Day 37

(1) Bank St Petersburg PJSC (2) Alexander Savelyev v (1) Vitaly Arkhangelsky (2) Julia Arkhangelskaya (3) Oslo Marine Group Ports
LLC

Day 37

April 12, 2016

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April 12, 2016 Day 37

1 Tuesday, 12 April 2016 1 A. Okay, thank you, now I can see.
2 (9.30 am) 2 MR JUSTICE HILDYARD: I don’t quite know what this is that
3 (Proceedings delayed) 3 you are putting to the witness.
4 (9.36 am) 4 MR LORD: Well —
5 MR JUSTICE HILDYARD: Yes, good morning. 5 MR JUSTICE HILDYARD: I know we saw it yesterday, but was it
6 MR LORD: May it please your Lordship. 6 on a website? What is it?
7 MS LUDMILA SIMONOVA (Continued) 7 MR LORD: Yes, my Lord, Dr Arkhangelsky, I took your
8 Cross-examination by MR LORD (Continued) 8 Lordship to it, it is on screen, Dr Arkhangelsky
9 MR LORD: On screen you will see Dr Arkhangelsky’s 16th 9 exhibits it to his witness statement, paragraphs 210 and
10 witness statement, which was the statement for the trial 10 213 at {C1/1/53}. It is a website of Renord-Invest
11 in this case, or the first main statement for this 11 advertising —
12 trial, and at {C1/1/53} of paragraph 210, 12 MR JUSTICE HILDYARD: It is a website description of its
13 Dr Arkhangelsky refers to the land at Tsvelodubovo, and 13 projects, is it?
14 you can see that he refers to an advert for the land on 14 MR LORD: Well, it is advertising this plot for sale,
15 the Renord-Invest website, and it is referred to in 15 I think.
16 the margin, {D174/2906}, and that margin documentary 16 A. Well, I don’t see the date when they start the
17 reference is then on the other screen. It has been very 17 advertisement. Usually any ad has the date. It has to
18 helpfully put up, and that’s the one I asked you about 18 have some plan, and my question is, are they going to —
19 yesterday {D174/2906/5.1} 19 are they trying to sell that; yes?
20 Now, Ms Simonova, did you read Dr Arkhangelsky’s 20 Q. If you look at —
21 witness statement for the purposes of your preparation 21 A. If they’re trying to sell that, they didn’t put this on
22 in this case? 22 the wide range of websites of real estate agencies who
23 A. No, did I liable to read them? 23 could advertise it and who could really sell it. There
24 Q. I’m just asking whether you did. 24 is not even the phone, I don’t see. Oh no, at the
25 A. No, I didn’t. 25 bottom there is a phone. Okay.
1 3

1 Q. And can his Lordship take it, then, that your attention

2 wasn’t drawn to this website entry that we see at

3 {D174/2906/5.1}?

4 A. The one that you showed to me yesterday?

5 Q. Yes, that’s the one.

6 A. I already said I never seen that, especially I don’t

7 recognise that English.

8 Maybe if you will show me the Russian advertisement,

9 maybe I will get familiar. This one I didn’t ever see.

10 Q. You value the land, I think, as at May 2015 at

11 $2.848 million, and you can see that on the website the

12 land is for sale for RUB 2.5 million; can you see that?

13 A. Yes, I see the English translation on the website.

14 Q. And RUB 2.5 million is about US $37,000 at the current

15 exchange rate, or thereabouts, isn’t it, roughly? Let’s

16 say $40,000.

17 A. Well, there is the date of advertisement. You have to

18 use the rate as of that date.

19 MR JUSTICE HILDYARD: Mr Lord, I think the witness asked to

20 see, and for my part I should like to see, the original

21 Russian, please, just for its format and general

22 appearance.

23 MR LORD: I think, my Lord, it is at {D174/2906/6}, and this

24 page, I am helpfully told, I think is at {D174/2906/10}.

25 Thank you very much.

1 But usually when somebody wants to sell something,

2 if you want to sell some apartment, some piece of land,

3 some house, what do you do? You are trying to advertise

4 it as widely, as extensively as you can. Putting this

5 kind of ad just on your own website that nobody could

6 see tells me that this company is not serious to sell

7 that. I don’t know why did they do that, I don’t want

8 to comment on that, but that tells me they are not

9 serious to sell it. If they will be serious, they will

10 put it on the wide variety of real estate agencies’

11 websites, as everybody is doing in Russia, and we will

12 definitely see it, but — and, of course, we will verify

13 it and we will somehow take it into consideration.

14 But to do what they did tells me that they’re just

15 not serious to sell it.

16 MR JUSTICE HILDYARD: Well, Mr Lord, you invited me to

17 re-read 210 and 213 of Dr Arkhangelsky’s witness

18 statement. I do not see that he says that it was for

19 sale. I see that he says that it was a project.

20 MR LORD: Well, if I go to the exhibit, and {D174/2906/5.1}

21 it says:

22 «Renord-Invest Investment Company offers land plots

23 in Leningrad region that are classified as agricultural

24 lands.»

25 Then the particulars are then given later on on this

2 4
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1 website. 1 MR JUSTICE HILDYARD: In Russian, yes please.
2 MR JUSTICE HILDYARD: Let’s have a look at those. 2 THE INTERPRETER: «Renord Investment Company offers or
3 MR LORD: I want to make sure that Ms Simonova has the 3 proposes land plots in the Leningrad region that are
4 Russian as well. 4 classed as agricultural lands.»
5 MR JUSTICE HILDYARD: Yes, of course. 5 MR JUSTICE HILDYARD: I think that’s enough, thank you.
6 MR LORD: There are two — 6 Thank you. I think the translation was «offers or
7 A. I do. 7 proposes». I don’t know whether the interpreters are
8 Q. If we could go to — could you have on screen 8 offering those as alternative words or synonymous words,
9 {D174/2906/5.1}. 9 but I don’t know whether it is going to make that much
10 A. Can I make one little comment, Mr Lord? 10 difference.
11 Q. And {D174/2906/10}. 11 A. Well, it doesn’t say what does it proposing for.
12 A. I want to mention that the English version said 12 MR JUSTICE HILDYARD: No, thank you. You explained that
13 «Renord-Invest Investment Company offers», but the 13 it’s not fleshed out.
14 Russian word is «predlagayet», which not exactly means 14 MR LORD: Then, Ms Simonova, a bit further on, after the
15 they are offering it for sale. 15 properties themselves are described on that page, it
16 MR JUSTICE HILDYARD: Well, perhaps we — 16 says, doesn’t it, that:
17 A. «They propose». The Russian version said, «They 17 «Andrey Shevchenko is the company’s representative
18 propose». Does «propose» mean they are seeking for 18 for issues of acquiring or viewing the plots.»
19 people who will develop these land plots together with 19 It says that, doesn’t it, on that page?
20 them? What does the Renord Company actually mean? 20 A. Yes, I see.
21 I don’t see in the Russian version that this is exact 21 Q. So anybody who read this page would think, wouldn’t
22 offers to sell this land, because they don’t tell 22 they, that these were properties that were potentially
23 anything that usually real estate agency tells you. As 23 for sale?
24 I already said, some piece of land, village of 24 A. Not exactly. Maybe for sale, maybe just for oversight.
25 Seleznyovo, they don’t give exact parameters of that 25 Q. If we go on down, if we go down page by page, one at
5 7

1 land, they don’t give exact features of the land, none,

2 zero. To me it just looks like they are seeking for

3 partners who will maybe develop that together with them,

4 and so that’s not offered for sale.

5 MR LORD: If we were to scroll through this, can we go down

6 page by page in the English and the Russian, so you can

7 help Ms Simonova with the particulars.

8 MR JUSTICE HILDYARD: Do you think that we should have,

9 given the suggestion that the Russian has not been

10 accurately translated into English, do you think that it

11 should be read in Russian and translated by the helpful

12 translators we have in order to know what it says?

13 MR LORD: Yes, my Lord, that is a good suggestion.

14 MR JUSTICE HILDYARD: So, Ms Simonova, could you read the

15 Russian version simply in Russian, and it can then be

16 translated for us by the translators into English.

17 A. Well, what I would say is —

18 MR JUSTICE HILDYARD: No, I don’t want you to say anything.

19 Excuse me, I don’t want you to say anything: I simply

20 want you to read the Russian version, please, in

21 Russian, so that it may, as a first step, be translated

22 into English, because I think you have queried the

23 accuracy of the English translation which appears, the

24 genesis of which I simply am not quite sure about.

25 A. So you want me to read it in English — in Russian?

1 a time if that’s all right, so we have {D174/2906/5.2}

2 and {D174/2906/11} and we can go through if that’s okay.

3 Ms Simonova, is this not the Tsvelodubovo plot?

4 A. Well, there is some low quality photo, and —

5 Q. And doesn’t it say —

6 A. — so I don’t know, I’m not so sure.

7 Q. And doesn’t it say «offer for sale»? Doesn’t it say

8 «offer for sale», Ms Simonova, on that page in Russian?

9 A. No, no, in Russian it doesn’t say. It says, I will do

10 that again:

11 THE INTERPRETER: «Land plot in the Vyborgsky District of

12 the Leningrad region.»

13 MR LORD: Could we scroll down one next page, please

14 {D174/2906/12}, {D174/2906/5.3}.

15 A. Okay.

16 Q. Do you recognise that, Ms Simonova?

17 A. It’s hard to recognise it, it’s just a photo, but

18 I presume this is what it is. Let’s compare to my

19 photos.

20 Q. Right. And if we go to {D174/2906/5.9}, and the

21 equivalent Russian, please.

22 Sorry, can we go back, because I think it is — I am

23 helpfully reminded about the cadastral number. Sorry,

24 could we go back to the one we had before.

25 {D174/2906/5.3}.

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1 A. If the cadastral number is the same as in my report,

2 then it’s — probably it is.

3 Q. And {E8/26/48} is your report on Tsvelodubovo, and you

4 can see the cadastral number is the same.

5 A. Well, just the way it’s presented is a little wrong.

6 I have the exact way it’s on the Russian cadastre, but

7 that’s a minor thing.

8 Q. So it looks, Ms Simonova, as if this is the same land

9 plot at Tsvelodubovo that you valued?

10 A. Yes, it looks like.

11 Q. While we are on this document so we haven’t got to go

12 back to it, could you be shown the Seleznyovo one,

13 {D174/2906/5.9}. Sorry, can you go back to

14 {D174/2906/5.6}. Sorry, Ms Simonova. Could we have

15 {D174/2906/15}, please. Ms Simonova, it looks, doesn’t

16 it, from this website as if this land plot is being

17 offered for sale? That would be a normal interpretation

18 of this website entry, wouldn’t it; that Tsvelodubovo is

19 being offered for sale for RUB 2.5 million?

20 A. I am looking at some certificate of ownership. Maybe

21 I am looking at some wrong page.

22 Q. It’s the back of the sales particulars. Isn’t this just

23 online the sales particulars? Isn’t this just the

24 property and then some information about it, so

25 an interested party or purchaser can see what’s being

1 that this property is for sale, Tsvelodubovo is for sale

2 for RUB 2.5 million, and it has been on sale since for

3 the last, more than a year; does that cause you to

4 revise your opinion as to the value?

5 A. No. No way I will alter my appraisal, because

6 I don’t — I already said I don’t see this company to be

7 seriously advertising this land plot. I don’t see the

8 serious intention to sell it, and even though the

9 English translation said «offer for sale», the Russian

10 page that you showed to me, it doesn’t say «offer for

11 sale», it just says «the land plot in

12 Leningradskaya Oblast».

13 Well, maybe using some analytic skills somebody

14 could find it and look at it, but I’m not sure those who

15 are interested would ever find it, because there are so

16 many competition and offers of different properties, and

17 all the websites or all the big real estate companies’

18 websites, foreign and domestic Russian, and to put it in

19 just your own website tells me that you are not serious

20 to sell it.

21 Q. Could you go, please, to {E7/24/23}, which is

22 Mr Millard’s opinion on the value of the land at

23 Tsvelodubovo. Mr Millard observes that you have used

24 the discounted cash flow approach to value the land, and

25 he has used the sales comparison approach, and I suggest

9 11

1 offered for sale and what sort of title they would get?

2 A. Well, I already stated that you are going to the Russian

3 Government cadastre, you could take the cadastral number

4 which is correctly spelled on my report and incorrectly

5 on these translations, but maybe it’s because the

6 translation is not exact, and you could find that piece

7 of land on the Russian cadastre, I already agreed with

8 that. If you will type it up with dashes, you will

9 never find it.

10 Q. And if you go to {D174/2906/5.8}, and {D174/2906/17} in

11 the Russian, please, don’t you then see the beginning of

12 some particulars for the land plot at Seleznyovo?

13 14.76 hectares if you go to the next page. Isn’t that

14 the same plot that you valued? {D174/2906/5.9}

15 {D174/2906/18}.

16 A. Probably it is. I would have to compare the cadastral

17 number in my report.

18 Q. I think it was accepted yesterday — I think Mr Stroilov

19 accepted yesterday that these were the same land plots.

20 A. Okay, then I agree.

21 Q. And the one that’s at Tsvelodubovo is on sale, according

22 to this website, for RUB 2.5 million, and there is

23 evidence in this case that the property hasn’t — that

24 no one has sought to buy it. Can you just assume — can

25 you assume for one minute that’s right? Just assume

1 to you, Ms Simonova, that the sales comparison approach

2 is the appropriate approach to value this land. That’s

3 right, isn’t it? That’s the more appropriate?

4 A. I think both approaches are valid, but the problem is

5 you have to find sufficient comparables. But if your

6 comparables are not comparable to the land you are

7 appraising, then you have to try to use the other

8 approach; and, most important, you have to take into

9 consideration highest and best use of the land.

10 When I analysed this piece of land, I came to

11 the conclusion that highest and best use is the land for

12 the settlement, in the case of Tsvelodubovo, it’s the

13 land for the single home dachas. In the case of

14 Seleznyovo, this is the land for developing houses where

15 people will be living and commuting to Vyborg City, and

16 so I inserted that into my model, I take that into

17 consideration, when Mr Millard just ignored it.

18 Q. And if you look at your approach, Ms Simonova, the

19 discounted cash flow approach, Mr Millard makes a number

20 of criticisms of the way that you have carried out this

21 calculation; can you see what he says at the bottom of

22 the page about site density? He suggests that you

23 could, even on your approach, 13 houses would be more

24 appropriate; what do you say to that?

25 A. Well, the — again, Mr Millard is assuming that

10 12
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1 30 per cent will be dedicated to infrastructure, but

2 I completely disagree with that. For these kind of

3 homes, he doesn’t need to represent — do you want me to

4 conduct the same calculation and show that this length

5 of the road will be three times exceed the site of this

6 land plot? I just don’t want to make your Lordship

7 tired from the numbers, therefore I completely disagree

8 with Mr Millard saying that we need 30 per cent, and

9 that is the usual requirement. Where is that usual

10 requirement? In what document do you have that usual

11 requirement?

12 Q. And if we go to {E7/24/24}, you can see Mr Millard sets

13 out some further criticism of some of the inputs you

14 have put into your DCF calculation; can you see what he

15 says about construction cost at the top of the page?

16 I assume that you disagree with what Mr Millard says

17 about that; is that right?

18 A. Absolutely.

19 Q. Is there anything you want to say in that regard?

20 A. I don’t agree with that, and the reason is because he

21 want 40 per cent cost to allocate for infrastructure,

22 and he said you have to bring the infrastructure for the

23 long, long distance.

24 Forgive me, but if you will look at the photos

25 I have presented, the electrical line goes right next

1 houses and it’s not a multi-billion dollars skyscraper

2 to get permissions: they are just a small housing that

3 could build very, very quickly. The three years

4 assumption is a very, very conservative assumption. All

5 the houses could build in one year.

6 Q. So how long are you assuming it would take before you

7 could start building, in other words, how long to get

8 the necessary permissions and the design of the project

9 before you actually start construction? How long have

10 you taken, Ms Simonova?

11 A. Well, I assume three months will be enough.

12 Q. And Mr Millard suggests that it would take a number of

13 years, doesn’t he, if you go back to {E7/24/24}, I think

14 that is what he is suggesting.

15 A. Well, I have to tell you that —

16 Q. Three years.

17 A. — I just get all permissions for my house, yes, and

18 it’s in Ukraine, it’s not in Russia, but there are so

19 many similarities in the proceedings, and I get it in

20 one month.

21 Q. And you see what Mr Millard says about marketing on that

22 page, {E7/24/24}. Again, Ms Simonova, do you take issue

23 with that, what he says there?

24 A. Well, that’s true that the foreign ownership on the land

25 is forbidden in Russia, but that doesn’t mean they

13 15

1 door to the site, and the gas pipe is there along

2 the road, and so the cost to connect to that

3 infrastructure will be not that much. It will be

4 exactly the amount that I allocate for the cost of

5 infrastructure.

6 Q. And what about project plan? Do you take issue with

7 what he says about project plan on that page?

8 A. What do you mean? Which point?

9 Q. Sorry, it’s the next entry down on this list of points

10 on your calculation.

11 A. The second paragraph?

12 Q. That’s right, yes.

13 A. No. I don’t assume the construction will start on day

14 one. Let’s look at my model —

15 Q. It’s {E8/26/55}.

16 A. — if someone could find it.

17 Q. {E8/26/55}.

18 A. You could see that the first year there will be only

19 four houses built.

20 Q. So how long do you allow —

21 A. And the second year seven, and the third year seven, and

22 therefore it doesn’t start on day one: there will be

23 time to develop the project, to get all the permissions,

24 but, Mr Lord, we are talking about low value houses that

25 are actually basically very, very — they are cheap

1 couldn’t lease the land.

2 Q. And do you agree that would make marketing the

3 properties harder as a result?

4 A. No, I disagree, and I assume, as I told you, Vyborg will

5 be mostly the Gazprom-involved employees, or employees

6 that are working with Gazprom company, so that will be

7 mostly the citizens of the Russian Federation.

8 Q. And you can see on that page that Mr Millard takes issue

9 with the discount rate you have taken. You have taken

10 10.49 per cent, and I think he is suggesting a discount

11 rate of 35 per cent would be appropriate for this

12 development; what do you say to that?

13 A. Well, I already explained that the established Russian

14 developer, the information is on the Domodoran site and

15 this is the discount rate that they were using, and this

16 is the discount rate that they agree with, and so the

17 fact that the government bonds have different interest

18 is irrelevant in this case.

19 Q. And if you go back to {E7/24/23}, Mr Millard suggests

20 that if you take the average price of agricultural land

21 as a comparable, the right valuation would be $277,500,

22 not your $2.8 million. Ms Simonova, isn’t Mr Millard’s

23 valuation the more realistic, the more accurate?

24 A. Well, if Mr Millard will find better comparables, not

25 the ones that are 120 kilometres away, then that numbers

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1 well, might be relevant, but finding the comparables

2 that are 120 kilometres from the highway, from the site,

3 I considered that not sufficient comparables, because

4 those comparables, that’s a very low value for the land

5 that he is finding, and that’s not sufficient, and also

6 I want to mention that even Mr Millard did not apply to

7 the Renord website and didn’t use that comparables. I’m

8 wondering why.

9 Q. I am going to ask you now about Seleznyovo, if I may,

10 please, and you set out your valuation for his

11 Lordship’s note, it starts at {E8/26/34}, and following,

12 where you deal with it in your main report. Mr Millard

13 looks at your approach at {E7/24/17}. I wonder if we

14 could have both those, if it is possible to have both of

15 those documents up so we could sort of bob between the

16 pages, that would be helpful.

17 Again, Ms Simonova, you have used the discounted

18 cash flow approach and Mr Millard uses the sales

19 comparison approach. Again, I suggest to you that

20 Mr Millard’s approach is the appropriate one and yours

21 is not for this sort of valuation of this property; what

22 do you say to that?

23 A. I already explained that several times, that Mr Millard

24 is not using sufficient comparables. Both approaches

25 are equal, explained in the IVS standards, and if they

1 this is the land basically inside — becoming inside the

2 Vyborg City, and so the use for agriculture is not

3 sufficient. I could even say even more: look at the

4 neighbourhood. There is already housing over there.

5 Q. Could you be shown —

6 A. I take the photos: the houses are there.

7 Q. Could you be shown {E8/26.1/30.1}, please, which I think

8 is the letter you are talking about in relation to

9 Seleznyovo. The Russian is probably at {E8/26.1/31}.

10 If we could have both on screen, if that is possible?

11 A. Yes, it is. Well, the low rise housing construction is,

12 I hope the correct translation for the individual houses

13 that have one or two floors. This is what it is.

14 Q. And it’s the same point, Ms Simonova, as you were asked

15 yesterday, I think. This letter that you rely upon is

16 not a planning permission, is it? It’s just a letter

17 from the Vyborg District of Leningrad Municipality

18 Administration to what it thinks is a dacha non-profit

19 partnership chaired by Ms Vinarskaya saying that:

20 «The Administration of the Municipality … has no

21 fundamental objections to the inclusion of the land plot

22 … into the limits of the city … with the subsequent

23 change of the land’s designation.»

24 I’m just asking you whether or not you are saying

25 that this is actually — that this is all you would need

17 19
1 will be sufficient comparables, the approach that 1 as a developer in order to be able to carry out the
2 Mr Millard used could be used, but because the 2 development that you base your valuation on?
3 comparables are not sufficient, it could not be used, 3 A. This is the most important letter concerning the
4 and therefore using the real data on real sales of 4 category of the land, and ever since this decision was
5 the houses, using the market data on how many houses 5 made that the land is not agricultural anymore, but of
6 could be built, how much they could be sold, I think 6 course, as I already stated yesterday, the project has
7 that’s much more sufficient. 7 to be developed, it has to be approved by sufficient
8 Q. But I think, Ms Simonova, from that last answer, that if 8 Russian authorities, and I think there is not any
9 his Lordship finds that Mr Millard’s comparables are 9 problem to do so.
10 comparables, you don’t take issue with the valuation 10 Q. And if we go back to Mr Millard’s report at {E7/24/17},
11 that Mr Millard derives for Seleznyovo, do you? 11 and to the criticisms he makes of your inputs into the
12 A. With all due respect to my Lord, to your Lordship, 12 DCF model, can you see the heading «Legally possible»?
13 I have my own opinion, independent from any potential 13 Ms Simonova, have you factored into your calculation
14 investor, from the owner, and even, forgive me, from the 14 the time that it would take to get the necessary
15 opinion of his Lordship. 15 permissions and to design the project before you start
16 Q. And if you look at the points that Mr Millard makes on 16 building?
17 your approach, the DCF approach at {E7/24/17}, 17 A. Yes. I take that into consideration. Let’s look at my
18 Mr Millard, under the heading «Legally possible», he 18 model.
19 raises the issue of having to change the use of the land 19 Q. {E8/26/42}, perhaps you could have that on the other
20 from agricultural, doesn’t he? 20 screen and keep Mr Millard’s report on the other.
21 A. We already looked yesterday at these three letters from 21 You see, Ms Simonova, here you seem to have «Number
22 Russian authorities stating that this has already been 22 of houses built», you have 18 for the first year, and
23 decided as a land for settlements. The procedure to 23 then 21 for the next four years; can you see that?
24 change the registration is very simple once the decision 24 A. Yes, I see.
25 of Russian sufficient authorities have been made, and 25 Q. So you are assuming, are you, that building starts
18 20
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1 after — well, 18 over 21, whatever that is, which

2 I should know. How many months are you allowing? One

3 or two months? A month before you start building? It

4 is not many months, is it, because if you are going to

5 build 18 in the first year and then 21 … can you see

6 the point? It doesn’t look as though you are allowing

7 much time after you buy the — how long are you

8 allowing, Ms Simonova?

9 A. Well, I assume about three months, and I think in

10 reality everything could be built even faster, and this

11 is one of the assumptions that are very, very

12 conservative. I think the entire development, again, it

13 could be done in one year, but to be more conservative,

14 I put it over five years.

15 Q. And if you look down that calculation of yours, can you

16 see you have «Number of houses sold» down there? Can

17 you see that line in your calculation?

18 A. Mm hmm.

19 Q. It looks as if you are suggesting that 20 houses could

20 be sold in the first year, 2015; is that right?

