convince the court to reduce Vadim Benyatov’s lawsuit significantly. But since the court rejected Credit Suisse’s request for £1.15 million in security for costs or a conditional order for that amount, the judge said Benyatov was “the most successful party” coming out of the hearings last month.
As a result, the judge said the bank should pay Benyatov one-third of his costs related to the bank’s applications.
However, Judge Ter Haar also said the case “has shrunk significantly” because of the bank’s application to strike all or some of the claims. As a result, he said Benyatov should pay the bank’s costs connected to the parts of his lawsuit that have been struck out — up to and including the date of service of the bank’s defense. The judge did not provide a sum for this amount.
The parties’ cost summaries presented to the court, which the judge called “remarkable,” came to £368,774 for Benyatov and £648,408 for Credit Suisse.
Benyatov, who ran the bank’s emerging markets desk in Europe, claims his life has been upended since he was sentenced in his absence to a decade in prison in 2013.
The former director, who was out of work and burdened with a string of business failures, says Credit Suisse did nothing to prepare him for the political realities of working in Romania, which at the time was on the cusp of becoming a member of the European Union.
Benyatov worked for the bank from around 2005 on the proposed privatization of a Romanian state-owned energy producer by an Italian company. He alleges that Romanian officials were concerned about potential Russian influence in its energy sector and scrutinized him because of his Russian family name and birth place inside the former Soviet Union.
Benyatov claims that the bank failed to conduct an adequate risk assessment on Romania and should have tipped off the country’s intelligence services about its business plans.
Benyatov said that after he was arrested in 2006 Credit Suisse paid for his legal expenses but failed to cover his “enormous losses.”
At a hearing late last year a lawyer for the bank said Credit Suisse spent more than £10 million fighting Benyatov’s convictions in Romania at the European Court of Human Rights.
The bank disputes his claim for repayment, and has said there is no obligation for it to indemnify Benyatov simply because his work for the lender led to his arrest.
In January, Judge Ter Haar reduced Benyatov’s lawsuit against his former employer, including claims that it did not do enough to support him after he was arrested.
Credit Suisse made contact “at very high levels within governments and diplomatically” to secure Benyatov’s release, the judge said. The bank “made considerable efforts to assist including the expenditure of large sums” defending him in court, he added.
A Credit Suisse spokesman told Law360 on Tuesday that it is seeking to appeal the portions of the court’s ruling allowing the two pared-down claims to proceed.
Benyatov is represented by Charles Ciumei QC, Naomi Hart and Andrew Legg of Essex Court Chambers, instructed by Scott+Scott UK LLP.
Credit Suisse is represented by Paul Goulding QC of Blackstone Chambers and Paul Skinner and Emma Foubister of Matrix Chambers, instructed by Cahill Gordon & Reindel (UK) LLP.
The case is Vadim Don Benyatov v. Credit Suisse Securities Europe Ltd., case number QB-2018-001043, in the High Court of Justice of England and Wales.
–Additional reporting by Christopher Crosby. Editing by Alyssa Miller.