21 A. Yes, and I have to state that the best time to sell

22 a lot of houses are at the stage of the foundation,

23 which is very common everywhere in the world, including

24 Britain and America. People buy it on the zero stage,

25 especially for the housing where you could decide some

1 Q. But the point that Mr Millard is making is that that

2 15 kilometres is going to create prohibitive cost for

3 connecting utilities from Vyborg to the Seleznyovo

4 houses, isn’t he? It’s not about how long it takes to

5 drive for a commuter, it’s how much it would cost to

6 link up the relevant utilities, isn’t it? That’s the

7 point that Mr Millard is raising there, isn’t he?

8 A. I disagree. It doesn’t need to bring electrical power

9 line from Vyborg and 15 kilometres where you have the

10 power. The transformer that I have seen next door to

11 that site, it’s there and the fact that the other houses

12 are there, do you think that each house carrying

13 15 kilometres of cable to their house, do you think they

14 are carrying 15 kilometres of water? There is — they

15 are making wells right at the site. You don’t need to

16 carry it that far from the centre of Vyborg. That’s not

17 a good idea.

18 Q. And Mr Millard works out a price per hectare for

19 agricultural land, and if you go to {E7/24/15} he

20 suggested that would give a valuation of this plot of

21 $529,000, not your $24 million, as at May 2015; can you

22 see that, Ms Simonova?

23 A. Yes, I do.

24 Q. And can I suggest that Mr Millard’s valuation is the

25 correct one.

21

1 amenities, some features before the house was built.

2 So, as you know, usually there will be some very

3 common outside design, and the developer will offer

4 several types of housing, and then the buyer could

5 choose, and in the Russian Federation it’s very common

6 that these houses are not sold with mortgages; they are

7 usually sold as one lump sum, because the interest

8 banking rates are too high, people doesn’t want to pay

9 it, and they expect that the prices at the very

10 beginning will be significantly lower than the price —

11 that happened all the time, where the prices at the end

12 of the construction, they are significantly higher than

13 the prices at the beginning.

14 Also, some might be sold to speculators who also

15 like to buy at the so-called basement level, and then

16 sell it — resell it later to final consumers.

17 Q. And if we go to {E7/24/17}, which is Mr Millard’s report

18 again, can you see under the heading «Financially

19 feasible», Mr Millard really says that because — you

20 identify the place of the relevant utilities as Vyborg,

21 which is 15 kilometres away from this site. Is that

22 right, that Vyborg is 15 kilometres away from the

23 Seleznyovo site?

24 A. Yes, that’s true, and to commute 15 kilometres to

25 Vyborg, it’s a very good deal.

23

1 A. What I could comment on the parameters Mr Millard used,

2 the most sensitive parameter is the discount rate, and

3 to me it sounds very strange when Mr Millard is

4 comparing my discount rate used for 2015, and he is

5 saying: Ms Simonova added 1.5 per cent for 2008, and

6 I will do the same.

7 First of all, in 2008 he doesn’t know what discount

8 rate will be in 2015, so that’s very insufficient

9 procedure to do.

10 Second, using the discount rate for 2015, that’s 2.5

11 times bigger, not a small change in the parameters.

12 Third, the justification for that rate: oh, we’re

13 just using that rate. That’s not a good justification.

14 Why didn’t he go to some international websites? Why

15 didn’t he find sufficient data to explain that rate? We

16 are using.

17 I’m sorry, but with all due respect to Jones Lang

18 LaSalle, it is not sufficient justification.

19 Now, also what Mr Millard is doing is, he added

20 RUB 10 million for design and permitting cost.

21 I understand why Mr Millard thinks the RUB 10 million is

22 necessary, because he deals in his practice with big,

23 big buildings in St Petersburg, and big buildings,

24 multi-storey buildings, skyscrapers, they do require

25 that much money for design and permission, but the gated

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1 communities do not need that much money for there, and

2 plus, all that cost already is inserted into the cubic

3 metre price.

4 So by using all that arbitrarily chosen parameters,

5 of course Mr Millard gets a very low number, but this is

6 not the way you are doing these kind of calculations.

7 You have to look at the market and you have to use

8 market parameters and get — then you will get

9 the market number.

10 Q. Ms Simonova, have you ever sold any real estate in

11 Russia? Have you ever been involved in any actual real

12 estate sales?

13 A. No, I don’t have any experience selling anything in —

14 big real estate selling in Russia, but when my mother

15 passed, I was involved in selling her apartment, when

16 some other relatives, when I was doing that I did

17 involved and I had some experience in that.

18 Q. But you have never been involved professionally in

19 selling real estate in Russia?

20 A. Well, if you consider selling some apartments not

21 involved me personally, that’s not true.

22 Q. And have you ever been involved in any professional

23 selling of real estate outside Russia?

24 A. Outside of Russia? Like in Ukraine, yes.

25 Q. I understand that you work as an appraiser. What I’m

1 Q. And have you done any sensitivity analysis in relation

2 to your DCF calculation for the land at Tsvelodubovo?

3 A. No, I already told you.

4 Q. I’m going to ask you — I’m going to try and take it as

5 quickly as I can, the last three properties, one is

6 the —

7 MR JUSTICE HILDYARD: Can I just, sorry, I would do this

8 later, but I think it will be quicker now.

9 MR LORD: Sorry, my Lord.

10 MR JUSTICE HILDYARD: Just about the infrastructural costs

11 in respect of the land at Seleznyovo, I got a bit

12 confused. Can I just ask you about — just tell me what

13 you thought was the existing and proposed electricity

14 infrastructure. I tell you why I am asking, because at

15 {E8/26/34}, you mention that the land plot is

16 5 kilometres from Seleznyovo village, which I assume has

17 electricity, but you do say at {E8/26/37}, under

18 «Utilities», where the bold is for «Electricity»:

19 «A transformer substation will need to be installed

20 that can be connected to the electric infrastructure

21 available in Vyborg.»

22 What did you envisage would be the infrastructure

23 necessary for electricity supply to this new

24 development?

25 A. Every gated community usually has their own transformer

25

1 asking you is whether you have actually been involved in

2 selling land; not for yourself, but for clients, for

3 other people. Have you done that?

4 A. Yes. Yes.

5 Q. Where? Where have you done that?

6 A. In Ukraine.

7 Q. For whom?

8 A. For some clients that — they might ask me to help them

9 to buy something, help them to sell something. That’s

10 a very common practice when you are an appraiser. You

11 mostly considering on appraising, but I even helped one

12 of my clients to build the building, develop it, and

13 that’s some, like, you know, soputstvuyushie uslugi,

14 the services that you give to some of your clients.

15 Q. Have you done any sensitivity analysis in relation to

16 your DCF calculation for the Seleznyovo valuation?

17 A. No, and the reason is because I was using the market

18 parameters, and I was trying to go, as I already told

19 you, on the low end of that market parameters.

20 If you use higher price for the sale price, you will

21 get the higher number, but this is, I don’t need. If

22 you use a lower discount rate, you will, again, get the

23 higher number. This is what I don’t want to do.

24 And the main thing is these market parameters, they

25 vary in the very small range.

27

1 power station. What I mean is that there is the other

2 transformer power station —

3 MR JUSTICE HILDYARD: Yes.

4 A. — that could be — through which the electricity could

5 be connected, but their own electrical transformer power

6 station will be built.

7 So the main cost, according to Mr Lord, will be to

8 bring cable all the way from Vyborg, but there is no

9 need to bring cable all the way from Vyborg: you could

10 bring cable from the next door transformer power

11 station —

12 MR JUSTICE HILDYARD: At Seleznyovo village? The one at

13 Seleznyovo village? What’s the root?

14 A. Yes, I mean Seleznyovo.

15 In the case of Tsvelodubovo, there is the photo of

16 the electrical 10-kilowatt — volt line, and there is no

17 problem to connect to that line. And, of course, you

18 need your own transformer.

19 MR JUSTICE HILDYARD: Yes, and the same goes for gas, does

20 it, which you suggest should be connected to the gas

21 pipeline infrastructure available in Vyborg, which is

22 quite a long way away.

23 A. No, the — I pointed out that there is houses that

24 already have gas, and I think I said that there is the

25 little so-called GRP. It’s a gas distributing point

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1 that is used by the other gases, and you should bring 1 Well, when he’s talking about this apartment, and
2 probably 1 kilometre of gas line, but not 15. 2 I have to explain the both didn’t grant access. When he
3 MR JUSTICE HILDYARD: Right, I didn’t spot that. I will 3 argued about this apartment he said: I apply only to
4 read your report again. Thank you. 4 what I could see in the cadastre. So I don’t know why
5 A. And I stated that Tsvelodubovo, the pipeline is there, 5 Mr Millard has two different approaches towards cadastre
6 I saw it with my own line. It goes along the highway 6 when he applies to two different objects, but all
7 and the land is very close to, like, a couple of hundred 7 I could say is that I have seen the mansard, I have seen
8 metres. 8 the real estate agencies advertising the apartment,
9 MR LORD: I’m going to ask you very quickly about the last 9 saying that there is a second floor. I know that it’s
10 three properties, one is the apartment at number 13, 10 very common for St Petersburg to do that reconstruction.
11 8A Kharkovskaya St. You deal with that, I think, at 11 Yes, it wasn’t registered, it still happens that
12 {E8/26/57}. I would like you to look at Mr Millard’s 12 someone is living there without that and it is common
13 supplementary report, {E7/24/27}, because he looks at 13 everywhere in the world and appraisers could not ignore
14 your valuation, and it is right, isn’t it, Ms Simonova, 14 the fact that the space is there, especially when we
15 that for this property you agree that the sales 15 could clearly see this on these photos from the
16 comparison approach is the appropriate one? 16 internet.
17 A. Yes, Vyborg used the market approach. 17 Q. If you go, please, to {E7/24/29}, Mr Millard looks at
18 Q. And Mr Millard identifies the difference between you 18 the comparables you have taken for valuing this
19 relating to the size of the apartment and to its 19 apartment, and he suggests, Ms Simonova, that the
20 quality? 20 comparables you have taken are from the most prestigious
21 A. Yes. 21 addresses in St Petersburg, and that this flat is not in
22 Q. And if you look at {E7/24/27}, Mr Millard picks up one 22 what would be described as one of the most prestigious
23 point about the size, and there appears to be a point 23 addresses. Is he right to say that? Is that a fair
24 here about the apparent extension of this property into 24 observation on what you have done?
25 the attic or into some sort of mansard level. 25 A. Well, I considered Nevsky Avenue is the most prestigious
29 31
1 A. Yes, this is my photos. 1 avenue in St Petersburg. It’s a central, most
2 Q. And, Ms Simonova, is it right that you are referring to 2 prestigious avenue, and all the comparables are around
3 that mansard, effectively to the building at the very 3 that avenue.
4 top of that block? 4 But maybe, my Lord, we could save some time on this,
5 A. Yes. 5 because that’s just opinion. Mr Millard thinks that
6 Q. Did you check whether or not the land — the registered 6 it’s a lower quality. I see in the photos it’s a very
7 land plot comprised that extension? 7 high quality finishing of this apartment, and he thinks
8 A. Why do I check the land? The land plot under that 8 these comparables are that rather than that, and whether
9 multi-storey building has nothing to do with the square 9 they overlap. I think — just what he think what
10 metres of the apartment. Maybe I didn’t understand the 10 I think.
11 question. 11 MR JUSTICE HILDYARD: Yes, thank you.
12 Q. I think Mr Millard’s point is that it’s not clear 12 MR LORD: Shall I leave it there, my Lord? Shall I move on?
13 whether or not the registered title includes the attic 13 I am conscious of the time. I don’t know how much
14 or mansard level, and therefore if you had developed 14 I need to go through — in a way, an expert is free to
15 into that level without the relevant permission or 15 put in their reports — I’m trying to cover points that
16 title, that might actually damage the value of the flat 16 might have been ventilated —
17 rather than increase it. I think I am summarising what 17 MR JUSTICE HILDYARD: Yes, I think there is a difference of
18 Mr Millard says on {E7/24/27}. Is he right to make that 18 opinion and the problem is as to what I am to do in
19 point, or not? 19 those circumstances —
20 A. I know what is he saying, and I have to explain that 20 MR LORD: Yes, my Lord, I accept that.
21 Mr Millard has two different approaches towards the 21 MR JUSTICE HILDYARD: — and that I have to make a decision.
22 registration and cadastre when he is talking about this 22 MR LORD: I accept that. It may be I don’t need to debate
23 apartment, and, for example, when he is talking about 23 it further with the witness.
24 the railroad. He is saying it is irrelevant that the 24 MR JUSTICE HILDYARD: I think on each point you disagree you
25 railroad is registered in cadastre, it’s not there. 25 have thought about your reports on these remaining
30 32
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1 properties and you adhere to your opinion and you have

2 thought about Mr Millard’s view —

3 A. Yes.

4 MR JUSTICE HILDYARD: — and you disagree with it, and you

5 don’t wish to add anything as regards the reasons for

6 your disagreeing, unless you tell me otherwise? Is that

7 right?

8 A. Absolutely, I agree with you.

9 MR LORD: My Lord, can I leave the — all that is left is

10 the parking spaces and the premises at 22 Pravdy Street.

11 Do I need to take the witness through those?

12 MR JUSTICE HILDYARD: Well, just remind her what they are.

13 Mr Milner, are you anxious that the matters be put

14 ad seriatim? My feeling is that the difference in views

15 will be repeated but I am not convinced that I will find

16 any particular reason for doubting either, if you see

17 what I mean. They are simply statements of opinion.

18 MR MILNER: I agree with that, with respect, my Lord, and

19 indeed, on the parking spaces, at least, it seems very

20 unlikely that the case is going to turn on that,

21 frankly, so I wasn’t necessarily intending to ask

22 anything about that.

23 MR JUSTICE HILDYARD: Very well. Well, if you are content

24 with that. If you want to remind her what they are just

25 in case it sparks any recollection after many days of

1 comparables 30 per cent, he have infrastructure down,

2 the number of housing, 30 per cent. I presume it’s his

3 beloved number.

4 He never showed the comparables for the underground

5 parking, never took them into consideration. But,

6 again, it is such a minor, small number that I think we

7 shouldn’t waste time on that.

8 MR LORD: Can I just ask just one point on Pravdy Street.

9 Could you be shown {E7/24/35}, please, where Mr Millard

10 identifies a property actually in Pravdy Street, number

11 74, and he is able to work out a price per square metre,

12 derived from that comparable transaction. You can see

13 at the foot of the page what he says:

14 «… the offer price is RUB 148,650 per square

15 metre…»

16 And he compares that with the median price you have

17 taken of RUB 431,266. Did you consider, Ms Simonova,

18 whether you should take into account a comparable that

19 is actually in Pravdy Street itself?

20 A. What comparables Mr Millard is using are comparables,

21 residential comparables that could be used as the office

22 spaces. In this case, converting residential into

23 a non-residential is a very difficult process and the

24 Russian authorities are opposed to that very much.

25 Therefore, when we were doing the appraisal, I was

33 35
1 any point that she might wish to make. 1 trying mostly to use this exact, non-residential
2 Ms Simonova, if you have some points where you think 2 comparables, but I think because Mr Millard’s Russian
3 that Mr Millard has simply ignored a facet which you 3 language is not good enough, with all due respect,
4 wish to point out which you haven’t pointed out, you 4 I think he used the residential comparables that can be
5 must say so. Is there anything that’s occurred to you 5 used as non-residential, and very often you could see
6 over the course of your thoughts? 6 that in that city, people will put offices in the
7 A. Well, thank you, my Lord. What I want to state is that 7 residential spaces.
8 the value of these assets, of this real estate, is 8 Q. But Mr Millard identified that Pravdy Street comprised
9 nothing compared to two terminals and the value of 9 six — there were effectively six individual properties:
10 the pieces of land. 10 one residential apartment, four non-residential
11 MR JUSTICE HILDYARD: No. 11 apartments and one office; was he wrong to analyse the
12 A. That’s why I think there is no need to waste time. 12 property in that way, the Pravdy Street properties?
13 The only thing I have to mention is that Mr Millard 13 A. He identifies four non-residential and one residential,
14 was confused with the parking, and because he doesn’t 14 absolutely correct.
15 speak Russian, and he didn’t realise that this is the 15 Q. I’m not sure — just give me a moment — I don’t think
16 underground parking and not on-land parking, and the 16 you identified them, I think you took them all as
17 reason is because it’s very difficult for a non-Russian 17 commercial premises, didn’t you? If you go to
18 speaking person to evaluate sufficiently all the 18 {E8/26/73}, you say «Commercial premises», and you say
19 information that you could find. 19 halfway down the description:
20 I saw on the cadastre that it clearly says this is 20 «I am informed that all six spaces are officially
21 the underground parking, and I evaluated it as 21 registered as commercial office space.»
22 underground parking. Mr Millard finally agreed and 22 In fact, number 6 is a residential flat, isn’t it,
23 said: ah, so what, I will agree and increase my 23 not a commercial office space?
24 underground parking 30 per cent. Why 30 per cent? He 24 A. I just stated in the cadastral numbers and the square
25 just liked the number 30 per cent. He just has 25 metres.
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1 Q. Sorry, Ms Simonova, I am asking you — I am really

2 raising with you whether or not number 6 on your table

3 18 —

4 MR JUSTICE HILDYARD: Italianskiy, do you mean?

5 MR LORD: On table 18, sorry, my Lord, it is my fault,

6 Ms Simonova. The Pravdy Street lot comprises, as

7 I understand it, two large blocks of properties and

8 within that, certain, if you like, subproperties

9 comprised the Pravdy Street asset, and there are four on

10 the ground floor and two on the first floor, and I am

11 asking you about number 6 on your list, which is 22

12 Pravdy Street which I think Mr Millard has identified as

13 a residential flat, whereas I think you have assumed

14 that all six of those properties and cadastre numbers

15 are commercial; is Mr Millard wrong about that?

16 A. Maybe not, but it is only 108 square metres out of

17 1,000 square metres. It’s very small and I think it’s

18 not that important.

19 MR LORD: My Lord, I am sorry to have gone on longer than

20 I had hoped. I hope I have put the points I needed to

21 put to Ms Simonova.

22 Thank you, Ms Simonova.

23 MR MILNER: I don’t have any re-examination, my Lord.

24 Questions by MR JUSTICE HILDYARD

25 MR JUSTICE HILDYARD: Can I ask you two very quick

1 it?

2 A. I agreed that the asset value is different from the

3 value at business valuation. Business valuation is for

4 the owners of the business, but if you are doing asset

5 valuation, you are doing it independently from who owned

6 that business.

7 MR JUSTICE HILDYARD: But would you agree that the question,

8 as it was put by Mr Lord, is how much is that trade

9 related property worth in the market? There would be

10 various ways of assessing how much it is worth in

11 the market, but that, ultimately, is the question to be

12 answered; do you agree?

13 A. If we are appraising trade related property, we are

14 trying to determine what is the value of the market, how

15 much the market participants will pay for that trade

16 related property, and it’s in the case they’re buying

17 the property. In the case they’re buying the business,

18 then we have to appraise the business that involved that

19 property, and we are looking at what market participants

20 are considering.

21 MR JUSTICE HILDYARD: So when you answered, «I don’t see

22 that», I should ignore that, really, shouldn’t I? You

23 do see that, isn’t that right? You do see that as the

24 question, and you do see the difference between the

25 business value and the asset value?

37

1 questions? Do sit down.

2 Can you please go to the transcript for

3 {Day35/61:1}. I wanted to be quite sure I had

4 understood your evidence. You are asked at line 9:

5 «Question: Do you agree that it is necessary when

6 you carry out an asset valuation of the TRP that you

7 must distinguish it from the ownership value of

8 the business?»

9 And you say:

10 «Answer: If you — we already discussed that market

11 value and investment value, and investment value will be

12 the value for the order, and market value will be for

13 any market participants.

14 «Question: That’s right, you have to be careful,

15 don’t you, Ms Simonova, to make sure that you are

16 valuing the value of the land, rather than being drawn

17 into valuing just the value of the business; isn’t that

18 what that sentence is cautioning against? In other

19 words, how much is that property, that TRP, worth in

20 the market?»

21 And you answer:

22 «Answer: I don’t see that.»

23 I wasn’t quite sure what you meant by «I don’t see

24 that» given that I understood you to accept that there

25 was that difference and one must be careful to observe

39

1 A. I agree there’s a big, big difference between the

2 value — I already explained to you technical

3 difference, that the asset value is EBITDA, and the

4 business valuation is conducted on the basis of net

5 income after tax.

6 I explained the other technical issue is,

7 I remember, was the balance sheet, and taking into

8 consideration all other positions of the balance sheet,

9 and then the third explanation is different assumptions.

10 MR JUSTICE HILDYARD: Yes. Thank you.

11 A. How does the market participant behave when they buy

12 some of the assets, and then they buy shares of

13 the company.

14 MR JUSTICE HILDYARD: Yes. Now, my final question, which

15 will raise a wry smile from Mr Lord, since I interrupted

16 him, is as to the necessary characteristics of a trade

17 related property. I wanted to be quite sure in my mind,

18 since some of the answers you gave when I re-read them

19 made me feel that I might not have entirely understood.

20 Is it a necessary characteristic, if a given property is

21 to be characterised as a TRP, that it should presently

22 be being used for some business activity, even if it is

23 not the best use business activity; or is it sufficient

24 that the relevant property be capable of being used in

25 the future for some business activity, even if presently

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1 it is not? I ask that because I gave the example, for 1 questions?
2 example, supposing I have a bit of land near Heathrow 2 Further cross-examination by MR LORD
3 presently used as a bird sanctuary. It is land which is 3 MR LORD: Yes, my Lord.
4 capable of being used to great advantage in 4 Ms Simonova, I think in answer to his Lordship’s
5 the redevelopment of Heathrow, if one ever occurs. Can 5 question, you said — if we could just have [draft]
6 I treat that as TRP, even though presently it has no 6 page 40 of today’s transcript, please, up on screen.
7 business user? It’s the same question, but I give that 7 You said, your first answer to his Lordship’s question
8 as an illustration. 8 was at line 18:
9 A. Trade related property is the property designed for 9 «trade related property is the property designed for
10 specific use. It’s — what it means, that to turn it to 10 specific use.»
11 the other use will require a lot of investment, which 11 So isn’t it right, Ms Simonova, that in the case of
12 might not be feasible and permitted and so on and so on 12 Western Terminal, as at September 2012, you couldn’t say
13 and so on. Therefore, when you are dealing with trade 13 that at that time that property was designed as
14 related property, you have to look is it already 14 a container terminal, was it? It may potentially be
15 designed for that specific use, and if we look at the 15 able to be used as that, but at that time it wasn’t
16 Onega Terminal, it is already designed for that specific 16 designed for that use, was it?
17 use, and I think I explained that in the case of 17 A. Yes. It wasn’t designed for that container use, but it
18 Western Terminal, it’s already trade related but 18 again had potential use, as my Lord has mentioned, and
19 designed for the non-efficient use. So we have to also 19 that potential use was to use it as a container
20 use as that highest and best use — 20 terminal. So this is — you have to look at both, at
21 MR JUSTICE HILDYARD: That I understand. I’m sorry to 21 trade related property and highest and best use, because
22 interrupt you, I understand that, but let us focus on my 22 market value, according to the standard, will include,
23 illustration. I have this bird sanctuary. It is not 23 not should include, not maybe include, maybe not: it
24 used for business purposes, in fact, the one thing that 24 will include the highest and best use of the property.
25 I would hate as the bird fancier is for it to be so, but 25 Q. But if you read on in your answer, I must say, I had

41

1 it is capable of being used as part of the Heathrow

2 complex if planning permission were ever granted.

3 Now, is that bird sanctuary, on a willing

4 purchaser/willing vendor assessment of market value,

5 capable of being trade related property, even though

6 presently it is not used for any trade related purpose?

7 A. If you first studied highest and best use of that piece

8 of land, and if it is permitted to use for the

9 airport — poor birds, I’m very sorry for them — but

10 now you could use it for the airport, and when you

11 evaluate it you have to take into consideration the

12 possibility, the potential for that.

13 MR JUSTICE HILDYARD: So the answer is: yes, it can —

14 A. Yes. Any investor who will look at that piece of land

15 will think: what is the probability that the —

16 MR JUSTICE HILDYARD: I understand the thought process of

17 a potential purchaser, please understand me, but I just

18 wanted to be quite clear that there isn’t some

19 characteristic which is required to be demonstrated in

20 respect of the existing state of the land, and I think

21 your answer is no, it doesn’t, potentiality suffices; do

22 I have that right?

23 A. Yes, my Lord, exactly.

24 MR JUSTICE HILDYARD: Thank you. I think those are all my

25 questions. Do any arise out of those additional

43

1 understood you to be saying the way you look at

2 Western Terminal, if you look at [draft] line 22:

3 «Therefore, when you are dealing with trade related

4 property, you have to look is it already designed for

5 that specific use, and if we look at the Onega Terminal,

6 it is already designed for that specific use.»

7 I must say, Ms Simonova, I had understood your

8 answer really to be that you are looking at the current

9 design of the property that you are valuing; in other

10 words, is it currently designed as a container

11 transshipment terminal or not? Is that not how to read

12 your evidence there?

13 A. The answer is no. It could be — the highest and best

14 use could be current, which is for the Onega Terminal.

15 The highest and best use could be potential, and this is

16 why we take into consideration how much money has to be

17 invested, and consider that as a negative cash flow.

18 Q. But his Lordship, I think, was asking you about not

19 highest and best use, but the label «trade related

20 property». Focus on that for a minute. I am suggesting

21 that in your answers to his Lordship’s questions, you

22 seem to be saying — to accept — that you are looking

23 at the existing design of the property, not whether

24 potentially you could develop the property into

25 a particular trade. Is that not how to interpret your

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1 evidence? I think you are saying no. I’m not sure 1 first one you gave on 17 February 2014 at {E6/23/1}, and
2 quite why, but if you want to explain why, then please 2 you ought to find your report there. I am trying to
3 do. 3 find the last page, which seems to be missing from my —
4 A. No. You again forget about the most important 4 A. The signature page?
5 requirement for market value, which is market value will 5 Q. Yes.
6 reflect highest and best use of the — 6 A. Page 13.
7 MR JUSTICE HILDYARD: I think I have the point. I think 7 Q. Yes. {E6/23/13}. Can you confirm that this is your
8 that your position is this: that you look at the 8 first report?
9 potentiality of land and whether it has a trade related 9 A. Yes.
10 purpose potential. You then try and identify what the 10 Q. And then at {E7/24/1}, you have your — I think the
11 best trade related purpose would be. If that trade 11 first supplemental dated 18 September 2015, which you
12 related purpose, though the best, is not what it is 12 sign at {E7/24/3}; can you confirm that that is, indeed,
13 being used for at the present, it will have to be 13 your supplemental report of that date?
14 converted at some cost. The cost will be a minus figure 14 A. I confirm.
15 against your assessment of the value; is that correct? 15 Q. And then at {E7/25/1} is a further supplementary report
16 A. Exactly, my Lord. 16 of yours, dated 2 November 2015, which you sign at
17 MR JUSTICE HILDYARD: Thank you. 17 {E7/25/3}. Again, can you confirm that that is
18 MR LORD: Thank you. 18 a further supplementary report of yours of that date?
19 MR JUSTICE HILDYARD: No other questions. 19 A. I can.
20 Ms Simonova, I’m so sorry that the time you have had 20 Q. And then there is a joint statement which you have
21 to take, given also that you are not charging for it, 21 signed along with Ms Simonova, and that’s to be found at
22 and I am very grateful to you for your assistance. 22 {E8/29/1}, and you have signed it at {E8/29/5}; can you
23 Thank you. 23 confirm that that is the joint statement that you and
24 Would that be a reasonable time to have a break? 24 Ms Simonova signed?
25 I am sorry to you all for being — we are a bit behind 25 A. I can.
45 47

1 schedule, but let’s hope we can make it up.

2 (11.07 am)

3 (A short break)

4 (11.16 am)

5 MR LORD: My Lord, may I please call Mr Millard.

6 MR TIMOTHY JOHN MILLARD (Affirmed)

7 MR JUSTICE HILDYARD: Mr Millard, do sit down. I hope you

8 have some new water.

9 A. I do, thank you.

10 MR JUSTICE HILDYARD: Yes.

11 Examination-in-chief by MR LORD

12 MR LORD: Mr Millard, although obviously you set it out in

13 your reports in more detail, could you give his Lordship

14 just very, very succinctly what your relevant experience

15 is to give this evidence on valuations, please.

16 A. Okay, I’m head of the advisory department for Jones Lang

17 LaSalle in Russia and the CIS. I am head of valuation

18 also of strategic consulting and advise on development

19 matters in the research department and the hospitality

20 department. I have been practising in Russia since

21 2002, and the whole time I have been based in Moscow,

22 apart from a short time where I was working for a major

23 property company in St Petersburg in 2012.

24 Q. Thank you. Mr Millard, you have given a number of

25 reports in this matter. Could you please look at the

1 Q. Can you confirm to his Lordship that those reports of

2 yours, along with the joint statement, comprise your

3 expert opinion on the matters that you opined upon in

4 this case?

5 A. I can.

6 MR LORD: Thank you, Mr Millard.

7 MR JUSTICE HILDYARD: Might you speak a little closer to

8 the microphone. It is my fault, I am a little hard of

9 hearing.

10 A. Is that better?

11 MR JUSTICE HILDYARD: That is really helpful. Thank you.

12 Cross-examination by MR MILNER

13 MR MILNER: Mr Millard, you said you were the original

14 director for Russia and the CIS for JLL; is that right?

15 A. Yes.

16 Q. And you have been working in Russia since 2002?

17 A. Yes.

18 Q. Mostly in Moscow.

19 A. Yes.

20 Q. How well do you read Russian?

21 A. I read Russian well.

22 Q. Do you speak Russian well as well?

23 A. I do.

24 Q. You have quite a lot of familiarity with the business

25 climate in Russia; is that fair?

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1 A. Yes.

2 Q. For a western professional services firm like yours,

3 Russia can be a challenging place to operate; would you

4 agree with that?

5 A. I would say I’m not sure that it necessarily applies to

6 a western firm such as ours. Jones Lang LaSalle has

7 been there for some considerable time, more than

8 15 years, I think. There are ups and downs in

9 the Russian economy and there are challenges, certainly,

10 to doing business in Russia in general. I’m not sure

11 that it would be any more or less for our company.

12 Q. Is one of the challenges for doing business in Russia

13 generally corruption?

14 A. I can honestly say that I have never personally come

15 across corruption in terms of doing our business, so in

16 terms of what I do on a day-to-day basis, I have not

17 come across it, and you will see that I was actually

18 head of another company in Russia for a while, so I’m

19 perhaps in a position to know that reasonably well.

20 I am, however, aware from the clients that we work

21 with, and certainly from the strategic consulting

22 business where we are advising developers on

23 a day-to-day basis about how to develop their property

24 of some of the issues and the unusual processes that

25 they would need to go through in order to get permits

1 this case?

2 A. No.

3 Q. Now, in terms of your experience, you said you have been

4 based in Moscow for most of your time in Russia; have

5 you ever valued a sea port terminal prior to undertaking

6 this assignment?

7 A. I have not.

8 Q. Now, I want to ask you some questions generally about

9 valuation practice —

10 A. Yes.

11 Q. — before we look at the individual assets that we are

12 concerned with. You have set out in your three reports

13 to identify the market value of the various assets; is

14 that right?

15 A. That’s right.

16 Q. So that we are clear about what market value means, is

17 it right that market value is the price at which you

18 would expect the asset to be sold by a willing buyer to

19 a willing seller in an arm’s length transaction after

20 proper marketing?

21 A. Yes, broadly.

22 Q. And there are, broadly, three main approaches to

23 assessing market value, aren’t there: the income

24 approach, the market approach, and the cost approach?

25 A. Yes, that is correct. The cost approach actually under

49 51

1 and in order to carry out the development process.

2 I think it is different for different businesses, but it

3 is not something that I have actually any personal

4 direct involvement or understanding of.

5 Q. Are you aware of any examples of western professional

6 services firms like yours being influenced, or being

7 sought to be influenced, in relation to their activities

8 for political reasons?

9 A. For political reasons, no, I have no direct knowledge of

10 that. There are some rumours, but I will not opine on

11 those. I have no direct knowledge.

12 Q. Now, this case has attracted some publicity in Russia,

13 hasn’t it?

14 A. I believe so.

15 Q. It has been reported in the press, hasn’t it, that

16 Mr Arkhangelsky has accused some quite senior people of

17 involvement in corruption; are you aware of that?

18 A. I’m not. I haven’t read the press reports.

19 Q. Have you had any discussions with anyone in your firm

20 about the political sensitivities attaching to this

21 case?

22 A. I have not.

23 Q. Have you had any discussions — and I am not talking

24 about lawyers here, so leave that to one side — any

25 discussions with anyone else outside your firm about

1 RICS regulations is broadly considered not to be

2 a market value and is only used in rare circumstances

3 where the market is of a very specialist nature.

4 Q. Yes, well, we don’t need to concern ourselves with the

5 cost approach in this case.

6 As for the income approach, it is right, isn’t it,

7 that that involves looking at the cash flows that an

8 asset is expected to generate over time and converting

9 them into a capital sum by applying an appropriate

10 discount rate?

11 A. That’s one method under the income approach. There’s

12 two broadly recognised approaches: the first is the

13 discounted cash flow approach, which looks at the future

14 cash flows. The second is the direct capitalisation

15 method where you look at the current income and apply

16 a capitalisation rate to turn that into a capital value:

17 that’s a more static approach, but it is still an income

18 valuation.

19 Q. Whereas a market approach looks at what comparable

20 assets sell for and making adjustments as necessary to

21 reflect the differences between the comparable assets

22 and the subject assets; is that right?

23 A. That is correct.

24 Q. And is it also right that where you are valuing assets

25 which are held in conjunction with other assets which

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1 are complementary or related, you need to decide whether

2 to value the assets as a complex of assets, and then

3 apportion the value between them; or to value the assets

4 on a standalone basis?

5 A. I think it will depend on the individual nature of each

6 individual property, or collection of properties, that

7 is being valued, in that if it was something that would

8 ordinarily be marketed as a single entity, then you

9 would probably value it on that basis. If it was

10 capable of being split up and sold separately and that

11 would produce a higher valuation, then it would be

12 perfectly legitimate to look at them separately.

13 Q. So is it right that whichever approach produces the

14 higher valuation you would opt for?

15 A. Yes, in that the highest and best use would produce the

16 highest valuation, if the highest and best use would be

17 to use the properties together, and that that was

18 legally possible and physically possible, then that

19 would be the correct approach to take.

20 Q. And where valuing them together gives rise to a higher

21 valuation, that’s the concept known as synergistic

22 value; is that right?

23 A. Yes, marriage value, yes, but it is the same thing.

24 Q. Right. Can we then look at your valuation of

25 Western Terminal. You have adopted a market approach,

1 the growth in prices for warehouse properties over the

2 same period, which points to an increase of 68 per cent,

3 and you apply that to your base figure of 1.1 million,

4 and add the 100 per cent premium for the berths, and

5 that gives you a figure of $21.3 million; is that right?

6 A. Yes, but the base figure would have been 800,000 after

7 the 30 per cent adjustment, and it would have been

8 applied to that.

9 Q. Yes.

10 Now, it is fair to say, isn’t it, that there is

11 a fundamental difference between yourself and

12 Ms Simonova as to whether the market approach that you

13 have used is the correct approach for this property?

14 A. That’s fair to say.

15 Q. And one of the reasons for that is that you disagree

16 over whether the terminal should be treated as trade

17 related property; is that right?

18 A. Yes, correct.

19 Q. Now, so that we are clear, would you agree that if you

20 had an asset which was undoubtedly trade related

21 property, like a hotel or a petrol station, it would be

22 appropriate to use an income-based approach?

23 A. It is appropriate to use an income-based approach. It

24 doesn’t only depend on it being a trade related

25 property, you can use the income approach regardless of

53

1 haven’t you; that’s to say you have tried to estimate

2 the market value by reference to the value of other more

3 or less comparable assets?

4 A. Yes.

5 Q. And I think it is right that you essentially proceeded

6 in four steps, but let me run through them and you can

7 tell me if I have understood this correctly. Your

8 starting point is to take an average price for

9 industrial land in the St Petersburg region as at the

10 valuation date, and that produces a figure of about

11 $1.1 million per hectare, and this is at {E6/23/47} if

12 you want to look at it.

13 Then as step two, you have discounted that by

14 30 per cent to arrive at a realistic sale price as

15 opposed to an asking price?

16 A. Yes.

17 Q. And that gives you a figure of just over $800,000

18 a hectare; is that right?

19 A. Correct.

20 Q. Then you have added a 100 per cent premium to reflect

21 the fact that the land has the berths attached to it?

22 A. Yes.

23 Q. And that gives you an overall value of $11.85 million as

24 at June 2009. Then finally, step four, is to

25 extrapolate the value in 2012, which you do by analysing

55

1 whether it is a trade related property, and a trade

2 related property can also be valued on a comparable

3 basis: hotels often are, for instance, because they are

4 sold quite often on a pound or dollar or rouble per room

5 basis, and that’s often used as a basis for valuing

6 them, and hotels clearly are trade related properties.

7 But the income approach is one way to look at trade

8 related properties, I would agree with that.

9 Q. You said that you can use an income approach for

10 properties that aren’t trade related?

11 A. Correct.

12 Q. Could you expand on that: when would you do that?

13 A. Well, really any building or property which is purchased

14 as an investment, ie because you are earning income from

15 it, is commonly valued on an income basis, whether that

16 is a discounted cash flow, a term and reversion basis or

17 a direct capitalisation basis, in fact, even if you are

18 looking at a market basis for an investment property,

19 for instance, an office building, which is clearly — if

20 it is leased out to tenants and is earning an income and

21 you are buying the income, even if you are looking at

22 comparables, the comparables have probably also been

23 bought on the basis of the income. So actually even

24 when you are using the market approach, you are actually

25 basing that on properties that have been bought for

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1 their income-producing ability. 1 can be trade related, is it?
2 So it gets a little bit fuzzy, but whenever you are 2 A. No.
3 purchasing a current or future income stream, then you 3 Q. And there is no such exhaustive list anywhere, is there?
4 should certainly be looking at the income approach. 4 A. No, there isn’t.
5 Q. So is it fair to say that whether the asset is trade 5 Q. So it’s fair to say, isn’t it, that unless you are
6 related property or not is an important question in 6 dealing with one of those common examples that’s named
7 deciding what the appropriate method is, but not 7 in this guidance, like a pub or a hotel, you have to
8 necessarily decisive? 8 form a judgment, don’t you, as to whether the nature of
9 A. Yes, not the only question, but it is an important 9 the property and the link between the property and the
10 question. 10 trading potential, is sufficient to make it appropriate
11 Q. Since it is an important question, let’s consider 11 to value it as — to value it on the basis of the income
12 whether Western Terminal is trade related property. 12 that the property will generate?
13 In terms of the definition of trade related 13 A. I would say it’s not so much the nature of the property
14 property, can we just establish what guidance exists on 14 but the specific form, and more than that, actually, you
15 that. There is a definition, isn’t there, in the 15 will see that it says «has been designed or adapted»; so
16 international valuation standards — 16 it is the existing form and structure of the building
17 A. Yes. 17 makes it specifically designed, and therefore — for one
18 Q. — and also in the RICS glossary? 18 use — and therefore would be very difficult to use for
19 A. Yes. 19 a different use without a significant level of
20 Q. And that definition is that: 20 investment.
21 «trade related property is any type of real property 21 Q. But would you agree that, leaving aside changes of
22 designed for a specific type of business where the 22 use — and I will come back to that — you have to make
23 property value reflects the trading potential for that 23 a judgment, don’t you, about whether the link between
24 business.» 24 the property and the trading potential is strong enough,
25 A. Yes. 25 clear enough, to make it reasonable to value the
57 59

1 Q. Are you familiar with that?

2 A. I am.

3 Q. So that’s the test. Then it is expanded on in

4 the document known as VPGA4; are you familiar with that?

5 A. I am.

6 Q. That’s at {E7/24/96}. If you look at paragraph 1.3, it

7 says that:

8 «Certain properties are normally bought and sold on

9 the basis of their trading potential. Examples include

10 hotels, pubs and bars … the essential characteristic

11 of this type of property is that it has been designed or

12 adapted for a specific use, and the resulting lack of

13 flexibility usually means that the value of the property

14 interest is intrinsically linked to the returns that

15 an owner can generate from that use. The value

16 therefore reflects the trading potential of

17 the property. It can be contrasted with generic

18 property that can be occupied by a range of different

19 business users such as standard office, industrial or

20 retail property.»

21 Now, it’s clear, isn’t it, that the examples given

22 in the text, hotels, pubs and so on, are just that:

23 examples?

24 A. Yes.

25 Q. It is not an exhaustive list of types of property which

1 property by reference to the income that it generates?

2 A. To go back, you can use the income approach regardless

3 of whether the property is a trade related property or

4 not. I’m not sure that it’s necessarily, or should be,

5 a huge issue. If you value on the basis of trading

6 related property you can do it on an income approach,

7 you can do it on a market approach.

8 It is clear from the guidance later on that if you

9 go down that route, then you do need to make

10 an apportionment between the value which attaches to

11 the property and that which attaches to the business,

12 be it entrepreneurial spirit, management, excellence of

13 the existing management, licences, other payments that

14 you may need to make in order to operate that business,

15 but it is certainly one of the things that you need to

16 look at, and to go back to a trade related property, and

17 if I may touch on my Lordship’s earlier example, if it

18 is a bird sanctuary, it is clearly not a trade related

19 property in my view, because that’s not designed for

20 a specific use that could not be easily used for

21 something else.

22 Q. Yes, the simple point, Mr Millard, is there are some

23 properties which are clearly trade related, like

24 a hotel, for example?

25 A. Yes.

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1 Q. There are also some properties which are clearly not,

2 like an office building, and the reason it is not trade

3 related is you have no idea what business will be

4 carried on there. It could be a very profitable

5 business, it could be a less profitable business, and

6 there’s really no way for a valuer in the abstract to

7 know that.

8 So outside those two extremes, there is a grey area

9 in the middle, isn’t there, where different people could

10 perhaps take different views as to whether it is

11 appropriate to value it as trade related property or

12 not.

13 A. I think this is — and there has been quite an ongoing

14 debate in the profession and I think this is why it is.

15 I mean, if you look, actually, at an office building,

16 you could make quite a strong case that it is a trade

17 related property, because actually in most cases it

18 would be extraordinarily difficult to use it for

19 anything other than an office, but they are not valued

20 and sold on that basis: they are valued and sold on the

21 basis of the income that you can produce and the income

22 is usually in a rent which is based on a market rental

23 value, and similarly for hotels, you know, you would

24 look at the income-producing capacity.

25 There is a grey area. Some people may take a view

1 knowledge, so clearly somebody had the idea of saying:

2 here is a — let’s assume, somebody had the idea of

3 saying: here is an office building, we are going to turn

4 it into a coffee shop, because there is a new court

5 opening, there will be lots of passing trade and it’s

6 a great business proposition. Now, I think you would

7 agree, if they were selling that coffee shop today, it

8 would be valued as a trade related property, because it

9 is a coffee shop?

10 A. No, I’m not sure that’s necessarily the case. Now, if

11 they were selling the coffee business, including the

12 coffee machines and the coffee beans and everything

13 else, on the basis that it makes money from being

14 a coffee shop, then you would be looking at the value of

15 that business, but I think in that case they probably

16 actually rent the shop and the owner does something else

17 and he would be selling it on the basis of an investment

18 on the rent that he earns from the shop.

19 So there is a clear distinction between something

20 that would be sold as a business where the property is

21 an intrinsic part of it and could not easily be

22 separated from it. I don’t think that would be the case

23 for a coffee shop.

24 Q. Well, the guidance says pubs and bars are examples of

25 trade related properties, so I was assuming it wouldn’t

61

1 on what a trade related property is or is not: it should

2 not affect the market value because the market value is

3 what a willing purchaser would pay in an arm’s length

4 transaction from a willing seller and the market value

5 should be the same regardless of whether it is a trade

6 related property or not.

7 Q. Can we come back to the question of changes of use. Is

8 it your position, then, that if the highest and best use

9 is for a trade related purpose, but the property is not

10 currently being used for a trade related purpose, you

11 cannot then value it as trade related property?

12 A. If you are valuing it on that basis, you will end up

13 with a property that becomes a trade related property.

14 When you look at the terminal or exit value, you may

15 want to calculate the exit value on the basis that it is

16 now a trade related property, but it clearly would not

17 be a trade related property today. Almost by definition

18 if you have to invest serious money into upgrading or

19 changing something, it is not a trade related property,

20 because it is not its existing use.

21 Q. Can I give you an example, perhaps, with respect,

22 slightly more realistic than the bird sanctuary example.

23 Next to this building there is a coffee shop.

24 A. Yes.

25 Q. It didn’t exist before this building opened, to my

63

1 be a huge leap from a bar, for example, to a coffee

2 shop?

3 A. Bars have very specific licences and there are,

4 certainly in this country, quite strict licensing rules,

5 which is why they often trade. It is another reason

6 actually when you see that pubs are closing down on a

7 massive scale in the UK today, why there is a debate

8 today about whether the trade related property

9 definition is any longer valid.

10 Q. Let’s take a bar, in that case. Somebody decides —

11 there is a new court opening — even better, there are

12 lots of lawyers, what they want is a bar that they can

13 go to after the end of the court day. Now, if that bar

14 exists today, it will be valued as trade related

15 property; correct?

16 A. Yes. It will be.

17 Q. But on the day before the bar opens, or — well, let’s

18 say a year before the bar opens, somebody has the idea

19 of creating a bar next door to the court. They come up

20 with a business plan, they work out what profit they are

21 going to earn and so on. You say necessarily it cannot

22 then be valued as trade related property because it

23 hasn’t yet been converted into a bar; is that right?

24 A. Correct.

25 Q. So the same asset has to be valued in a different way

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1 because the investment hasn’t yet occurred; is that

2 right?

3 A. Again, you can use the income approach and you can use

4 the discounted cash flow, regardless of whether

5 a property is or is not a trade related property, and

6 because you are arriving at a market value, which is

7 what the asset should trade for in a theoretical arm’s

8 length transaction, the answer should be the same,

9 however you get at it.

10 But if a property has not been adapted for

11 a specific use, it is not a trade related property.

12 Q. Is there, in fact, a grey area within the grey area, so

13 to speak: if you take the example of a hotel, which

14 I think you agreed was a trade related property —

15 A. Yes.

16 Q. — what if somebody buys, say, a three-star hotel with

17 a view to turning it into a five-star hotel: it is still

18 a hotel.

19 A. It is.

20 Q. But it requires significant investment to upgrade it to

21 that extent?

22 A. Yes.

23 Q. And as a business proposition, it may be quite different

24 from the hotel that’s been operated previously?

25 A. Yes.

1 A. Correct.

2 Q. And that’s why you apply a 100 per cent premium to your

3 land value?

4 A. Yes.

5 Q. Now, the reason they carry that extra value is because

6 they give you the opportunity to trade as a port

7 terminal; is that right?

8 A. Yes.

9 Q. So anybody buying the property and paying a premium for

10 that site would do so with a view to using it as

11 a commercial port facility, wouldn’t they?

12 A. You would expect so, yes.

13 Q. They wouldn’t buy it just to use as a warehouse, for

14 example?

15 A. Unlikely.

16 Q. So it follows, doesn’t it, that the land at the port is

17 designed, or adapted, for a specific use?

18 A. I would not say that it’s — the berth is designed for

19 a specific use, for the mooring and loading and

20 unloading of boats. The land around it is just that: it

21 is land that has not been adapted for any purpose

22 whatsoever. It is used in connection with the berth,

23 but I don’t think you could characterise it as being

24 adapted specifically for any use.

25 Q. Well, land which is part of a port terminal doesn’t need

65 67

1 Q. But you would still treat it as a hotel, wouldn’t you,

2 and value it as a trade related property?

3 A. You would.

4 Q. So it’s a question of degree, isn’t it? There aren’t

5 any bright lines in this area; is that fair? You have

6 to use your experience and judgment to work out whether

7 the way in which the property is being used or is about

8 to be used, more relevantly, is sufficiently connected

9 to the land for it to be a valid basis for valuing the

10 asset?

11 A. Yes, to a point.

12 Q. Now, moving back to Western Terminal, Western Terminal

13 is a port facility with two berths in the big port of

14 St Petersburg, isn’t it?

15 A. Yes.

16 Q. Sorry, if you nod it doesn’t get on the transcript.

17 A. Sorry, no, it’s because I’m considering my answer, but

18 yes, there are two berths there, it is clear from my

19 report. One of them is largely non operational, but

20 there are two berths.

21 Q. Yes, I would hope we could at least agree on that.

22 Now, you agree, don’t you, that the berths, and the

23 access to the sea which they give you, carry

24 a substantial premium over what you would pay for

25 a similar asset without any access to the sea?

1 a great deal of adaptation in the same way that

2 a building needs to be adapted to become a hotel, does

3 it, because it’s just land that just sits there and has

4 containers or whatever the cargo might be stored on it?

5 A. Correct, and that is why it could easily be used for any

6 other purpose, which is why it sort of negates against

7 the trade related property definition; ie someone could,

8 if they chose, and people do, build a nice big house

9 next to the waterfront because they like the views and

10 the island outside. The intention of the person who

11 buys it is irrelevant, and the fact is, it is land that

12 could be used for, really, any use whatsoever.

13 Q. You are not suggesting, are you, that anybody would

14 build a house in the big port of St Petersburg?

15 A. I’ve seen stranger things in Russia.

16 Q. Are you suggesting that?

17 A. No, I’m not.

18 Q. No. And I think you agree that, in fact, anybody buying

19 it would buy it to use it as a port terminal, so that is

20 the specific use it is going to be used for: it is not

21 generic industrial property, is it?

22 A. It’s not generic industrial property in that there are

23 no industrial buildings on the land. It is generic bare

24 land which is adjacent to a berth and therefore is

25 suitable for berth use. But in terms of the nature of

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1 the land itself, it is very much generic.

2 Q. And anybody who was considering buying it would be

3 keenly interested in how much money they were going to

4 make from using it as a port terminal, wouldn’t they?

5 A. Yes.

6 Q. So there is a close connection, isn’t there, between the

7 price that a buyer would pay and the returns that he

8 would expect to generate; is that right?

9 A. That’s correct.

10 Q. So it does, therefore, satisfy the core conditions to be

11 classified as trade related property, doesn’t it?

12 A. Well, I don’t believe so and I think I have explained

13 the reasons why. The fact that someone buys any

14 property, be it an office or a shop or any asset, in

15 fact, in order to make income out of it, that’s just

16 a standard investment. That does not make something

17 a trade related property just because you want to earn

18 money from it.

19 Q. And if the highest and best use was as a container

20 terminal —

21 A. Yes.

22 Q. — then that would require some investment to develop it

23 into a container terminal, but that’s not inconsistent

24 with the terminal being trade related property, is it?

25 It is rather analogous to the three-star hotel being

1 A. Yes, that’s exactly the case: the market value is what

2 a willing buyer and willing seller would agree to

3 transact a sale at. Everything else is a little bit

4 noise, and it is a little bit technical.

5 MR JUSTICE HILDYARD: And equally, with respect, the

6 suggestion that land could be used for some other

7 purpose cannot, can it, be an indication of the sort of

8 parameters for which valuation, because someone doesn’t

9 look at land and simply say: well, I could use it for

10 a less profitable activity —

11 A. Correct.

12 MR JUSTICE HILDYARD: — they look at it at its most

13 profitable activity.

14 A. Which is the concept of the highest and best use, which

15 is why you go through that process, but it is important

16 that highest and best use is a completely different

17 concept from trade related property.

18 MR JUSTICE HILDYARD: I thought trade related property was

19 an example which led you straight to best use. I mean,

20 otherwise it is all so mechanical and the tail wags the

21 dog. The dog is market value. The question is how you

22 get there.

23 A. Yes. That’s correct.

24 MR JUSTICE HILDYARD: Isn’t that right? Anyway …

25 A. If I may, one of the characteristics of a trade related

69

1 upgraded into a five-star hotel?

2 A. After the significant level of investment I agree the

3 property may well be a trade related property. As

4 I hope I’ve pointed out, that may not necessarily affect

5 how you go about valuing it.

6 MR JUSTICE HILDYARD: There’s a certain mechanistic quality

7 that you are suggesting which I find difficult as

8 a matter of reaction. I mean, people pay for

9 potentiality.

10 A. Yes.

11 MR JUSTICE HILDYARD: Some people pay because they want to

12 live in a nice area.

13 A. Yes.

14 MR JUSTICE HILDYARD: Some people pay because they can make

15 a lot of money out of a given activity.

16 A. Yes.

17 MR JUSTICE HILDYARD: If the given activity is possible, it

18 is a potential of the land to use it for the activity —

19 A. Yes.

20 MR JUSTICE HILDYARD: — someone is going to pay for it.

21 A. Yes.

22 MR JUSTICE HILDYARD: And the only question is whether there

23 is a market established as to how much, or if there is

24 not such a market, you have to work it out and that’s

25 the end of it, isn’t it?

71

1 property is it would be difficult to use it for anything

2 else. So almost by definition its best use is its

3 current use because it would be difficult to do

4 something else with it. So it kind of takes away that

5 step. But the best use is the most valuable use and you

6 would expect, all things being equal, that

7 a knowledgeable buyer, which is the test, would want to

8 put the land to its most profitable use.

9 MR MILNER: I’m grateful, my Lord.

10 Mr Millard, if we can just cut through this, then,

11 the highest and best use of the Western Terminal is as

12 a port facility of some kind.

13 A. Yes.

14 Q. You don’t comment, do you, on whether a container

15 facility would be the highest and best use, or it would

16 be some other kind of port facility. That makes it

17 appropriate to value it on the basis of the expected

18 future cash flows rather than some other basis?

19 A. Yes. That’s one methodology of doing it, yes.

20 Q. Right, thank you. And in fact it would be more

21 appropriate to value it on that basis rather than on the

22 comparable basis that you have used, wouldn’t it?

23 A. Well, with respect, I think if I thought it was more

24 appropriate I would have done it on that basis.

25 I don’t think it is more appropriate because

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1 I pointed out in my supplementary, there are a number of 1 of how they relate to each other, I’m quite comfortable
2 difficulties and challenges with applying a discounted 2 that that is a valid comparison to make.
3 cash flow, which is why I chose not to apply it, but 3 Q. If I’m buying a house and my budget is £1 million, I’m
4 I do not have any issue with valuing it on that basis 4 unlikely to look at houses that are on the market for
5 per se. 5 half a million pounds; would you accept that?
6 Q. Thank you. Let’s look at your market-based valuation, 6 A. Perhaps. I mean, that’s a matter of personal choice.
7 then. Now, a market-based valuation is defined, or 7 Q. Because they are not really going to be comparable,
8 described, at {E7/25.1/4}. We can see, and this is from 8 that’s my point.
9 the RICS glossary, that a market-based valuation means: 9 A. Okay.
10 «An approach that provides an indication of value by 10 Q. Do you agree with that? A house which is worth half
11 comparing the subject asset with identical or similar 11 a million pounds isn’t, in any real sense, comparable to
12 assets for which price information is available.» 12 a house that’s worth a million?
13 A. Yes. 13 A. I’m not sure I agree with that, and I’ll tell you
14 Q. So clearly for this approach to be reliable or even 14 exactly why, and try and give you a concrete example.
15 available, you need to have assets which are either 15 I have a house, although I live in Russia, I have a
16 identical or similar to the subject assets? 16 house in Claygate. Exactly the same house in Esher,
17 A. Correct. 17 because people like the Esher address, would be
18 Q. Now, with real estate you are unlikely to ever have 18 40 per cent more and everyone knows it would be
19 identical land; do you agree with that? 19 40 per cent more.
20 A. Well, you can by definition not have identical land 20 So if I have a house that sells in Claygate and
21 because location is one of the factors, yes. 21 exactly the same house I would be valuing it in Esher,
22 Q. Yes, so you are looking for assets that are similar. Is 22 then I would take the house in Claygate and add the
23 it right that the more similar the comparable assets 23 premium because I know that the premium between one
24 that you use, the smaller the adjustments that you have 24 location and the other is well established.
25 to make to them to get your market value? That’s 25 It may be that my budget is 2 million, but, you
73 75
1 obvious, isn’t it? 1 know, I actually prefer to buy a cheaper house which is
2 A. That’s correct, yes. 2 exactly the same three miles up the road in Claygate
3 Q. So to take an example, if you are valuing an apartment 3 rather than in Esher and keep half a million in
4 and the two apartments above and below have sold for, 4 the bank. That is a personal preference but it is clear
5 say, £1 million and £950,000, you only need to make 5 that there are links and that are fairly well
6 quite small adjustments to get a likely selling price 6 established between properties of a similar nature but
7 for the one you are valuing? 7 in a different location.
8 A. That’s correct. 8 Q. It is quite crude, isn’t it, to say — because land
9 Q. And is it also right that the smaller the adjustments 9 values in one place are roughly double what they are in
10 you have to make, the more accurate your valuation is 10 another place, that you can use land in one place as
11 likely to be? 11 a comparable for the other. It’s not how you would
12 A. That would be correct. 12 normally choose to value real estate, given the choice?
13 Q. And if you are using comparables that require a very 13 A. It is quite often the way that I would choose to value
14 large adjustment, then that implies two things, doesn’t 14 real estate, yes.
15 it: first, the assets may not be truly comparable at 15 Q. Even if they are, in some sense, comparable, the
16 all, in the sense that they are not part of the same 16 valuation where you have to make a very large adjustment
17 market. 17 is going to be more subjective and less reliable than if
18 A. I’m not sure I would characterise that as being true, 18 you were using more similar comparables?
19 but I can understand why you would think that. 19 A. Yes, in the ideal world you would have a port facility
20 But if you have land which is of a very similar 20 or a block of land next door with access to the sea
21 nature and the only difference is its location or the 21 which is sold, and therefore it would be a more direct
22 fact that it has access to a berth and you have 22 comparable and it would be easier to apply. That is
23 a benchmark for another market which shows what the 23 clearly the case. It doesn’t necessarily invalidate the
24 typical premium is where you have similar land of that 24 approach.
25 type, and for something which is very similar in terms 25 Q. One more question on theory and then we will look at
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1 your valuation.

2 Would you agree that the more comparables you have,

3 the more accurate your valuation is likely to be,

4 assuming that the comparables are valid comparables?

5 A. Yes.

6 Q. And only having one comparable wouldn’t be advisable,

7 would it, if you wanted to ensure an accurate valuation?

8 A. It’s not ideal; I wouldn’t say that it’s not advisable.

9 Q. It’s not good practice generally to have just one

10 comparable, is it?

11 A. It depends on the nature of the comparable and a number

12 of other things. I would not say that it’s not good

13 practice.

14 Q. Now, we agreed earlier that what you have done is to

15 take a notional value for industrial land in

16 St Petersburg. Maybe we didn’t agree on the word

17 «notional»?

18 A. Yes, I was going to pick up on that.

19 Q. You have taken a value for industrial land in

20 St Petersburg, discounted it for negotiations and then

21 added a premium. Now let’s take each of those in

22 stages.

23 Starting with the question of the comparable.

24 A 100 per cent premium is a large premium to apply,

25 a large adjustment to make to a comparable, isn’t it?

1 if you look at the big port of St Petersburg in

2 particular, the number of landowners is fairly

3 restricted, and therefore the number of potential

4 buyers, I would suggest, is probably also quite limited.

5 Q. So he wouldn’t ask himself, the buyer, what premium it

6 was appropriate to pay for access to the sea, because

7 land that didn’t have access to the sea would have no

8 interest to him whatsoever?

9 A. You are asking me to speculate on the specific

10 requirements. I mean, if he wanted the land for direct

11 access to the sea, then clearly that would not be the

12 case, but it would be perfectly reasonable for someone

13 who is operating a port facility to require storage five

14 miles up the road. So, I mean, it depends what his

15 specific purpose would be.

16 Q. But equally, someone who just wants to buy a warehouse,

17 for example, is unlikely to pay a 100 per cent premium

18 for a warehouse in the middle of a major port?

19 A. Correct.

20 Q. So they are, more or less, completely distinct markets,

21 aren’t they, the market for general industrial land and

22 the market for port facilities?

23 A. They are, to a certain extent, a distinct set of buyers.

24 It doesn’t mean that they are distinct markets, per se.

25 Q. So to try to reach conclusions about the value of one

77 79

1 A. It is.

2 Q. Ms Simonova suggested that one wouldn’t normally want to

3 make an adjustment of more than 25 per cent; do you

4 agree with that?

5 A. No.

6 Q. What do you think is the limit of what’s —

7 A. I don’t think there is a limit. If you go through

8 a reasonable process, there is no hard and fast limit

9 that you can or cannot apply.

10 Q. But 100 per cent is at the upper end of what you would

11 be comfortable applying?

12 A. I’m not sure I would say that.

13 Q. And on the basis of your answers earlier, it is unlikely

14 to be very accurate if you have to make such a large

15 adjustment, is it?

16 A. I’m not sure that’s what I said earlier.

17 Q. I think you accepted that the larger the adjustment, the

18 more subjective it was, and therefore the less accurate

19 it was likely to be.

20 A. Yes, I said it would be less accurate. I don’t think

21 I said it would be inaccurate.

22 Q. Now, someone who wants to buy a port facility is

23 unlikely to have any interest in buying assets that are

24 not located next to the sea; would you agree with that?

25 A. Yes, that’s correct. It’s a fairly limited marketplace,

1 based on the value of the other doesn’t make a lot of

2 sense, does it? You are not comparing like with like?

3 A. I hope that I explained that I believe it makes perfect

4 sense.

5 Q. With respect, Mr Millard, it doesn’t, does it, because

6 they are not even apples and oranges. They are not even

7 conceivably in the same market at all?

8 A. Well, they are apples and apples, it is just one apple

9 is next to the port and the one is half a mile up

10 the road.

11 Q. They are not comparable in any true sense, are they,

12 Mr Millard?

13 A. Well, I disagree with that statement.

14 Q. Right.

15 Now, we will come back to how you calculate the

16 premium in a minute, but first of all, a short point

17 about negotiation. 30 per cent is quite a large

18 discount to allow for negotiations, isn’t it?

19 A. It’s perhaps useful to have a little bit — I appreciate

20 that I’m probably going slightly off topic, but a little

21 bit of commentary on the market as at the date of

22 valuation is perhaps worthwhile.

23 The global financial crisis, although it started in

24 2007, hit Russia in September 2008 with the crash of

25 Lehman Brothers. From September 2008 until really

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1 2011/2012, I am not aware of any single sale of land,

2 albeit that we have tried to sell a lot of land over

3 that period. There is a distinct lack of buyers.

4 30 per cent is probably on the generous side. Where we

5 have seen people bidding for land and we have been

6 acting for bidders, they have been typically applying

7 discounts of 60 to 70 per cent which is where there have

8 been very few — I hesitate to say no, because there

9 will have been some transactions, but that is why there

10 have been very few transactions in the market

11 since September 2008.

12 Q. For the land plots that we’ll discuss later, you have

13 allowed 5 per cent for negotiations.

14 A. Yes. Those assets, and I can say this with a high

15 degree of confidence, because we are actually trying to

16 sell a land plot in Sestroretsk at the moment, which is

17 literally half a mile, or a mile up the road from the

18 subject land plot in Sestroretsk, basically would not —

19 it’s impossible to trade them for any monetary value

20 today. The only offers you get are for joint venture

21 agreements. We have concluded one recently on the edge

22 of St Petersburg. It’s — there is very little land

23 market. I could have applied a much bigger discount in

24 the case of that land, but chose not to.

25 Q. If you bought an asset for 30 per cent less than the

1 a few, and I have looked in my supplementary report at

2 the Port of Brisbane, which was discussed last week, but

3 they are more port business. But we do have a specific

4 example where Jones Lang LaSalle was involved with

5 selling a port property in Southampton, and where we

6 have industrial land of a very similar nature which we

7 have also sold close by, and where the physical

8 characteristics of the site are very similar and the

9 only difference is that one has access to a port and one

10 does not, we see that there is a premium that is paid,

11 and the only difference being that there is access to

12 the port, of 100 per cent, and that is why I feel

13 comfortable using that as a benchmark, albeit that they

14 would be a different pool of buyers, but there is

15 a clear link.

16 If I may, it is perhaps also worth touching on,

17 I learnt when I was in court on Friday that the property

18 was purchased in 2007 for a price that was broadly

19 30 per cent higher than my valuation, a year and a half

20 later, which is more or less exactly the change that we

21 saw in the market, and that gave me also a great degree

22 of comfort that we are in the right ballpark.

23 MR MILNER: Now can we look at how you have calculated your

24 100 per cent premium. Can we go to {E6/23/45}.

25 You have described this process as one which is

81

1 advertised price, you would feel quite pleased with

2 yourself, wouldn’t you?

3 A. Not in Russia, no.

4 Q. It would suggest that the asset was overpriced from the

5 beginning?

6 A. It is common in Russia that landowners ask for at least

7 double what they believe the land to be worth.

8 MR JUSTICE HILDYARD: Can you really extrapolate that to

9 this? I mean, I’m sorry to interrupt, but the notion

10 that because there have been financial difficulties in

11 Russia, as elsewhere, has had an effect on the price

12 ultimately paid and the discount attributable,

13 accordingly, to some negotiation, I can quite

14 understand, but I can’t for the life of me see what real

15 relevance it has to a particular asset in a particular

16 area with an already very particular market. You will

17 have to help me as to why you can extrapolate one from

18 the other.

19 A. Well, the report looks at the process because it is

20 a very specific asset, and actually would have, as

21 counsel has pointed out, a very specific and limited

22 pool of buyers, and actually, probably quite a degree of

23 bargaining power.

24 Because these assets are very little traded you have

25 to look at where there are other examples. There are

83

1 based on international benchmarks, and the benchmarks

2 that you have referred to are those set out in

3 the table. Now, am I right that entry number 1 in

4 the table is the wharf itself, because you haven’t

5 calculated a premium for that, so that is the price for

6 which the wharf itself sold. Below that there are four

7 pieces of land which you say are comparable, but for the

8 fact that they don’t have access to the wharf. Three in

9 Portsmouth, or perhaps really two, as two of them have

10 the same address, and one in Chandler’s Ford which is

11 just outside Southampton, yes?

12 A. Which two have the same address?

13 Q. There are two at Voyager Park.

14 A. There is one in South Voyager Park and one in North

15 Voyager Park. It is not quite the same address.

16 Q. Now, on the basis of those comparisons, you conclude

17 that:

18 «Land with access to berths in general commands

19 a premium of around 100 per cent over ordinary

20 industrial land.»

21 A. Yes.

22 Q. Now, I think you agreed a moment ago that a valuation

23 which is based on only one comparable is not ideal?

24 A. Yes.

25 Q. So if you set out to avoid doing that in general, then

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1 you have broken that rule here, haven’t you, because you

2 have used only one other piece of berth land for the

3 purpose of calculating the supposed premium?

4 A. Yes, it’s not a rule; it is not ideal, I accept that.

5 Q. Yes. So even if this approach is a valid one in

6 principle, that’s to say calculating a premium for berth

7 land over industrial land and applying it to

8 Western Terminal, that immediately makes it somewhat

9 unreliable, doesn’t it?

10 A. Well, as I said, it’s not ideal. I would not say it’s

11 unreliable, and as I’ve just pointed out, the valuation,

12 as I found out last week, is very much in line with what

13 the property was traded for in 2007, which gives me

14 a high degree of comfort that actually the result we’ve

15 obtained is very reliable.

16 Q. Now, if the premium in Southampton is 100 per cent, and

17 it might not be because none of the comparables is

18 actually in Southampton, but let’s leave that to one

19 side.

20 If the premium in Southampton is 100 per cent, it

21 doesn’t from that, does it, that the premium in Hamburg

22 or Dubai or, indeed, St Petersburg, is also going to be

23 100 per cent?

24 A. No.

25 Q. And, in fact, the difference in value between a piece of

1 an economic crisis.

2 Q. The point I am making, Mr Millard, and I will come back

3 to those comments on Western Terminal, it very much

4 depends on the specific circumstances of the port.

5 A. Yes, there could be some variables and you could see,

6 perhaps, that it may be possible that the adjustment

7 would range from, say, 70 to 125, perhaps 60 to

8 140 per cent, in which case the valuation would vary

9 from sort of 11 million, down to 6 to 14 million. Under

10 no circumstances would it vary up to anywhere in excess

11 of 100 million.

12 Q. Those are numbers that you have just taken out of thin

13 air, aren’t they? There is no analysis to support them?

14 Those are just hypothetical numbers?

15 A. Sorry, my valuation is there. I believe we established

16 that I valued it at around about $11 million. I was

17 using that as a starting point to say that if you

18 changed the adjustment, the value would change in

19 the range of… I think that’s more or less simple

20 mathematics. You would need an enormous premium, which

21 has not been seen anywhere else in the market, to get

22 any higher than those sort of numbers that I am talking

23 about.

24 Q. You don’t know that, do you, Mr Millard, because you

25 haven’t compared it to the market, insofar as there even

85 87
1 land which has access to a berth and a piece of land in 1 is a market. You are guessing, essentially. The only
2 the same city which doesn’t have access to a berth is 2 market you have studied is Southampton.
3 not going to be a constant relationship around the 3 A. I’m not guessing. I was saying that the premium over
4 world, is it? It’s going to depend on the 4 industrial land in St Petersburg, if industrial land has
5 characteristics both of the berth and the port, and of 5 a value anywhere, it’s because it has a value for
6 the land that you are comparing it to; isn’t that right? 6 production that’s based on the local economy. It’s in
7 A. That’s potentially true, yes. 7 a similar location, it’s based on the same transport
8 Q. So if we take the berth, for example, the potential 8 links, it has the same type of nature, the only
9 premium that one might pay would depend on things like 9 difference here is the berth land. I have established
10 the size of the berth? 10 what I believe is a reasonable premium. I said that
11 A. Yes. 11 it’s not ideal, I said that there could be some
12 Q. Is that right? The types of ships that it can 12 variations from that. The variations would be fairly
13 accommodate. 13 minor. I do not see, and I do not think there are any
14 A. Yes. 14 examples in the world where a port would be trading at
15 Q. The quality of the transport links at the port? 15 a premium of thousands of per cent or hundreds of per
16 A. Yes. 16 cent above what industrial land in the same location
17 Q. The size of the local market that the port serves, and 17 would be trading at.
18 the amount of competition from other nearby ports. 18 Q. Just as the relationship depends on the characteristics
19 A. Correct. 19 of the port, it also depends on the nature of the market
20 Q. Those things could make a substantial difference to 20 for industrial land, doesn’t it? So, for example, in
21 the value of a port terminal, couldn’t they? 21 a place with low availability of industrial land and
22 A. Correct, and in the case of Western Terminal, we have 22 high land prices generally, like southern England, for
23 one dilapidated berth, another one which is difficult to 23 example, then industrial land prices are relatively
24 use, a high level of competition, fairly poor transport 24 high. Whereas in a country which is vast, like Russia,
25 links, and a market which is in the middle of 25 they might be less high.
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1 A. Yes, the value of industrial land could change, but 1 Q. It serves a huge area, doesn’t it? Goods that are
2 that’s also a function of the marketplace. I’m not sure 2 imported into St Petersburg are then transported across
3 that it necessarily breaks the link between the premium 3 large swathes of Russia and, indeed, beyond Russia?
4 for berth land. 4 A. A lot of trade comes in through St Petersburg, both
5 Q. Well, there’s no correlation, is there, between the 5 through the port and by road and rail as well.
6 supply of industrial land generally and the supply of 6 Q. Whereas there is a lot of generic industrial land in
7 port facilities? 7 Russia; is that true?
8 A. No. 8 A. It depends what you call generic. I wouldn’t say
9 Q. So there is a more fundamental problem with your 9 there’s a lot.
10 analysis, isn’t there: Apart from the fact that you 10 Q. Well, it’s a huge country, isn’t it?
11 have only used one comparable, the premium for berth 11 A. Yes, but — it is a huge country. It’s broadly a third
12 land in Southampton, if this concept of a premium is 12 of the world’s land mass, so it’s very much a huge
13 a valid one at all, tells one nothing about what the 13 country. A lot of that is characterised, actually,
14 premium might be in St Petersburg, does it? 14 specified for agricultural use. It is extraordinarily
15 A. Well, I submit that there is a reasonable causal link. 15 difficult to change the use when it is classified as
16 Jones Lang LaSalle actually has a business line which 16 agricultural use to anything else, and the nature of
17 specialises in ports and marinas, I discussed the case 17 the system is that you have permits and land
18 with them without going into specifics. When we arrived 18 classification which makes it quite difficult to use
19 at this, we did ask whether that was a reasonable level 19 land for anything other than what it is classified for.
20 of premium to apply, to which the answer was: yes, and 20 That does create a limit on the amount of industrial
21 again, I go back to the fact that the result is very 21 land, which is perhaps not as much as you might believe.
22 much in line with what the actual property traded at, 22 Q. But if anything, your approach of applying a premium
23 which is the best comparable you can have, which 23 to — if your approach of applying a premium to
24 therefore is highly suggestive that the level of value 24 industrial land values to get the value of a port is
25 is at about the right level. 25 legitimate, you would expect the premium to be greater
89 91

1 Q. And, in fact, the very idea of applying a premium to

2 industrial land to value a port terminal is totally

3 flawed, isn’t it?

4 A. Well, I believe I have answered that.

5 Q. There is no reason for there to be any correlation

6 between the value of industrial land and the value of

7 a port at all?

8 A. That’s not the case.

9 Q. And even if there were any correlation, it wouldn’t be

10 something that you could just apply mechanically to

11 value ports all over the world, would it?

12 A. Well, I disagree. I’m not sure there was a question

13 there.

14 Q. Now, to come back to your comments on St Petersburg as

15 a port, it’s correct, isn’t it, that St Petersburg is

16 the only port in north west Russia which is open all

17 year round?

18 A. I believe that Ust, which is just up the coast, is also

19 open all year round. It is the new terminal which is

20 providing significant competition to the big port of

21 St Petersburg, and it is taking away quite a lot of

22 the trade because it is easy to access from the sea.

23 Q. I am sure we can check on that.

24 A. I believe it is in Ms Simonova’s report, you can check

25 on that.

1 in St Petersburg than in Southampton, wouldn’t you?

2 A. Not necessarily.

3 Q. So probably even on your own approach, if you take into

4 account the features of Western Terminal, the nature of

5 the industrial land market in Russia, as compared with

6 Southampton and southern England, you have probably

7 materially underestimated the value, haven’t you?

8 A. I suspect it is the other way around. I suspect that

9 I have been a little bit generous, and the reason for

10 that is, as I pointed out, the ownership of most of the

11 port of St Petersburg is fairly concentrated in

12 the hands of two or three people who have significant

13 bargaining power. I would think that it is certainly

14 the case that in order to be able to operate in the port

15 you need to have administrative connections and make

16 payments to administrative people in order to be able to

17 have that access. I would imagine that that access is

18 concentrated in a fairly limited number of hands and

19 therefore I think you will be dealing with purchasers

20 who have quite a high degree of bargaining power and

21 therefore probably would not want to pay much more.

22 I actually think it would be — if anything I’ve

23 probably been on the generous side.

24 Q. Well, we don’t accept that, of course, Mr Millard, but

25 I have your answer.

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1 A. Well, again, I go back to the actual transaction, which

2 is at a similar level to where I am, which is highly

3 suggestive, as the best comparable evidence there is,

4 that we are at the right level.

5 Q. Now, you haven’t done an income-based valuation for

6 Western Terminal, have you?

7 A. I have not carried out a discounted cash flow. To

8 an extent when you are doing a comparable, as I pointed

9 out at the start, all comparables are basically being

10 sold on the basis of their income-producing ability, so

11 the income-producing ability of the land is implicit.

12 Q. Yes, but you have not done —

13 A. I’ve not done a discounted cash flow, no.

14 Q. — a discounted cash flow evaluation. But you have

15 provided two examples of other transactions or other

16 entities, which you say can be used as a sort of sense

17 check on the values Ms Simonova has come up with. One

18 is Global Ports and the other is the port of Brisbane.

19 Now, for Global Ports you don’t have any transaction

20 data as such, do you? This is based on the EBITDA

21 figure for Global Ports, which is —

22 A. Well, transactional evidence in as fact as it is

23 a publicly traded company and the share price is based

24 on what people are buying and selling shares at gives

25 the entity value of the company, so it is very much

1 are almost exactly the same in terms of what they are

2 looking at. There’s not necessarily a difference,

3 because you should make the step about making

4 apportionment between the land and the business, but

5 ordinarily yes, you would expect that there would be

6 a difference between a business valuation and an asset

7 valuation.

8 Q. Can we look at {E7/24/88}. Do you recognise this

9 document? This is the guidance note relating to

10 valuation of trade related properties from 2007?

11 A. Yes.

12 Q. And in paragraph 5.6, explains that:

13 «Although the concepts and techniques are similar to

14 those often used in the valuation of a large-scale

15 business, to the extent that the valuation of a TRP does

16 not usually consider tax, depreciation, borrowing costs

17 and capital invested in the business, the valuation is

18 based on different inputs from those of a valuation of

19 a sizeable business.»

20 An investor would understand that, wouldn’t they?

21 A. That is one way of doing a business valuation. If you

22 look at Mr Steadman’s report, for instance, he has done

23 it off the EBITDA, which is exactly the same measure

24 that Ms Simonova has used in her valuation.

25 Q. Now, what you have done in your approach to Global Ports

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1 based on transactional evidence.

2 Q. Yes, when I say transactions, I mean asset sales as

3 opposed to share sales?

4 A. No, what it is is saying all things being equal, if

5 an investor had the choice to buy Western Terminal,

6 which has one, be generous, one and a half berths, or

7 you could buy a company which has a number of operating

8 berths and you could get an existing yield on current

9 income without investing anything else, obviously that

10 is an opportunity cost, it’s another investment decision

11 someone could make, and if the berth that you could buy

12 is significantly, or multiples more expensive of buying

13 into an existing company, a rational investor is not

14 going to do it, so it is a very reasonable sense check

15 to make.

16 Q. There is a difference, isn’t there, between an asset

17 valuation and a business valuation?

18 A. Yes.

19 Q. A business valuation takes into account many more

20 factors which are particular to the company than

21 an asset valuation?

22 A. Obviously it depends how you look at it. If we go

23 back — I don’t have it in front of me, but if you

24 compare, for instance, Mr Steadman’s business valuation

25 and Ms Simonova’s asset valuation you will see that they

1 is take its EBITDA figure and scale it down to reflect

2 the smaller size of Western Terminal; is that a fair

3 summary? You have put that figure into Ms Simonova’s

4 model to calculate a revised terminal value; is that

5 right? Do you want to see it? It’s at {E7/25/14}. If

6 we can have the next page as well, {E7/25/15}. You have

7 taken the EBITDA for Global Ports of 860 million, then

8 scaled it down by 8.5 to come up with a figure of

9 100 million.

10 A. Mm hmm.

11 Q. And if you then discount that by the discount rate, you

12 get 40 million.

13 Now, again, I suggest to you this is not

14 a legitimate exercise in principle because it’s

15 comparing a company valuation to an asset valuation,

16 which is a fundamentally different exercise.

17 A. Any investor who is looking at a range of investments is

18 going to compare what is out there. The EBITDA, which

19 is the earnings before interest, tax, depreciation and

20 amortisation, it takes those things out, which you

21 notice in the business valuation. So the entity value

22 of Global Ports compared with its EBITDA gives you

23 a reasonable measure, and I say again, I’m only using it

24 as a sense check, and I have not changed anything else

25 in Ms Simonova’s model, for instance, I could easily

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1 take issue with the EBITDA being $44 million for

2 Western Terminal, I have not done that, all I have said

3 is if you look at just making one adjustment to one

4 input, because I believe the terminal value is

5 unreasonable, you already reduce the value to

6 $40 million. It just demonstrates how sensitive

7 a discounted cash flow is because making one small

8 change to one assumption makes a change of more than

9 $100 million to the value, and that’s without changing

10 anything else. If you start looking at all the other

11 assumptions you can end up with a range of values which

12 is enormous.

13 Q. Well, it’s certainly true that if you change the inputs

14 you get different numbers, but it could work the other

15 way, couldn’t it? The inputs could be higher and then

16 the ultimate value would be even higher. So when you

17 talk about sensitivity analysis, which is the point you

18 are making, I think, what you do is you get a broader

19 range of possible values, but it doesn’t really affect

20 the ultimate conclusion which is what is your best

21 estimate of the market value?

22 A. Yes, the best estimate means that everything has to be

23 reasonable, and you know, therefore the capital costs

24 ought to be in line with what other experts are telling

25 you, so that you can reach the capacity that you are

1 A. Yes.

2 Q. — and 10 terminals in Estonia?

3 A. Yes.

4 Q. So given the number and the diversity of the assets

5 owned by Global Ports, you cannot safely make any

6 assumptions, can you, about the likely profitability of

7 Western Terminal, a single, smallish terminal in

8 St Petersburg, as compared with the whole of

9 Global Ports? You are not comparing like with like

10 again, are you?

11 A. Again, I’m using it as a sense check to understand when

12 I’m looking at something, because if you run through any

13 sort of valuation, you ought to understand: okay, that’s

14 the result that I’m getting from my model, my analysis,

15 or whatever else it is. You then need to go to the next

16 step: Who would buy it for that? You need to have

17 an understanding of the market, who is operating, and if

18 someone had the opportunity to buy into Global Ports a

19 liquid publicly traded company and get a return of

20 a certain amount without having to go through the very

21 difficult process of trying to redevelop the port by

22 building either one or two new berths and adapting it

23 for container use, someone is going to want a much

24 higher level of return from that development project

25 other than buying into a company which is already

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1 stating. The discount rate ought to be in line with

2 what’s available in the market. You would not pay

3 a discount rate which is below, for instance, what you

4 could get from a Russian bond, because the level of risk

5 is completely different, and you need to plug all of

6 these things to understand. And if you plug into your

7 model and you understand, a model is an exercise, you

8 understand that the range can be between zero and 200,

9 it ought to give you pause for thought that finding

10 a reasonable answer is quite difficult, because DCFs

11 are, by their nature, extraordinarily sensitive, and

12 they are usually sensitive to one or two inputs.

13 I think it is beholden on us as valuers to understand

14 what that sensitivity is.

15 Q. Even if we take what you have done at face value, which,

16 as I say, I don’t accept is legitimate, but let’s pursue

17 your reasoning here, Global Ports is a large company,

18 isn’t it?

19 A. It is.

20 Q. The document that you have exhibited about Global Ports

21 at {E7/25.1/10} says that they are the number one

22 terminal operator in Russia —

23 A. Yes.

24 Q. — with seven container terminals in Russia and

25 Finland —

1 earning a profit.

2 Therefore, as a sense check, which is what I’m

3 doing — all I’m saying there is this is something you

4 should do to check that the results are broadly

5 correct — I don’t think that, you know, that’s

6 necessarily an issue.

7 The document also says, and I can probably find it,

8 if we go to {E7/25.1/13} of the same document, it’s

9 quite interesting, also, if you look at First Container

10 Terminal, which is adjacent to Western Terminal,

11 I believe it has about 10 or 15 operating berths,

12 I would need to check — has a capacity of 1.25 million

13 TEU per year, whereas Ms Simonova and Mr Steadman are

14 expecting to reach 500,000 TEU from a property which is

15 about 5 per cent of the size of First Container

16 Terminal.

17 There are certain things in these documents that you

18 can go through to get a sense check to understand

19 whether the assumptions you are using are realistic.

20 Q. Yes, but my point was that you can’t make any

21 assumptions as to the likely profitability of one

22 terminal based on the figures for a large and diverse

23 business that operates in multiple countries?

24 A. I’m not using it as a basis for valuation, I’m using it

25 as a sense check, and if you look at the world of

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1 investments which are in the same sphere, they are both

2 in operation of ports, it’s a reasonable question to

3 ask: would a rational investor be willing to invest into

4 a small port business which gives him a much, much lower

5 level of return against purchasing shares in a liquid,

6 publicly traded company?

7 My view is that the investor in Western Terminal

8 would require a much greater level of return; however,

9 even if you accept that he would take the same level of

10 return as he could get from Global Ports, the terminal

11 value would still be considerable less than has been

12 calculated in Ms Simonova’s report.

13 If you go through those two or three processes, it

14 certainly must raise questions about who potentially

15 would invest into this property for the level of returns

16 that are being talked about.

17 The next logical step is, if it is such a wonderful

18 investment opportunity, why has nobody done it?

19 Q. Now, in relation to Brisbane, you refer to a transaction

20 in 2010 where the whole port, which includes 29 berths,

21 was sold for $1.9 billion?

22 A. 29 operating berths, yes.

23 Q. Yes, which equates to US $65 million per berth?

24 A. Yes.

25 Q. And you say if you apply that rate of $65 million per

1 market, and you see that Chinese investors are buying

2 into American ports and all over the place. I think

3 actually it is perhaps one of the most globalised

4 markets that there is.

5 Q. Well, there is no reason, is there, why a berth in

6 Brisbane should cost the same, or anything like the

7 same, as a berth in St Petersburg. Again, it depends on

8 all the features of the berth, the supply of berths, the

9 size of the berth and so on.

10 A. I agree, I would expect it to be more, but I would

11 certainly expect, bearing in mind the relative size of

12 the economy, that there should be some broad

13 correlation, again, it is there as a sense check,

14 because the divergence between the Western Terminal

15 numbers and what an investor could get that number of

16 operating berths for in Brisbane, for instance, would be

17 highly suggestive that it would be difficult to find

18 an investor.

19 Q. What is the implication of your sense check? You say

20 that 130 million looks like a sensible amount to pay for

21 two berths, whereas Ms Simonova’s terminal value of

22 159 million is outrageously high. That doesn’t follow,

23 does it?

24 A. No, I think —

25 Q. I am sorry, let me just finish my question.

101 103
1 berth to Western Terminal obviously you would get 1 Ms Simonova’s valuation actually looks quite realistic
2 a terminal value of 130 million. 2 on that basis, doesn’t it?
3 A. Yes. 3 A. The current valuation, if I’m correct, is round about
4 Q. Now, that proposition assumes, doesn’t it, that there is 4 140 million, in addition to which there is a capital
5 some sort of worldwide market for berths, so that one 5 expenditure required of around about 105 million. In
6 can sensibly talk about the price of a berth, regardless 6 Ms Simonova’s report —
7 of whether it is on one side of the world or the other? 7 Q. Let me just stop you there, because the Brisbane
8 A. I agree, and it’s a benchmark. Clearly Brisbane is 8 transaction also required a lot of capital investment?
9 a much bigger port that is almost certainly operating 9 A. The purchase price paid actually wasn’t the total cash
10 more profitably in a bigger market where you see there 10 paid, it was the total consideration, including money
11 is a huge amount of trade between Australia and China, 11 that they were going to invest in operating — in new
12 and all of it is conducted by sea. I am not suggesting 12 berths above and beyond the ones that were already
13 that they should be at the same level. 13 operating, so it included that level of investment, so
14 What I am suggesting is, you know, in the world of 14 it is the total price including investment, so it is
15 investors in sea ports, which is a fairly small world, 15 quite a good benchmark.
16 if you can go and buy that number of operating terminals 16 So if I may continue, if you look at the purchase
17 in Brisbane at $65 million per berth, why would you pay 17 price and then add on the capital cost that is
18 today $70 million per berth in Western Terminal when you 18 100/105 million in Ms Simonova’s report, 210 million in
19 have to spend another $100 million on top of that? 19 Mr Steadman’s report, then you are getting a value total
20 Q. Again, that assumes that there is a worldwide market for 20 which is around about 250 million. Ms Simonova is
21 berths, which is quite a large assumption, isn’t it? 21 stating that you can operate from two berths, so if it’s
22 A. I think if you look at the people who are investing in 22 two berths, then it’s $120 million/$130 million per
23 it they are all international investors who are 23 berth in a fairly small site. It just doesn’t quite add
24 operating in different markets, so I think it is 24 up to me.
25 reasonable to assume that actually there is a worldwide 25 Q. If you look at the two figures that you have put forward
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1 by way of a sense check, one of 40 million, one of

2 130 million, they are a long way apart, aren’t they?

3 A. Yes, as I say, the discounted cash flow has put forward

4 the figures. I have made a couple of small changes to

5 Ms Simonova’s model, okay. I’m not saying that that’s

6 the valuation or anything, I’m saying if you make those

7 changes, and those changes would be perfectly reasonable

8 to make and any objective investor looking at it would

9 be perfectly within rights to make those adjustments

10 because you could look around and say that’s

11 a reasonable thing to do. If you make those changes and

12 just those changes without looking at anything else,

13 this is the effect on the value, and you can see that

14 the effect is significant.

15 Q. I think you are saying that $40 million is a sensible

16 value, or could at least reasonably be regarded as

17 a sensible value by comparison with an investment in

18 Global Ports, and equally —

19 A. That’s not what I’m saying.

20 Q. — and equally 130 million could be regarded — well, in

21 fact it mathematically is the value of the berths in

22 Brisbane based on the price that was paid for all 29 of

23 them.

24 A. It’s 130 million, which is for completed and operating

25 berths. In order to get there you have to spend 105, so

1 the land being in proximity to the sea, isn’t it?

2 A. Correct.

3 Q. You haven’t added value for the berths, as such, is that

4 right, because of their condition?

5 A. Well, the premium is comparing a land with a berth with

6 standard industrial land, so it does include the berth.

7 Q. Sorry, it does or it doesn’t?

8 A. It does.

9 Q. It does include the berth?

10 A. It does.

11 Q. So what is the effect on your valuation of the fact that

12 the berths, as you say, were in too poor condition to

13 have any intrinsic value?

14 A. Well, I said that one berth was in too poor condition,

15 but there is one berth that is operational. The

16 property that I used as a benchmark also had one

17 operating berth. I don’t think there’s any further

18 effect.

19 Q. So if both berths were in good condition and usable,

20 would that have any impact on your valuation?

21 A. Yes, I think if the second berth was in reasonable

22 condition, had been dredged out with piled walls and —

23 it’s a fairly short berth at the moment, but had been

24 extended so you could get reasonable sized ships in,

25 then there would be a positive effect on value, but that

105 107

1 if you do it simply, 130 less 105, you get 25. Discount

2 it a bit, so let’s say 30, either way you are at 40 or

3 30, but I am not saying, and I am clearly not saying,

4 because I make it quite obvious that I am not accepting

5 any of the other inputs to the model, what I am saying

6 is if you make this one change, you can make the value

7 reduce by 100 or 110 million by several multiples.

8 That’s without looking at any of the other inputs, and

9 I believe, you know, that some of the other experts, for

10 instance, have taken issue with the ability to earn

11 a $44 million EBITDA because the container throughput

12 that is being envisaged would not be possible without

13 reclaiming the extra 3 hectares of land and doing the

14 extra berth.

15 I’m not saying that’s reasonable. What I’m saying

16 is if you change one thing, and that would be

17 a reasonable thing to do, an investor would be in his

18 rights to do that, looking at the other benchmarks in

19 the market, you have an enormous effect on the output

20 from the model.

21 MR JUSTICE HILDYARD: Would you mind speaking a little

22 closer into the microphone?

23 A. Sorry, I thought I was quite close. I do apologise.

24 MR MILNER: Now, when you have added your 100 per cent

25 premium, that is intended to reflect the value of

1 would require quite a lot of investment, as

2 I understand.

3 Q. Are you able to estimate what effect it would have on

4 the value?

5 A. No, because you would probably say that I am guessing.

6 I would say that it could easily have an uplift of 30 or

7 40 per cent, but that is a rule of thumb and you would

8 be within your rights to say I am guessing in this case.

9 Q. I am inviting you to guess on that occasion, so that’s

10 quite acceptable.

11 Could we look at {E8/27/11}. This is a picture of

12 the terminal.

13 A. Yes.

14 Q. And it appears to show boats lined up at both berths,

15 doesn’t it?

16 A. It does.

17 Q. So that suggests that the berths, at the time the

18 picture were taken, were, at least, usable?

19 A. No, and my apologies for this. I appreciate that I have

20 had the benefit of an inspection, which Ms Simonova has

21 not, and we were taken around by the manager of

22 the facility at the time. The boats at berth 16 are

23 merely moored there waiting to go, or waiting to leave

24 for loading or unloading from berth 15. Berth 16 itself

25 is not operational. You can see — right in the corner,

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1 where the angle is, where there’s a little blip and a

2 red line, there is a very short little bit, that is the

3 length of the berth, it is about five metres. The berth

4 is not in any sensible form usable. Those boats are

5 merely waiting to come into the other berth for loading

6 or unloading.

7 Q. Can we look at {E8/27.3/31.1}. This is an order from

8 the harbour master of the port, and tell me, I don’t

9 know if you are familiar with this document or similar

10 documents, but what it appears to do is authorise the

11 use of the berths for certain types of vessels. You can

12 see that berth SV-16M is included in the list, and then

13 there is a list of uses at 2.21, and I don’t know if we

14 can see the next page {E8/27.3/31.2}, yes, SV-16M there

15 is a list of permitted uses of different types of boat,

16 so it was usable for some purposes as at 2010, wasn’t

17 it?

18 A. Yes, I mean, if we go back a page {E8/27.3/31.1}, yes,

19 the mooring zone at berth 16 and it does say that:

20 «Mooring operations for other vessels at SV-16M …

21 should be performed during… any mooring during night

22 time can only be performed…»

23 It only refers to mooring. As I pointed out, there

24 are three boats moored at SV-16. Clearly they were

25 being used for mooring purposes. I do not believe that

1 been having breaks at somewhat erratic times of the day,

2 but I’m moving onto a new topic now and since we started

3 very early, I don’t know if this would be a convenient

4 moment. I can go on until 1.00.

5 MR JUSTICE HILDYARD: Would it assist you?

6 MR MILNER: I’m content to carry on.

7 MR JUSTICE HILDYARD: Whichever. You are right, we have

8 made our own rules as to when we sit, and they are

9 largely to assist, in particular, Mr Stroilov. I am

10 perfectly happy to rise now or rise later, whenever

11 suits you best?

12 MR MILNER: I’m content to continue in that case, so we will

13 do it in the conventional way.

14 MR JUSTICE HILDYARD: Shall we go on until roughly 1.00 and

15 then see how we go?

16 MR MILNER: Very well.

17 I’m moving onto Onega Terminal now.

18 A. Yes.

19 Q. Now, the assets at Onega consist of four buildings and

20 an outdoor storage yard; is that right?

21 A. Let me go back. I think there are two buildings in my

22 report.

23 Q. That’s correct.

24 A. I think on the actual property which is part of

25 the charge, there’s only two buildings. I think if you

109 111
1 it was being used for loading or unloading purposes, 1 take the broader area, part of which is different
2 which is what you would ordinarily expect a berth to be 2 ownerships, or not charged to — or part of this, there
3 used for. 3 was an extra two buildings, but I think there were only
4 Q. I think you are familiar with the valuation that 4 two buildings that were subject to valuation.
5 GVA Sawyer carried out? 5 Q. Well, there were two buildings which you considered in
6 A. Yes, they did two, I think. 6 your first report?
7 Q. Yes, indeed. Can we go to {E8/27/14}. This is actually 7 A. Yes.
8 from Ms Simonova’s report, but I don’t have the 8 Q. Ms Simonova then considered all the buildings in her
9 reference to the document itself. 9 report and you then responded to that and produced
10 A. Yes, it’s quite useful, the purpose for SV-16 is 10 valuations of the other —
11 berthing, which is mooring, which is what we have seen, 11 A. Yes, the what if, I think so, yes.
12 whereas SV-15 is berthing and loading and unloading, 12 Q. Now, together, these buildings and the storage yard
13 which is in line from Ms Simonova’s report, which is 13 comprise an integrated facility which is designed for
14 what we have just seen. 14 the transshipment and storage of cars; that’s right,
15 Q. But even the fact that you can use a berth for mooring 15 isn’t it?
16 ships is of some use, isn’t it? 16 A. Yes.
17 A. I imagine so. I’m not sure how much I imagine that you 17 Q. Yes. And the land is, in some ways, adapted for that
18 could moor alongside SV-16. Reading that one it 18 purpose, isn’t it? It has things like special high
19 suggests that the boats should be 10 metres apart, which 19 quality paving to protect the cars from the elements?
20 it didn’t look like they were in the photograph, but 20 A. I couldn’t say with any degree of certainty. That could
21 yes, there may be some limited logistical value in 21 be the case. I haven’t had an inspection. I haven’t
22 having the extra berthing space. 22 had any details to say that that is the case, so I can’t
23 Q. Right. I’m going to move on from Western Terminal. 23 say with any degree of certainty.
24 My Lord, this is obviously my first involvement in 24 Q. Well, Ms Simonova says that and you don’t dispute it, do
25 this case, so I don’t know — I am aware that you have 25 you?
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1 A. I can’t say one way or another.

2 Q. And there is every reason to think that if the terminal

3 was sold, it would be sold as a going concern, wouldn’t

4 it?

5 A. Yes, there is a slightly more case for Onega Terminal to

6 say that it would be sold as a going concern and,

7 therefore, could be a TRP. I think there are two things

8 that mitigate against that: firstly, we’ve obviously

9 got, the land is in different ownership, so if you look

10 at, actually, the land that I was originally instructed

11 to value, that probably could not be a going concern in

12 its own right, firstly; secondly, in the case of

13 Onega Terminal we don’t obviously have any direct access

14 to the sea: it is beholden on a third party to provide

15 that, so without the benefit of that agreement, which

16 I understand is only an 11-month service agreement, it

17 probably would also be quite difficult.

18 Q. I will deal with both of those points, but I think you

19 accept that — well, you said there was a stronger case

20 for treating it as a TRP than Western Terminal. It is,

21 actually, a compelling case, isn’t it, for treating

22 Onega Terminal as a TRP?

23 A. I don’t believe it is compelling for the reasons I have

24 just outlined.

25 Q. Right. So subject to those, you would agree that the

1 A. Yes, I have, I have been quite generous on that count,

2 yes.

3 Q. Whether you have been generous or not, you have accepted

4 that it does, for practical purposes, have access to

5 the sea, haven’t you?

6 A. No, I mean — probably if I were to correct anything,

7 I would probably correct that point: I have not

8 accepted — that approach may have — I probably should

9 not have applied that premium, actually, but there

10 should be a premium for it being close to the sea.

11 Whether it should be 100 per cent, I don’t think so,

12 because there is no direct access.

13 Q. Well, you made your report on this two years ago.

14 A. Yes.

15 Q. And you have presumably re-read it recently, and you

16 have confirmed today that it did represent your true

17 opinion.

18 A. Yes.

19 Q. So you have had plenty of opportunity to correct it, if

20 you were persuaded it was wrong?

21 A. I am content to let it stand. I think that the access

22 to the sea is probably a matter of fact rather than

23 a matter of —

24 Q. It certainly is a matter of fact, but it is also

25 a matter of judgment, isn’t it, in terms of what premium

113 115

1 fact that it is designed for a specific purpose, or

2 adapted for a specific purpose, does make it appropriate

3 to value it as a TRP, but for those two reservations?

4 A. Except, I mean, the test goes a little bit further,

5 which is that it would be difficult to use it for any

6 other purpose. I think, actually, you could use this

7 for almost any purpose, so it would potentially fall

8 down on that as well.

9 But I can understand why a TRP could be applied in

10 this case. I don’t think that it quite meets the

11 standards, but, again, I’m not sure it is necessarily

12 relevant from a valuation standpoint.

13 Q. Let’s deal with the question of this split ownership.

14 The owners of the land were ultimately — assume that

15 they are ultimately controlled by the same person. In

16 that situation, the issue of split ownership is a red

17 herring, really, isn’t it, because ultimately there’s

18 not going to be any obstacle to buying the whole piece

19 of land?

20 A. Under that hypothetical, yes.

21 Q. And in relation to the lack of direct access to the sea,

22 I think in your valuation you have adopted the same

23 approach as you did for Western Terminal, and apply

24 a premium, based on the fact that it is close to

25 the sea?

1 you apply, and you have applied a 100 per cent premium,

2 which suggests that in practice, it can be treated as

3 having access to the sea? That’s realistic, isn’t it,

4 because we know that it does, in practice, have access

5 to the sea?

6 A. Subject to the agreement with the neighbouring

7 landowner.

8 Q. But they had the agreement, didn’t they, otherwise it

9 couldn’t have operated as a car terminal?

10 A. I believe it is an 11-month service agreement.

11 Q. So —

12 MR JUSTICE HILDYARD: I am sorry, could you say that again?

13 Otherwise it couldn’t have operated as? It’s my fault,

14 I am quite sure, but I am finding sometimes I don’t

15 quite hear you.

16 A. Sorry, that was the question, not my answer.

17 MR MILNER: My question was: otherwise it couldn’t have

18 operated as a car terminal, I think.

19 MR JUSTICE HILDYARD: Right.

20 MR MILNER: I think Mr Millard’s answer was —

21 MR JUSTICE HILDYARD: «I believe it is an 11-month service

22 agreement.»

23 Thank you.

24 MR MILNER: So, if you assume that there was no practical

25 obstacle to gaining access to the sea, as in fact there

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1 wasn’t in the period that we’re concerned with, and if

2 you assume that the land is all controlled by the same

3 person, albeit through more than one company, the

4 objections to valuing it as a TRP fall away, don’t they?

5 A. Well, except that you still haven’t met what I believe

6 is the standard — difficult to use it for another use,

7 which clearly is not the case, but I accept that

8 Onega Terminal, under those various assumptions could be

9 sold as a going concern. I reiterate that in that case

10 you do need to make an apportionment between the value

11 of the business and the value of the land.

12 Q. And to value it in the way that you have done, as

13 individual plots of industrial land with a premium for

14 part of it which has access to the sea, is a highly

15 artificial way to value what is, in reality,

16 an integrated complex of assets that are functioning as

17 a trading business, isn’t it?

18 A. I don’t believe it is artificial because that was the

19 land that I was instructed to value. I do not believe

20 it would have been incorrect for me to make

21 an assumption that other land that I was not aware of

22 could be operated with the property I was instructed to

23 value. That would have been a bit of a leap of faith.

24 Q. Well, by the time of your second report I think you were

25 aware of that, weren’t you?

1 is right, your Lordship, that he should know that in

2 the most recent version of the amended defence and

3 counterclaim, if I have the reference to the appendix,

4 any claim for the real estate has been expressly

5 disavowed. (Pause).

6 It’s in appendix 2 of the most recent version of

7 this document. I have it here, my Lord, hang on just

8 one second. It is {I25/39/92}. This is the one that’s

9 been, I think, verified to be true recently, and it’s

10 important to note under «Real estate», the asterisk at

11 4, and the footnote. I don’t accept that it’s a fair

12 point to put to criticise him for valuing as a land plot

13 the land plot in respect of which the claim is made as

14 he has done.

15 MR MILNER: Well, I don’t agree with that, my Lord, but I

16 think it is a matter for submissions ultimately.

17 MR JUSTICE HILDYARD: Well how does it continue, that star?

18 The value of LPK land at Onega Terminal and the overall

19 value. How does that continue? {I25/39/93}.

20 MR LORD: My Lord, that’s the business, it’s part of

21 the background to the business claim, but in terms of

22 the claim for loss based upon land value, the claim is

23 for the Onega Terminal — sorry, for the

24 Scandinavia Insurance Onega Terminal plots 1 to 5.

25 That’s the land value claims made herein, under the

117 119
1 A. Well, I was asked to consider in the hypothetical what 1 first part of this appendix — sorry, the second part of
2 would that land be worth, I believe. 2 the appendix.
3 Q. It’s rather like, if one wants to use an analogy, it’s 3 MR MILNER: Well, if I need to respond to that now, I would
4 a bit like being asked to value Heathrow Airport and 4 say that is correct: there is no claim for the whole of
5 valuing the hangars as warehouses, the terminal as 5 the land, but that doesn’t mean that the value of
6 commercial property, the runway as industrial land, 6 the part which is claimed for shouldn’t be assessed by
7 perhaps applying a premium for the fact that you can use 7 reference to the fact that it is part of a valuable
8 it to fly to places, but ignoring the fact that together 8 complex of assets, and if the assets are sold as
9 these assets comprise an airport? 9 a complex, then that’s the value that can be attributed
10 A. I don’t believe that to be the case. It is slightly 10 to them.
11 different. 11 Apart from that, this is relevant not only to
12 Q. It is hard to believe, with respect, Mr Millard, that 12 support the damages claim directly, but as evidence of
13 anyone could use your approach to Onega Terminal unless 13 fraud, and if assets have been sold at a gross
14 they were specifically wanting to arrive 14 undervalue, then that may be evidence of fraud, whether
15 at an unrealistically low value; do you accept that? 15 or not there is a claim in damages or not for them. So
16 A. No, clearly not. 16 it is a perfectly legitimate topic of cross-examination,
17 MR LORD: My Lord, I’m sorry — 17 in my submission.
18 A. It’s a slight … 18 MR JUSTICE HILDYARD: Mr Lord, the witness has, I think he
19 MR LORD: It may just be Mr Milner — he may be aware of 19 has emphasised to me, and I take the point, that he did
20 this or he may not, but your Lordship will appreciate 20 say on a hypothetical basis, but he has addressed the
21 that there is no claim in this case in respect of 21 issue which was raised by Ms Simonova. I would have
22 the land value owned by LPK Scan, and so that’s the 22 thought that, he having done so, with the caveat that
23 genesis of all of this. Mr Milner may not be familiar, 23 I should recall, that it is a hypothetical basis,
24 so when he is putting questions to the witness about why 24 I should have thought that we are entitled to
25 he has valued the Scandinavia Insurance plots 1 to 5, it 25 cross-examine on that footing. Your reservation is only
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1 for me to beware, or? 1 Western Terminal. You said — and this is page 106 of
2 MR LORD: I’m not suggesting that he can’t be cross-examined 2 today’s [draft] transcript — that berth 16 was about
3 about his valuation approach, but it is right that the 3 five metres long. In fact, in your first report you say
4 court should be aware and the witness should be aware of 4 that it was 33.5 metres long; do you want to revise what
5 the claim that is being made in respect of land value. 5 you said earlier?
6 MR JUSTICE HILDYARD: Right. Okay. 6 A. Yes, my apologies. I am sure that the report is
7 MR LORD: He is being criticised for valuing — there seems 7 correct.
8 to be a criticism that he has valued five plots, 8 Q. Now, let’s move on to Sestroretsk. Here I think you
9 Onega Terminal plots 1 to 5, and it must be relevant, 9 agree with Ms Simonova that the highest and best use is
10 when that criticism is made, that the relevant claim for 10 for the construction of houses.
11 compensation, as far as a land value is concerned as 11 A. Yes.
12 opposed to a business value, is in respect of plots 1 to 12 Q. Do you agree that the discounted cash flow method is
13 5. 13 a valid approach for the valuation of this property?
14 MR JUSTICE HILDYARD: I didn’t take it — maybe I’m being 14 A. I do.
15 too insensitive, but I didn’t take it as a criticism, 15 Q. You said in your report that the discounted cash flow
16 I took it as querying whether you can really ignore the 16 method was incorrect, but you have changed your view
17 propensity of the whole in valuing the part. That’s all 17 now, have you?
18 I took it to be. 18 A. I’m not sure that’s what I said.
19 MR LORD: Well, my Lord, so be it. 19 Q. It’s {E7/24/7}.
20 MR JUSTICE HILDYARD: That’s why the Heathrow example 20 A. I’ve said I do not believe it’s correct in this case,
21 I thought was given by Mr Milner, you may not own the 21 but there is nothing wrong with using a discounted cash
22 whole of Heathrow, but equally, its propensity for use 22 flow per se. I prefer to use the sales comparison
23 within an airport must be taken into account; is that 23 because I believe that with the amount of evidence
24 not right? 24 that’s available, it is easier to apply and more
25 MR MILNER: Exactly. 25 accurate to apply in this case. But there is nothing
121 123
1 MR LORD: My Lord, could we have [draft] page 115 of 1 wrong as a point of valuation principle in using the
2 the transcript, because I think it was put a little more 2 discounted cash flow.
3 seriously than that. I think it was put, in fact, very 3 Q. You say in the middle of that page:
4 seriously. 4 «As outlined above I believe that the most
5 The question is at lines 21 to 24 on page 115. 5 appropriate valuation methodology is the sales
6 MR JUSTICE HILDYARD: Hold on. Yes. That is part of 6 comparison approach as market evidence is available.
7 the case that’s put, which is put, which is that the 7 I therefore do not think that the DCF approach is
8 valuation which Mr Millard has commended to me is, in 8 correct in this case and disagree with the results.»
9 the view of the defendants, deficient, because it 9 Anyway, now you are saying that it’s a perfectly
10 doesn’t take into account the true features and 10 acceptable method?
11 propensity of the particular land. Isn’t that right? 11 A. I’ve never said otherwise. I said in this case in my
12 That’s, I think, the case being put, and it was put 12 opinion it is preferable to use the sales comparison
13 quite sort of fiercely, I dare say — 13 approach. Correctly applied, there is nothing wrong
14 MR LORD: Very well, my Lord. 14 with using the discounted cash flow methodology: you
15 MR JUSTICE HILDYARD: — but I think Mr Millard is well up 15 should get similar answers. There’s nothing wrong with
16 to it. 16 using that approach as a matter of valuation theory.
17 MR LORD: Thank you, my Lord. 17 Q. Can we go to {E6/23/17}. You have set out here a list
18 MR MILNER: My Lord, that is a convenient moment, if it is 18 of potential comparables for the Sestroretsk land. Is
19 for everybody else. 19 it right that you have only actually used one of them,
20 MR JUSTICE HILDYARD: Yes. 2.00 pm. 20 number 3?
21 (1.02 pm) 21 A. That’s correct, I believed it was the most applicable.
22 (The Luncheon Adjournment) 22 Q. It is not standard practice, is it, to use only one
23 (2.00 pm) 23 comparable?
24 MR MILNER: Mr Millard, can I just go back to your evidence 24 A. It is standard practice, if you have a list of
25 this morning on one small point of detail in relation to 25 comparables, if you believe one is more comparable than
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1 the rest, that you use that as the basis for your

2 comparison.

3 Q. Wouldn’t you still take the others into account to some

4 extent?

5 A. Not necessarily. I mean, the same as if we go back to,

6 you know, the house and the apartments example that we

7 used earlier. If you have one above and one below and

8 a very good comparable, the fact that you have one 10

9 miles up the road is perhaps less relevant and shouldn’t

10 be taken into account. It is a useful gauge of

11 the market, but it’s not necessarily that you should use

12 that evidence.

13 Q. I think in that example you have two comparables rather

14 than one, but anyway, let’s move on.

15 A. Yes, exactly next door, yes.

16 Q. Now, the one comparable you have used, number 3, is it

17 right that it is about 11 kilometres away from

18 Sestroretsk?

19 A. Probably about right.

20 Q. I have calculated that by looking at where it is on the

21 map that you give — it may be on the next page, and

22 putting the — no, it is not — and putting the place

23 names into Google Maps, so it may not be very scientific

24 but would you accept it is about 11 kilometres away?

25 A. I would accept that, yes.

1 between writing your first and second reports?

2 A. I would have to go back to the reference in the report.

3 I suspect that it’s because I was instructed to give

4 a valuation as at a different date.

5 Q. I think that’s right.

6 A. So therefore it is a different set of comparables

7 because I was asked to give a valuation at the same date

8 as Ms Simonova.

9 Q. Yes, which was May 2015. Now, neither of those

10 comparables is in Sestroretsk, is it?

11 A. No.

12 Q. One is in Zelenogorsk, and that’s about 30 kilometres

13 from Sestroretsk, isn’t it?

14 A. Sounds about right.

15 Q. Do you know whether that property is located on the

16 waterfront, like the Sestroretsk land is?

17 A. No, I don’t.

18 Q. You don’t.

19 The other one is about 11 kilometres away, the one

20 in Lisiy Nos; would you accept that?

21 A. Sounds about right.

22 Q. Do I take it you don’t know the specific topography of

23 that site either? What we do know is — excuse me,

24 I will move on.

25 If you are being properly objective, you can’t

125 127

1 Q. Because you don’t give the address, do you, that’s the

2 difficulty. So it is not possible for anyone else to

3 make an exact comparison between that land and the

4 Sestroretsk land, is it?

5 A. I wouldn’t accept that. You have the area, you have the

6 use that it already has consent for and you have the

7 district it is located in. I mean, it’s probably

8 enough. I mean, I accept that probably I should have

9 inserted the address.

10 Q. If you had inserted the address, then Ms Simonova would

11 have been able to go and look at the comparison

12 potentially and provide specific points of similarity

13 and difference, but as it is, we just have the raw data,

14 so to speak, that you have given her.

15 Have you been to the Kurotny site?

16 A. I haven’t.

17 Q. You so don’t even know how it truly compares to

18 the Sestroretsk land, do you?

19 A. No.

20 Q. Now, in your second report you provide some more

21 comparables. That’s at {E7/24/28}. That doesn’t appear

22 to be the right reference, I’m sorry.

23 A. I think we are in Kharkovskaya.

24 Q. Appendix 2. Sorry, {E7/24/51}. Are these additional

25 comparables, the top two entries, which you found

1 seriously place much weight on these as comparables, can

2 you, because we don’t know any details about the land,

3 and also they are not particularly close to the land

4 that you are valuing?

5 A. I think if we’re being properly objective, they are

6 reasonable comparables. They do have a better

7 permitting status than the land in question. I am not

8 sure I take the implication that being on the waterfront

9 is an advantage because of the difficulties of

10 constructing in water protection zones in Russia.

11 Just a bit of general market commentary, Jones Lang

12 LaSalle is currently instructed to sell land in

13 Sestroretsk which has permits for residential

14 development. It has been on the market for about nine

15 months and to date we have not had a single offer,

16 a single cash offer. There have been some joint venture

17 offers but there has been very little — sorry, there

18 have been no land transactions that I am aware of in

19 St Petersburg. You will see from the start that in 2012

20 I worked for a company called Senator. They have

21 a branch called Senator Land which has land plots all

22 over the St Petersburg Oblast, specifically held with

23 permits for purchase and they are offered for sale all

24 the time and between 2009 and today, they have sold

25 exactly none of them because there are no purchasers in

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1 the market.

2 Property being offered for sale where they have

3 permitting of a similar nature and they are in a similar

4 location are a very good guide of what is available in

5 the market and what else you could purchase, and I think

6 it’s a very good starting point for understanding the

7 tenor of the market.

8 Q. In relation to the desirability of a property on the

9 waterfront, you would be able to charge more, wouldn’t

10 you, for properties that were on the waterfront, or

11 close to it?

12 A. Yes, potentially. I mean, you can’t build on the

13 waterfront because you are not allowed to. Something

14 close to the water might command a small premium, yes.

15 Q. Now, Ms Simonova, as you know, has valued the

16 Sestroretsk land using an income approach. Can I ask

17 you about some of your comments on her valuation. First

18 of all, you say that it’s wrong to assume that luxury

19 housing can be built in Sestroretsk. Now, although you

20 make that criticism, you haven’t actually adjusted

21 Ms Simonova’s figures to take account of that, have you?

22 A. No, I mean I’ve — what I have done, once again, is

23 without accepting any of the other inputs as being

24 valid, I have done an analysis to show that if you

25 changed some of the inputs which are perhaps more

1 about the level of pollution in the ditch — channel.

2 Q. That’s the protest which you included a press report

3 about —

4 A. Yes.

5 Q. — it seems to have been about 10 people or so.

6 Now, have you seen Ms Simonova’s photos of

7 Sestroretsk land, including the channel?

8 A. Yes, I have.

9 Q. It doesn’t look particularly unpleasant from those

10 photographs, does it?

11 A. It does not from those photographs, no.

12 Q. Next, and this does make a difference to your valuation,

13 you say that Ms Simonova is wrong to assume 25 houses

14 can be built there and that a more realistic number

15 would be 12. That is mainly because you have allowed

16 a figure of 30 per cent of the land for access roads and

17 infrastructure; is that right?

18 A. Correct. I mean, you will see that there is

19 an indicative drawing that I have done, which includes

20 access roads, which I have tried to minimise as much as

21 possible, but with the minimum width to meet the Russian

22 fire regulations, and there’s the potential for another

23 three, but they are in the water protection zone. So if

24 you just do a fairly straightforward analysis of what

25 could be built, using the same plot size, 12 is the

129 131

1 susceptible to change, what would occur to the result,

2 without accepting the validity of any of the other

3 assumptions.

4 Q. If it doesn’t affect your end figure then I don’t need

5 to ask you any more questions about it. Nevertheless,

6 Ms Simonova’s evidence was that Sestroretsk is a very

7 prestigious area; you wouldn’t deny that, would you?

8 A. I would. I lived in St Petersburg for six months.

9 Sestroretsk is not a very desirable area. It’s

10 a largely industrial town, which is — it would be

11 a stretch to call it desirable.

12 Q. A good number of what might be called the St Petersburg

13 elite have properties there, don’t they?

14 A. Not in Sestroretsk. They do along the coastline further

15 north, yes.

16 Q. And you also say that the property is less attractive

17 because it borders the Vodoslivnoy Channel which is

18 known as the «rusty ditch»?

19 A. Yes.

20 Q. Now I agree that «rusty ditch» is a very unappealing

21 name, but it is actually a very old nickname, isn’t it?

22 A. If you talk to the residents of St Petersburg, the

23 channel — ignore the name, but the channel is notorious

24 for the levels of pollution and was actually the site of

25 a Greenpeace demonstration because they were so upset

1 maximum number that you can achieve.

2 Q. That equates to about 7,500 square metres, doesn’t it?

3 A. Using Ms Simonova’s house size?

4 Q. No, using the total land size.

5 A. Sorry, 7,500 square metres of what?

6 Q. Well, if the total land size is 2.2 hectares or so, if

7 you take 30 per cent of that, is that the calculation

8 you are doing? It’s 30 per cent of the total —

9 A. No, if you look at — sorry — page 9, so it is

10 {E7/24/9}, I have superimposed on the land plot, plots

11 of the size which Ms Simonova has suggested would be

12 correct for the houses that she wants to build. I have

13 included access roads so that you can get to them.

14 Those access roads are the minimum width as required by

15 the Russian fire regulations. There are another

16 potential three plots next to the water, but they are

17 inside the water protection zone, but by doing this

18 fairly simple analysis I have been only able to fit in

19 12 plots of the size as Ms Simonova has suggested being

20 suitable for the site.

21 Q. Just so I can understand the basis for what you have

22 done, is it your view that in general, one has to allow

23 30 per cent for access roads and infrastructure?

24 A. In this case I have done a specific drawing to

25 understand how the site could be developed. Clearly if

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1 you put just properties on all of the site you cannot 1 internally, is going to use about 30 per cent of
2 get into them without the benefit of a parachute or 2 the site.
3 helicopter. 3 MR JUSTICE HILDYARD: So there the Russian requirements are
4 In general — and you will recall that I also run 4 for sort of 23 and 24-foot, in old-style measurement?
5 the development consultancy part of Jones Lang 5 A. Yes, 3.5 metres would be 11 — 12-foot.
6 LaSalle — in general, a reasonable rule of thumb of the 6 MR JUSTICE HILDYARD: Sorry?
7 amount of space that is required for roads and 7 A. 3.5 metres would be 12-foot.
8 supporting infrastructure would be 30 per cent, but it 8 MR JUSTICE HILDYARD: 3.5 would, yes, but the 7 metres would
9 depends entirely on the size and configuration of 9 be about 23/24.
10 the site in question. 10 A. 7 would be about, yes, 23/24 and that is for a main
11 Q. When you say it depends entirely on the size in 11 access road.
12 question, does that mean the bigger the plot, the 12 MR JUSTICE HILDYARD: That’s what’s required, is it?
13 smaller the percentage that you need to allow for 13 A. Yes.
14 infrastructure? 14 MR JUSTICE HILDYARD: Does the availability of water nearby
15 A. No, probably quite the opposite, actually. If you 15 affect them?
16 have a small plot with a long frontage you would only 16 A. No, it does not. They are surprisingly inflexible.
17 just need one road along the front which would be fairly 17 MR MILNER: You also discount the possibility of building
18 small. If you have a large site and you are going to 18 near the channel because of the restrictions in
19 need a large number of internal access roads and also a 19 the water code; is that right?
20 distribution network for the internal utilities as well 20 A. Yes, correct.
21 as supporting the fire standards of Russia, then you’re 21 Q. Can we look at {E7/24/106}. This is an extract from the
22 probably going to have perhaps even a slightly higher 22 water code that you have exhibited, and we can see it
23 loss factor. 23 says that:
24 Q. You are not going to need 7,500 square metres of road 24 «The width of water protection zones for rivers and
25 for a development of this size, are you, even assuming 25 streams is established from their source depending on
133 135

1 25 houses?

2 A. Well, I’ve demonstrated on a map how you can fit the

3 development into the site, so I don’t think there’s any

4 other way of doing it.

5 Q. Well, that is your development, Mr Millard, but you have

6 included 12 houses, which is not how Ms Simonova would

7 configure it.

8 A. I think that’s probably the point that I am making.

9 Those plots are the size that Ms Simonova suggests are

10 correct for the site. Unless you can think of another

11 way of accessing them, which I could not, and I thought

12 long and hard about it, that is the maximum density that

13 I could get from the development using that size plot.

14 MR JUSTICE HILDYARD: The 7,500 square metres of road, that,

15 you say, is a minimum requirement under Russian fire —

16 A. Yes, there’s a minimum width of road depending on what

17 it is classified as, whether it is a main access road or

18 a spine road. It varies between 3.5 and 7.5 metres for

19 the width of the road, there needs to be a verge in

20 addition, but obviously with the access coming in in one

21 corner you need to have a road network to be able to get

22 to the various plots. You can’t just get to the front

23 and then just build on everything, you have to have

24 an access network. Typically that road network plus

25 electricity and gas, which would be in the verges

1 their length.»

2 And you have assumed that it’s the 50-metre

3 restriction that applies.

4 Now, it refers, doesn’t it, to water protection

5 zones for rivers and streams. Now, whether or not the

6 channel is a river or a stream for these purposes is

7 a question of law, which I don’t need to ask you, but if

8 it is not a river or a stream, it follows, doesn’t it,

9 that you are not restricted by the water code from

10 building on this site?

11 A. If you were able to establish that as a matter of law,

12 then you would be able to build another three houses.

13 I have shown them inside the water protection zone as

14 what could be possible if you were able to — if the

15 water protection zone did not apply.

16 Q. The next point that you make is that Ms Simonova hasn’t

17 allowed for permitting and infrastructure costs in her

18 calculation of the construction costs. Now, Ms Simonova

19 has added on 5 per cent for infrastructure costs, and

20 you have added on 30 per cent, or you say that

21 30 per cent would be more realistic; is that right?

22 A. That’s right, yes.

23 Q. Now, if it’s correct that you don’t actually need

24 30 per cent of the space to be devoted to

25 infrastructure, then it follows that the cost of

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1 the infrastructure will be commensurately lower, doesn’t 1 conservative estimate, a very low estimate for how long
2 it? 2 you would need. In some cases it is considerably
3 A. No, it doesn’t, the infrastructure cost is, actually, 3 longer.
4 broadly, will be driven by the cost of connections to 4 There are usually other costs which are also
5 the local utilities, which is based on the amount of 5 involved in getting permits in Russia.
6 supply that you require in terms of kilowatts or in 6 Q. But an experienced property developer would know all
7 terms of water supply, or in terms of cubic feet of gas. 7 about the process for getting a permit, wouldn’t they?
8 You have to buy that capacity from the local 8 A. They would, and they would correctly account for the
9 authority as a set scale. There are, as is the way of 9 amount of time and cost that it would take.
10 these things in Russia, inevitably other incidental 10 Q. They would probably have contacts in the local
11 costs along the way. The biggest issue that defeats the 11 administration?
12 feasibility of developments, be they for industrial or 12 A. In that case you are talking about local developers who
13 for warehousing or for residential in Russia, is the 13 are small in number, have significant bargaining power.
14 cost of connecting to the utilities. So when I’m 14 It doesn’t — regardless of the number of connections
15 talking about the infrastructure costs, I’m really 15 that you have, the permitting process still takes
16 talking about the connection charges, which are 16 a considerable amount of time. By way of illustration,
17 significant rather than the cost of building the roads. 17 and it’s been streamlined a little bit, but essentially
18 Q. Is one of those connections a connection to 18 in order to get a consent, which is a construction
19 the electricity supply? 19 permit so that you can start construction, you have to
20 A. It’s all of the connections, yes: electricity, gas, and 20 change the use of the land, the classification, first.
21 drainage. 21 You have to then get what’s called project planning, and
22 Q. So if there is already a functioning electricity 22 then you have to get a pre-planning approval, and then
23 substation on the site then obviously you wouldn’t need 23 you have to get a construction permit based on
24 to incur much costs in relation to that? 24 a physical design.
25 A. Correct. I have taken that into account, although I’m 25 In order to get from the first stage to the final
137 139

1 not sure the current status of the transformer there,

2 but I have taken that into account.

3 Q. I think I said you had allowed 30 per cent, but actually

4 it’s 15 per cent, isn’t it? Shall we just look at that?

5 A. Yes, 15 per cent.

6 MR JUSTICE HILDYARD: Where should I look, sorry?

7 A. It’s on {E7/24/12}.

8 MR JUSTICE HILDYARD: Thank you.

9 A. Just above where it says «Total construction cost»,

10 there is an infrastructure cost of 15 per cent.

11 MR MILNER: And as for permitting, Ms Simonova explained

12 that she had included the cost of permitting as part of

13 the construction cost per cubic metre, so if that’s

14 right, then that doesn’t need to be added on again, does

15 it?

16 A. If it has been correctly accounted for it should not be

17 double counted, that is clearly the case. There are two

18 sides to the permitting, the first is the financial cost

19 of obtaining it, which can be substantial, depending on

20 the status of the land. The second is the time period

21 required for getting it. We see that Ms Simonova has

22 assumed that you could start construction on day one.

23 Actually, the permitting process is a little bit more

24 complex than that and it would certainly take — well,

25 a year, nine months to a year would be a very

1 stage of that you need approximately 195 stamps from

2 different people. Regardless of how good your

3 connections are, you still need all 195 stamps and it’s

4 195 different people. The process does take quite

5 a long time. It is a significant drawback, I think, for

6 the Russian economy, and somewhere where we could

7 improve our competitiveness as an economy, but today it

8 is a very laborious and bureaucratic process.

9 Q. Ms Simonova has assumed a staggered construction period

10 with five to 10 houses per year, hasn’t she, so there is

11 some time built into that plan for design and permitting

12 issues to be addressed?

13 A. Yes, I would need to look back on her report on how many

14 she has in year one. As I recall the valuation date is

15 in May and she is building houses in the first year. It

16 would suggest that there is very little time being

17 allowed to get permits.

18 Q. Well, only five houses, so —

19 A. Yes, and how many in the second year?

20 Q. It is 10, I think. {E8/26/27}.

21 A. Yes, so the valuation is at May 2015, which assumes she

22 would take control of the property in June. So in 2015,

23 in which you have six months, you would build five

24 houses, and in 2016, for which you have the full year,

25 you would build 10. To me that suggests that you

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1 believe you can move in and start construction on day

2 one.

3 Q. But you have agreed that residential use is the highest

4 and best use for this land?

5 A. Yes.

6 Q. But that assumes that you will get the permit?

7 A. Yes. Well, yes, assuming that you can get the permit,

8 and I think in this case because the land, although its

9 specific use is for fisheries, it is classified as

10 settlement, and there is, I think, next door, in this

11 specific case I do believe that you would be able to get

12 permits, albeit it is not an easy process, that you

13 would be able to get permits for residential

14 development.

15 Q. It may be laborious, but it is something of a formality,

16 isn’t it?

17 A. Formality is — there’s no such thing as a formality in

18 Russian, but you have the first hurdle, which is the

19 land classification is a settlement. There are a number

20 of processes to go through, nevertheless it will

21 probably take upwards of a year to get the permits, and

22 be quite an expensive process, but I do agree that the

23 highest and best use of the land is for residential

24 development.

25 Q. I suggest to you that that is a pessimistic assumption,

1 also available in the market, so today you can go into

2 the centre of St Petersburg and buy a standing asset,

3 an office, which is earning income, or a standing

4 warehouse, and you will probably get, on the basis of

5 the initial capitalisation rate of 13 per cent. I do

6 not know any investor who would choose the relative

7 riskiness of a development project which takes four or

8 five years to realise over and above buying income —

9 that is income today — if he can actually get a better

10 return on the income today.

11 So if you are using that, it’s not a risk-free rate,

12 the risk-free rate would be the Russian bond rate, which

13 is also a little bit higher, and it is also based on the

14 fact that if we have a rouble cash flow today, as

15 at May 2015 the bank base rate was 11 per cent.

16 Essentially you are saying a discount rate of

17 10.5 per cent, you are saying it is a better investment

18 than putting money in the bank, which I don’t think is

19 probably accurate.

20 Q. Well, it might have been, given what happened to

21 the rouble in and after May 2015.

22 A. The date of valuation is May 2015. Actually, if you

23 look at the exchange rate between May 2015 and where we

24 are today, the significant part of the devaluation of

25 the rouble happened in November and December 2014. As

141 143

1 and actually, Ms Simonova’s plan of constructing all of

2 the houses within the timescale that she has indicated

3 is entirely achievable.

4 A. Well, I disagree. I appreciate that I have the

5 advantage of actually working in Russia and doing

6 development there and advising developers, but I know

7 from my experience that that is just not realistic.

8 Q. Then there is the question of the discount rate, and

9 Ms Simonova says 10.5 per cent, you say 25 per cent.

10 There’s no exact science behind your rate of

11 25 per cent. Is it based more on your sort of feel for

12 what the right level ought to be?

13 A. It’s based on two or three things. Valuation is not

14 an exact science, but it is based on two or three

15 things. Firstly we value a number of land portfolios in

16 the St Petersburg region on a yearly basis for

17 accountancy purposes. They are signed off by the

18 auditors. We are, or we endeavour to be — it’s not

19 always possible — but we endeavour to be as consistent

20 as possible if we use the DCF, which on occasion we are

21 asked to, because accounting is for slightly different

22 purposes, and 25 per cent is the rate that’s generally

23 accepted by the auditors. If we try and go lower, they

24 start to take exception, firstly.

25 Secondly, it is based on an understanding of what is

1 at October, I think actually if you look at

2 about October 28, the rouble was still trading at around

3 about 35 to the dollar. In November and December it

4 went from 35 to 80. From 1 January 2015 it came back

5 and was trading at around about 65 to 70. It has not

6 appreciably changed between that point and now, so

7 actually with changes in the rouble, there is not much

8 difference.

9 Q. No, but you have my point though, which is the rouble

10 has been shown not to be a very stable currency?

11 A. Yes, but you have a rouble cash flow, you have

12 a development that is expecting to earn roubles because

13 you are going to be selling in roubles to Russian

14 buyers, that’s the basis the cash flow has been

15 developed on, or you could put the roubles in the bank

16 and earn 11 per cent. I don’t think that is

17 an unsensible place to start when you are assessing

18 a discount rate for what is a quite risky development.

19 Q. Now, Ms Simonova explained that she had obtained the

20 data for her discount rate from a website called

21 Domodoran. I assume you are familiar with that?

22 A. I’m not, actually. I can’t say that I’ve ever used it.

23 Q. All right. It’s a website where she found data on three

24 Russian development companies which had an average

25 discount rate of 10.5 per cent, and that is the rate

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1 that she has used.

2 Now, isn’t it right that —

3 A. For development companies?

4 Q. For development companies.

5 Now, isn’t it right that the actual data, based on

6 the discount rate that is used by actual Russian

7 development companies, is a more reliable guide to your,

8 albeit informed, but nevertheless unscientific, estimate

9 of 25 per cent?

10 A. We could go back: I believe you admonished me earlier

11 for using Global Ports’ company valuation as a basis for

12 a multiple. Nevertheless, when you are looking at

13 assets that are being sold in the market, and again,

14 I appreciate that I have the advantage of working for

15 a company that buys and sells land, so we have a little

16 bit of extra information, what has been derived on

17 a website that’s based in the US, I would submit does

18 not really have any connection to what is actually

19 happening in the marketplace. We buy and sell land on

20 a daily basis. More importantly, we act for a number of

21 investors who are looking to buy land.

22 I know from discussions with them, and I know from

23 having done a deal on land, albeit in Moscow, for

24 a joint venture, what the return requirements are for

25 a development, and I can tell you the return

1 That is more or less, then, in line with where I am.

2 From what we have been doing in the market, I could not

3 even remotely say that this valuation feels low.

4 Q. Now, moving on to Tsvelodubovo, here the fundamental

5 issue is whether it would have been possible to develop

6 this land for residential use at all, is that right?

7 A. It’s certainly one of the issues. Yes, it’s the first

8 hurdle.

9 Q. Well, it’s a critical issue, isn’t it?

10 A. It is, yes.

11 Q. You say it couldn’t be developed and so it has to be

12 valued on the basis that the land is going to remain

13 classified as agricultural land?

14 A. I believe I said that it would not be viable to do it

15 because the cost of changing the permits and the time of

16 doing it from an agricultural classification would be

17 prohibitive.

18 Q. You say, and this is at {E7/24/23}.

19 A. Yes.

20 Q. That:

21 «It is not realistic to assume that the land can be

22 developed…»

23 A. Yes.

24 Q. «… and certainly not in the timescales that are

25 envisioned.»

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1 requirements are 25 per cent or upwards.

2 Q. Just standing back from it all, just looking at your

3 ultimate valuation of this property, a land plot where

4 you are going to build even 12 houses, but certainly

5 a significant number of houses, in a sought-after — we

6 can debate exactly how sought-after — but nevertheless,

7 an attractive location outside St Petersburg, does your

8 valuation of $2 million or $3 million not feel rather

9 low for an asset of that kind? Don’t you say that

10 $20 million, just taking a very uninformed, and

11 unscientific approach, feels like much more the right

12 sort of ballpark region for a major asset like this?

13 A. Since you have invited me to take an uninformed

14 approach, actually it feels rather high to me. As

15 I said, we are trying — well, we are working for

16 a company called the JENSEN-GROUP, they own a number of

17 land plots, one of them is in Sestroretsk, it’s not the

18 only one that we are trying to sell for them, the

19 portfolio as separate assets has been on the market for

20 some time. We have not been able to procure a single

21 cash offer. In reality, if you were trying to do

22 anything with this site, you would almost certainly have

23 to do a joint venture where someone would come in and do

24 a development of the site and on that basis they would

25 probably give you 20 to 25 per cent of the development.

1 So I think you are saying it is not realistic, in

2 your view, to assume that the land can be developed at

3 all, but if you are wrong about that then it can’t be

4 developed any time soon?

5 A. And it goes on:

6 «… and the level of investment required to try and

7 obtain permits and to supply the site with utilities

8 would prima facie be far too high to make development

9 a viable option.»

10 It’s the third paragraph from the bottom.

11 Q. Now, we know that Mr Arkhangelsky, who, after all, knows

12 this area probably even better than you, did buy the

13 land for development purposes, because he says that in

14 his witness statement. He also obtained architectural

15 drawings and plans for the development that he was going

16 to carry out. But you say, do you, that he was entirely

17 misguided to consider going down that route at all,

18 because the land simply couldn’t be developed, or even

19 if it could, there will be no point?

20 A. If I was asked to advise on the viability of developing

21 on this land plot, my clear advice would be that it is

22 not a viable option and find something else to do with

23 it.

24 Q. It would have been a serious mistake for a businessman

25 to make, wouldn’t it? I mean, we all know that planning

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1 authorities are sometimes unpredictable, but to invest

2 money in land which objectively cannot be developed

3 would be a very serious mistake for any businessman to

4 make?

5 A. I’m not going to opine on the right or wrong of people

6 making business decisions. There was almost a fashion,

7 if you will, that a number of businessmen in

8 St Petersburg, and I work for one of them, wanted to

9 build up land banks of land around the city because they

10 thought over time they would be able to develop it and

11 if they build up a critical mass that they would have

12 some bargaining power with the local authorities in

13 terms of how they get the permissions and that they

14 would have, therefore, some economies of scale in doing

15 it.

16 The times when they were building up those land

17 banks were very different in terms of what was happening

18 in the Russian economy. It was before the global

19 financial crisis. It was before we saw oil prices at

20 $42, as they are today, and things have changed

21 significantly since then.

22 I would say that although in 2007/2008 there may

23 have been some chance of it being a viable development,

24 at no time since then would I believe development of

25 this land to be something sensible to do.

1 Q. At what point do you suggest it became more difficult to

2 change the land use?

3 A. I would say from about 2011/2012 onwards, but that’s

4 only one part of it. I mean, you still — these letters

5 are quite common because it invites an application, it

6 invites people to start the process. The process is

7 good in terms of earning fees for the local

8 administration and, quite possibly, for individuals

9 inside the administration, and it is not uncommon to see

10 letters of this type. It is very far away from being

11 even an indication that consent would be forthcoming, or

12 the costs of achieving it.

13 Q. Now, Ms Simonova gave evidence that there is demand for

14 new housing in this area, in particular because it is

15 a major base for Gazprom; that’s correct, isn’t it?

16 A. St Petersburg is a major base for Gazprom Neft, which is

17 the oil arm of Gazprom. They are relocating their

18 headquarters to the city. They are finding quite a lot

19 of difficulty persuading people to move from Moscow,

20 however the process is ongoing. It has been a boon for

21 the city in general. Whether this particular area has

22 any special interest for people working for

23 Gazprom Neft, I couldn’t say.

24 Q. But if there is a demand for new housing in the area,

25 then that’s going to influence the authority in favour

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1 Q. Can you be shown {E8/26.1/29.1}. Have you seen this 1 of granting permission for the change of use, all things
2 document before? 2 being equal, isn’t it?
3 A. I have. 3 A. All things being equal, I would expect them to build it
4 Q. It’s a letter from the local authority to what’s 4 much closer to St Petersburg. There are already
5 referred to as a «Dacha Non-Profit Partnership», stating 5 significant difficulties with congestion along the
6 that: 6 highway to Finland, which is along this road. It is one
7 «… the authority has no fundamental objections to 7 of the major routes for incoming road transports, which
8 the organisation of dacha households on [a number of] 8 is significantly important. I’m not sure that they
9 land plots.» 9 would want to be increasing congestion along this route,
10 Which, take it from me, are the land plots that we 10 if they could avoid it.
11 are talking about. 11 As you pointed out, Russia is a very big country.
12 A. Yes. 12 There is a lot of land a lot closer to St Petersburg
13 Q. So this shows, doesn’t it, that at the very least, 13 which I think would be far more suitable for development
14 residential use of the land was possible? 14 for housing to meet the incoming Gazprom population,
15 A. Yes, and this letter in and of itself has very little 15 albeit that that’s possibly 5,000 to 10,000 people, in
16 power. If you direct any enquiry to the relevant 16 a city of 8 million.
17 authorities you will probably get a similar answer, 17 Q. But it’s not only St Petersburg, is it? It is also
18 which is: we have no fundamental objection, if you put 18 Vyborg which is an important base for Gazprom?
19 in a proper consent, we will consider it on its merits. 19 A. It could be. I’m not aware of Gazprom’s operations in
20 In a case where land is classified as agricultural 20 Vyborg.
21 use, I appreciate this letter was dated in 2009 and 21 Q. I suggest to you that, particularly in light of
22 things have changed a bit since then, but it has got 22 the confirmation that the local authority had no
23 significantly harder to change the classification of 23 fundamental objections, it is unduly pessimistic to
24 land which is agricultural because it is considered to 24 think that permission would not have been granted to
25 be a strategic asset of the Russian Federation. 25 change this land to residential use?
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1 A. You may say pessimistic, I would say the product of 1 So it is a provisional green light, isn’t it?
2 unfortunate experiences. I don’t think it’s 2 A. Well, it’s essentially the same letter as the one that
3 pessimistic, I think it is realistic. I think that 3 we have just discussed and I would accord it the same
4 that’s grounded in me having gone through the process 4 weight. It is an invitation for the landowner to start
5 with a number of developers in understanding what is and 5 spending money. It is far from an indication that there
6 what is not realistic. 6 would be a consent forthcoming.
7 Q. You have no positive reason for saying that permission 7 Q. But to conclude that a change to residential use is
8 should or would be refused, have you? Why would the 8 almost impossible, which is what you say, is going too
9 administration not grant permission? 9 far, isn’t it?
10 A. Because there is a presumption against reclassification 10 A. I believe I said, very similar to what I did in respect
11 of agricultural land for residential development, or for 11 of the last land plot we were discussing, which was
12 any development. 12 although it may be possible, in terms of the cost of
13 So in order to clear that hurdle, and today it is 13 doing so, both direct and indirect costs and the time it
14 considered a strategic asset, is fundamentally 14 would take to do it would make it prohibitive.
15 difficult, so actually I do. 15 Q. Now, you also say that it would be practically
16 MR JUSTICE HILDYARD: Your unfortunate experience is in 16 impossible, for reasons of cost or otherwise, to install
17 the context of having received a letter of the sort that 17 the necessary utilities to connect this land to
18 we have been looking at at {E8/26.1/29.1}? 18 the network.
19 A. Yes. I mean, not specifically in the Vyborg regions, it 19 A. Yes.
20 could be different for different authorities, but I had 20 Q. Can we look at {E8/26/35}. Now, in that lower picture,
21 a developer client who had a couple of land plots on 21 you can see that there already are some houses in the
22 major highways outside Moscow, actually much closer to 22 area. Do you see that?
23 Moscow than this. He had indication from the local 23 A. Yes. I can’t tell where this photograph was taken from.
24 authorities in a letter very similar to this that — in 24 It is not indicated on the map.
25 this case it was for development of a shopping centre 25 Q. Well, assume this is from the land that we are talking

153

1 next to the highway, but he had an indication that the

2 local authority would look favourably upon any

3 permission, and then he spent quite some money on the

4 basis of that positive recommendation, and then the

5 authority changed their mind. The issue — I mean, they

6 can change their mind willy nilly, but it is also that

7 the people making the decisions tend to change quite

8 quickly as well, on a reasonably regular basis, and the

9 new people coming in may have a very different view.

10 So unless you actually have some form of formal

11 consent or a change of classification, it’s quite

12 difficult to rely upon.

13 MR MILNER: Let’s turn to Seleznyovo. Here again the issue

14 is whether the highest and best use is agricultural or

15 residential, isn’t it? Is it right to say that all the

16 same arguments we have been having apply equally to that

17 land?

18 A. That would be fair to say.

19 Q. If you look at {E8/26.1/30.1}, here we have a similar

20 letter from the administration saying they have:

21 » … no fundamental objections to the inclusion of

22 the land plot … into the limits of the city of Vyborg

23 with the subsequent change of said land’s designation

24 from ‘agricultural land’ to ‘settlement land’ for the

25 purpose of low-rise housing construction».

155

1 about. There must, presumably, already be some

2 utilities there?

3 A. Yes, I say — it’s a bit of a — if you go to the next

4 page, which is {E8/26/36}, or it says «Land plot at

5 Seleznyovo», so it is presumably actually the land plot,

6 I can’t see anything there other than trees and fields.

7 I’m really just going on the commentary in the report

8 here, which is on the next page, {E8/26/37}, which

9 I believe his Lordship was asking about earlier on,

10 which does state that it would have to be connected to

11 the infrastructure in Vyborg, and the report says Vyborg

12 is 15 kilometres away. So the cost of making the

13 connections as well as the cost, presumably, of

14 acquiring the easements and the rights over all the

15 intervening land, it is likely to be very costly indeed.

16 Q. Well, yes, if you were starting from scratch and had to

17 connect things from Seleznyovo all the way to Vyborg.

18 A. Yes.

19 Q. But if there are some utilities, or some access to

20 the network which is available nearby, then it is going

21 to be significantly easier and cheaper, isn’t it?

22 A. Which is an if, and, again, as I outlined when we were

23 discussing Sestroretsk, that’s one part of it. The

24 second part is also having to pay for the capacity. The

25 fact that there may be some housing next door which may

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1 have some electricity supply is very far from saying

2 that there is electricity there of a sufficient capacity

3 to meet any future development, and it’s clear from the

4 report that you would probably have to go to connections

5 to Vyborg, and if that’s the case, or even if that is

6 not the case, it’s probably very difficult, and the cost

7 would be, in my opinion, very, very high indeed.

8 MR JUSTICE HILDYARD: I suppose infrastructural improvement

9 might encourage the planners, if I can call it that way?

10 A. Well —

11 MR JUSTICE HILDYARD: I mean, there’s an existing

12 settlement.

13 A. Yes, I mean it’s not clear to me from the map, it does

14 seem like there’s very little around, and I did go onto

15 Google Earth, so I’m not sure how close it is. Planners

16 can be encouraged, I’m not sure that infrastructure

17 improvement is the way to achieve it, but certainly you

18 would not expect that you would get any help for

19 infrastructure unless there is something significant in

20 the area that was going to benefit from the local

21 authority. They would expect you to be paying for it

22 yourself, and if those connections are distant and

23 troublesome, then they will be very expensive.

24 MR MILNER: Now, all of your other points I think are

25 matters we’ve already discussed in relation to

1 really, in relation to these, aren’t there? One is the

2 size of the property that you are valuing, and the other

3 is what are the right comparables?

4 A. Yes.

5 Q. Now, in terms of the size, Ms Simonova has taken into

6 account an additional 100 square metres compared to

7 the size of the property that you valued.

8 A. Yes.

9 Q. That’s right. Now, can we look at {E8/26/58}. Let’s

10 stick with that for now.

11 Now, you can see from the pictures there that there

12 is some form of mezzanine level that’s been installed;

13 do you agree with that?

14 A. Yes, that appears to be the case here.

15 Q. Although the full size of it isn’t apparent from the

16 pictures, the description that Ms Simonova has proceeded

17 on gives the area as 100 square metres?

18 A. I believe Ms Simonova in her report says that she’s made

19 an assumption based on a standard percentage of

20 the overall size of the existing apartment. (Pause).

21 Q. Yes, you are right. She uses an assumption that it’s

22 two-thirds the size of the first floor.

23 A. Yes.

24 Q. Now, whatever the precise size of it, it is clear that

25 there is that additional level, and that is going to

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1 Sestroretsk. I don’t want to cover the same ground

2 again. Can I take it that you will give me the same

3 answers: in other words, you will stick to your opinions

4 as set out in your report?

5 A. Yes.

6 Q. And Ms Simonova likewise.

7 There is just one difference, perhaps, with this

8 property, which is you give a much longer period for

9 marketing: three years as opposed to one. I have to

10 suggest that that is an extraordinarily long period for

11 a development of this kind; do you want to comment on

12 that?

13 A. I would disagree, bearing in mind that the land plot is

14 significantly larger, and therefore the total number of

15 houses is obviously greater, and the site is further

16 from St Petersburg. If you are selling the same number

17 of houses — sorry, if you want to start from the

18 assumption that you can sell the same number of houses

19 as Ms Simonova believes for the other land plot,

20 although that is a stretch because you are further from

21 St Petersburg, and I don’t think you can sell them any

22 faster, the fact that you have more houses would suggest

23 that they are going to take longer to sell.

24 Q. Can we move, now, to the apartments, finally. The

25 apartments at Kharkovskaya Street, there are two issues,

159

1 command a premium, isn’t it, over the price of a flat

2 without the additional floor space?

3 A. Yes, I think that’s probably fair to say, actually. The

4 fact that there is additional space, albeit that there

5 is no legal title to it, so you couldn’t purchase it as

6 such, but if you took the view that that extra

7 accommodation and you are not so worried about the title

8 issues, then it is a benefit of the apartment, yes.

9 Q. And in terms of the size of the premium you would apply,

10 that would just be on a standard price per square metre

11 basis?

12 A. Yes, I mean, you would look at the registered title,

13 what the size is. I think you should be applying the —

14 your calculation to that, because that’s the legal

15 title. There may be a case then for applying a premium

16 to that, taking into account everything. What that is,

17 I’m not sure because probably a number of the other

18 comparables have similar types of facilities.

19 Q. Do you have any more educated guess than Ms Simonova has

20 been able to come up with as to the likely size of

21 the additional space?

22 A. No, I would hesitate to make such a guess.

23 Q. Now, in terms of the location, these apartments are

24 located in the central district of St Petersburg, aren’t

25 they?

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1 A. That’s correct, yes.

2 Q. And can we have {E6/23/32} this is what you say about

3 the central district. At the bottom of the page you

4 say:

5 » … [it] is the main business district of

6 St Petersburg. In addition it is home to many tourist

7 and cultural landmarks such as the Hermitage…»

8 So it is very central and very prestigious, isn’t

9 it?

10 A. It is centrally located, it is a prestigious location.

11 It’s not the most prestigious location, but it is a good

12 location.

13 Q. And this apartment is close to Vosstaniya Square, isn’t

14 it, which is in the middle of Nevsky Prospekt on a north

15 to south orientation?

16 A. Yes, Nevsky is split into two parts so you have the part

17 which runs from the Hermitage which is on the river, to

18 the Moskovsky railway station, which is where the square

19 is, this apartment is kind of just behind the railway

20 station, and then there is the second part of Nevsky

21 which runs on. The first part from the railway station

22 to the centre is the most prestigious part, but this,

23 it’s fair to say, is not that far behind.

24 Q. Can we look at {E7/24/31}. This is a map of all of

25 the comparables that you and Ms Simonova have used in

1 number 2, hasn’t she?

2 A. Yes.

3 Q. And I assume that you will say what Ms Simonova did,

4 that you believe your comparables are more

5 representative and it is a matter of judgment for his

6 Lordship at the end of the day which ones to go with; is

7 that fair?

8 A. Yes, I believe that’s right. I think if you make

9 adjustment for the size, there’s probably not a huge

10 amount of difference between the two opinions at the end

11 of the day.

12 MR MILNER: Thank you. I am not going to ask you about the

13 parking spaces and nor, indeed, about anything else. So

14 thank you very much.

15 A. Okay, thank you.

16 Re-examination by MR LORD

17 MR LORD: Mr Millard, just, I think, three areas I would

18 like to ask you some questions about. Could you be

19 shown [draft] page 98 of today.

20 You gave some evidence about First Container

21 Terminal.

22 A. Yes.

23 Q. And you gave some evidence about its capacity, and so

24 on. I wonder could we have up on screen {E6/23.2/1}.

25 I think this is exhibited in one of your reports?

161

1 relation to this property; is that right?

2 A. That’s correct.

3 Q. So we see the subject property in red towards the lower

4 right-hand border.

5 A. Yes, number 28, I think.

6 Q. And your comparables in purple and Ms Simonova’s in

7 blue?

8 A. Yes.

9 Q. You make the point that some of Ms Simonova’s are in

10 the red zone, which is the prime land in St Petersburg,

11 but if you leave aside those, then they are broadly the

12 same, aren’t they, in terms of proximity to the subject

13 property and location generally?

14 A. Yes, I mean if you take out the ones which are inside

15 the red square, albeit that everything that is in the —

16 you can see there it says — well, you see where the

17 railway tracks come in, so everywhere to the left of

18 that is really the more prestigious area, so anything to

19 the right is of a slightly lower, albeit not huge, but

20 of a slightly lower quality.

21 So the ones on the right of that are better

22 comparables, because that is a sub-market in and of

23 itself.

24 Q. And actually Ms Simonova has used the closest,

25 geographically speaking, of all the comparables,

163

1 A. Helpfully it is still here.

2 Q. Yes, that’s right. I hope this is not in contention,

3 but can you confirm that the pink shaded area on the

4 left-hand side of this map, number 17, that that’s the

5 First Container Terminal site that you were referring to

6 today?

7 A. That’s correct, yes.

8 Q. And you are contrasting that, aren’t you, with the

9 Western Terminal site at number 13?

10 A. Yes.

11 Q. Are there any other points that you would make in

12 relation to the comparison between those two potential

13 port sites?

14 A. I don’t think so.

15 Q. You were asked about Onega Terminal earlier today, and

16 you identified two particular features that you said

17 would move the case — that would bear upon the question

18 of whether it was a TRP or not. One of the points,

19 I think the first one, was you said land was in

20 a different ownership, and it wouldn’t necessarily

21 follow, I think, that separately they would be going

22 concerns; do you remember that evidence?

23 A. Yes, I said that it —

24 Q. Could you explain to his Lordship what you had in mind

25 by that answer?

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1 A. Well, if you look at the land in question that is 1 A. I believe I said that it would probably not be viable to
2 the subject of my first report. 2 operate it for its existing use for the land in
3 Q. Can we have, please, on screen — 3 isolation.
4 A. Actually, I will give you the reference. 4 Q. I think you gave two reasons: one was the absence of sea
5 Q. Actually, could we have — go on, you identify the one 5 access, and the first was —
6 you want to refer to. Is it {E6/23/23}? Sorry, 6 A. The split of the land ownership, yes.
7 {E6/23/22}? 7 Q. And what did you have in mind by the first of those two
8 A. Yes, that’s correct, yes. 8 reasons, then?
9 Q. Can you — I mean, sorry, Mr Millard, can you identify, 9 A. Well, if you are using the plot of land for the import
10 can you orientate his Lordship a bit? Can you actually, 10 and transshipment of cars from roll-on roll-off ships,
11 perhaps, point or identify — 11 which is the current ownership — which, sorry, is the
12 A. Okay, in the bottom right corner, and coming from the 12 current business model, obviously if you don’t have
13 city, which is to the right, is the main road, which 13 access to the sea and you do not have an agreement for
14 comes out, and it goes down actually, then, to 14 the actual unloading and loading of the cars with the
15 the fishing port beyond, which is out to the left. 15 person who has the access to the sea, you cannot operate
16 In the bottom right corner is the entrance to 16 it for that use.
17 Onega Terminal itself, that’s where the security is and 17 Q. And can you be shown, please, today’s [draft] transcript
18 where the big gate with the sign saying «Onega» is that 18 at page 113 to 114? I think you made reference to
19 you will have seen in some of the photographs. 19 the agreement, line 18 on 113, the 11-month service
20 Obviously this land does not have any direct access 20 agreement. Could you be shown, please, {D27/463.1/0.1}.
21 either to the access road or to the port itself in terms 21 Is that the service agreement to which you were
22 of the berths. So it’s difficult to see how it could 22 referring?
23 operate in isolation of the land around it. 23 A. Yes.
24 Q. And can you identify — is that — is the highlighted 24 Q. And could you tell his Lordship what you understand this
25 area there just the first five, in other words, the 25 agreement to comprise, just in outline?

165

1 Scandinavia Insurance plots?

2 A. Yes, that was my initial valuation, that’s what I was

3 instructed to value from my first report.

4 Q. And can you show his Lordship on that plot, on that

5 photograph, where the LPK Scan, in other words, items 6

6 and 7 were?

7 A. Well, if you can see where it says «Onega Terminal»

8 underneath the red block.

9 Q. Yes, I can.

10 A. Okay, so broadly speaking, running from that corner down

11 the road that you see, and then over to the right-hand

12 corner, and the bit that wraps around, that land, as far

13 as I understand it, from memory that is the second block

14 of land.

15 Q. In other words, the LPK Scan plot, that’s the bigger

16 plot, that’s actually further in land, is it, than the

17 Scandinavia Insurance?

18 A. That’s correct, it is between the access and the plot

19 itself.

20 Q. And neither of those plots actually have direct access

21 to the water, do they?

22 A. That’s my understanding, hence the service agreement for

23 the loading and unloading.

24 Q. And were you making a point about the viability of —

25 I think you were asked —

167

1 A. Well, it’s my understanding that it’s a service

2 agreement that allows Sea Fishing Port, which is the

3 owner of the next door property, and with the access to

4 the berth itself, to provide unloading and loading

5 services for the benefit of Onega Terminal.

6 Q. So basically Sea Fishing Port provide a sort of

7 stevedoring service, do they really, here?

8 A. They do, yes.

9 Q. And if we go, please, to {D27/463.1/0.3}, can you look

10 at clause 9.1. If says:

11 «This Agreement shall come into effect from the date

12 of its execution … and shall remain in force for 11

13 months.»

14 A. Yes.

15 Q. And this was the agreement you had in mind?

16 A. Yes.

17 MR LORD: Thank you, Mr Millard.

18 My Lord, those are my questions in re-examination.

19 Questions by MR JUSTICE HILDYARD

20 MR JUSTICE HILDYARD: Yes, just a few questions, Mr Millard,

21 and starting with Onega and the agreement that we saw.

22 A. Yes.

23 MR JUSTICE HILDYARD: It is obvious from the plans and what

24 you have explained to me that there is no berth on the

25 Onega land; I quite understand that.

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1 A. Yes.

2 MR JUSTICE HILDYARD: But I think that Ms Simonova’s point

3 was its proximity to the berth and its utility, having

4 regard to the facilities already there for easy import

5 and import clearance.

6 Now, as I understood her evidence, that factor,

7 that’s to say its utility as an import clearance

8 facility, its utility as a ro-ro depot very, very close

9 to available berths, and then secondly, that proximity

10 to the berths, and third, the likely coincidence of

11 economic interest between the persons who own the

12 Onega Terminal and the persons who are the party to

13 the 11-month agreement, are likely to combine to mean

14 that the Onega Terminal is very indicated, to put it at

15 its lowest, for the use which, in fact, it was put to.

16 A. Yes. I take the point that you have the block of land

17 which is the subject of my valuation which we have just

18 looked at, and the second part around it, which is

19 LPK Scan, which is probably a connected party, and

20 therefore you can treat those two as a single entity, in

21 which case it is a trade related property.

22 There is some merit to that discussion. What is

23 clear is that the fishing port controls the access to

24 the berth and that is not, or was not at the date of

25 valuation, I believe it might have changed, but

1 A. Yes.

2 MR JUSTICE HILDYARD: And we don’t know, really, what times

3 of day the berths are used for fishing and what times of

4 day the berth might be utilised for landing cars. So

5 there are all sorts of complexities, I understand that,

6 but one might think that where there was an economic

7 will, there would be an economic way.

8 A. Yes. I’m not sure the fishing port is actually still

9 used for fishing, I believe it is just the name.

10 But, yes, clearly there is a confluence of interest.

11 Obviously the Sea Fishing Port, and we can see it from

12 the map, has a lot of other land, so it’s not that they

13 cannot use the berths without Scandinavia or

14 Onega Terminal, because they have their own land next

15 door. If we go back to the map here —

16 MR JUSTICE HILDYARD: Yes, I like that map very much, but

17 I have lost it.

18 A. Yes. So Onega, sadly, is not actually shown.

19 MR JUSTICE HILDYARD: It is on the left.

20 A. Sorry, it is up here, yes.

21 MR JUSTICE HILDYARD: It is a rather skinny bit on the left.

22 I think I was looking at this overnight and I have lost

23 it. Does anyone have a copy?

24 A. I can pass this over, sir. I have a bigger one.

25 MR JUSTICE HILDYARD: I do apologise, I eat papers.

169 171

1 certainly it was not a connected party, and therefore

2 you were entirely reliant upon them for access to

3 the berth and for unloading and loading.

4 It is probably also worth pointing out, and I just

5 said a little bit earlier, that Ms Simonova in doing her

6 analysis and in doing her valuation of the TRP is

7 assuming that Onega Terminal can earn fees from loading

8 and unloading without any associated costs, or paying

9 for that to the Sea Fishing Port, and actually I believe

10 that is probably quite a significant part of the income

11 that she has included in the DCF, and if there have not

12 been any offsetting costs what needs to be paid for that

13 access, then it is possible that the income has been

14 significantly overstated.

15 MR JUSTICE HILDYARD: I can understand that, but on the

16 point which I was asking about, that is to say the

17 coincidence of economic interests between the persons

18 who own the berth, the fishing people —

19 A. Yes.

20 MR JUSTICE HILDYARD: — and Onega Terminal, that would be

21 pretty complete as long as the money was right, wouldn’t

22 it?

23 A. Correct, and as long as you correctly account for it in

24 your calculations.

25 MR JUSTICE HILDYARD: Yes.

1 (Handed).

2 A. So number 9, which is the dirty yellow on the far left,

3 that is the fishing port.

4 MR JUSTICE HILDYARD: Yes.

5 A. So you can see actually they have probably more land

6 than Onega which is the little wedge between the fishing

7 port and the railway line down to number 11. So the

8 fishing port can survive without Scandinavia, but

9 probably without Onega, but Onega would find it

10 difficult to operate without the fishing port.

11 Obviously there is an economic way of getting around

12 that, as long as you are, therefore, accounting

13 correctly for all of the loading and unloading costs

14 which would probably, presumably, be being earned by the

15 fishing port rather than by Onega.

16 MR JUSTICE HILDYARD: Yes.

17 But the availability of a bargain of that kind,

18 together with the associated party coincidence of

19 interest, and the potentiality of the property for

20 economic use as a ro-ro facility, weight it in favour of

21 TRP, do they not?

22 A. Yes, I believe I said there is more a case for a TRP in

23 the case of Onega than there is for Western Terminal.

24 You just need to make sure that you account for all of

25 the cost involved.

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1 MR JUSTICE HILDYARD: Yes.

2 Comparables, if I can turn to that rather difficult

3 area.

4 A. Yes.

5 MR JUSTICE HILDYARD: One rather thinks with comparables

6 that there must, at least, be some similarity of likely

7 demand underlying the market which you say is

8 comparable. I mean, I think Mr Milner put it in terms

9 of whether someone buying a £1 million house would be in

10 the market for a £500,000 house, and there were various

11 exegeses of the different areas of London, which

12 I didn’t think necessarily illuminated the matter, but

13 what I thought he might additionally be getting at is

14 the similarity of underlying demand.

15 A. Yes, I think the point Mr Milner made was well made:

16 that the people who are probably buying industrial land

17 and the people who are buying ports are a different type

18 of buyer, or a different set of buyers. The people who

19 could possibly buy the port, particularly in the case of

20 Onega where they are reliant on other people, is

21 probably fairly limited.

22 But what is clear, at least what is clear to me, is

23 the trade in and out and the ability to manufacture

24 stuff, or have industrial land in the immediate

25 vicinity, depends on the underlying economic strengths,

1 are very different things, aren’t they?

2 A. The comparables used are all in the Kirov District of

3 St Petersburg, they are not very far from the port at

4 all. If you want to have a warehouse in and around the

5 port, you may say: I want to be 10 metres from the

6 sea — that’s the case with Onega, probably, roughly —

7 or: I am happy to be 200 metres from the sea, is there

8 a premium for the land that is closer to the sea? Yes

9 there is. I’ve used a premium of 100 per cent. Is that

10 right? It’s not easy, it’s not a science, and I can’t

11 say: yes, that’s exactly the right number, but

12 experience suggests that that’s probably broadly right

13 where you are using as a baseline something which is for

14 the same use and very close by, albeit that it is

15 500 metres or 300 metres from the berth rather than

16 10 metres. Clearly it is better to be close, and hence

17 the application of the uplift.

18 But the people looking for warehouses in the Kirov

19 District close to the port are probably a similar set of

20 people, albeit some would want to be right on the port

21 and some are happier to be a bit further away.

22 MR JUSTICE HILDYARD: People very rarely pay for economic

23 advantages they do not need, because they usually cost

24 them.

25 A. Correct, and if you want to have just a warehouse, there

173 175

1 macroeconomic strengths, in general, and the two do go

2 up and down in lockstep and there’s clearly a link

3 between them.

4 There could be an argument that that has changed

5 over the last couple of years where we have seen the

6 implementation of sanctions and counter-sanctions from

7 Russia, which means that the amount of trade with Europe

8 has significantly gone down because you can’t send food

9 to Russia and you can’t — you know, you take less

10 things out, which means there has been a much greater

11 focus on local production of everything, really. And so

12 that would perhaps argue that the price of industrial

13 land will have gone up relative to trade, because there

14 has been much less trade, which has dropped off

15 significantly over the last 12 months. But in general

16 the underlying macroeconomic conditions would affect

17 both more or less equally.

18 MR JUSTICE HILDYARD: But to put it rather inelegantly, and

19 probably too vernacularly, if someone comes to you and

20 said: I would like a warehouse, and you said to them:

21 I’ve got just the thing for you, it’s a port terminal,

22 they would think you were off your head, wouldn’t they?

23 A. Yes, they would. They would rather have the

24 warehouse — depending on what they want —

25 MR JUSTICE HILDYARD: It depends on what they want, but they

1 are any number outside St Petersburg. There’s a ring

2 road, it’s called KAD, which basically means circular

3 road, and there are any number just outside that on

4 major highways, and you can go there and pay 50 per cent

5 of what you would pay to have a warehouse in Kirov,

6 which is close to the port, or if you want to be right

7 on the port, you would probably pay more.

8 But that’s correct: if you don’t have the

9 requirement to be close to the port, you would just rent

10 a warehouse outside the city, where you have access to

11 the major infrastructure.

12 MR JUSTICE HILDYARD: The comparability is quite tenuous, is

13 it not?

14 A. I’m not going to say it’s perfect. It’s far from

15 straightforward, and I’m not going to say it was

16 a straightforward process. We went through quite a lot

17 of soul-searching in terms of what we thought was the

18 right answer, because it is clearly not difficult —

19 it’s clearly difficult, and, as I explained at the

20 outset, actually there’s very little assets trading at

21 all in the market. So, you know, finding a buyer would

22 be problematic full stop.

23 As I say, we went through a lot of soul-searching

24 and looked at different ways, and we felt, and

25 I specifically felt, having looked at it with

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1 my colleagues, that this was the best way to get at the 1 whether your Lordship wishes to make any direction at
2 best answer. I’m not going to say it’s perfect, but 2 this stage about next week; whether your Lordship has
3 I do strongly believe, and it is my opinion, that it is 3 taken the view that we might have the Russian law
4 very close to what the right answer should be. 4 experts or whether, in reality, Russian law experts and
5 MR JUSTICE HILDYARD: Given the complexity, were you tempted 5 whatever happens in the Popov/Steadman expertise will
6 to undertake your own separate DCF? 6 not take place next week, in which case we can, if you
7 A. No, because it is too complex and the range of results 7 like, stand various people down and get dates to avoid
8 you can get is so enormous that you cannot — that 8 some time later this term.
9 choosing where to land and what is correct, and 9 MR JUSTICE HILDYARD: I don’t think the Popov/Steadman and
10 particularly when we have the benefit of hindsight, 10 the Russian experts are necessarily yoked at all,
11 which shows what happened to trade, has shown that a lot 11 I think they may go their separate ways, that is one
12 of what was in the original business plan has ended up 12 point.
13 being very far from reality, you know, to try and go 13 The second point is, and I make this for the
14 through the process with so many assumptions and so many 14 transcript, so that Mr Stroilov can read it: my
15 variables — all of which if you change a little bit, 15 understanding is that whilst it was not impossible for
16 you have a big change in the answer — I couldn’t feel 16 his Russian law expert to be available, it was difficult
17 that I could have any confidence in my results coming 17 because of the other commitments. That seems to point
18 about it that way. 18 in favour of a small delay to ensure that a time
19 MR JUSTICE HILDYARD: Right. Thank you very much. 19 convenient for both Russian experts and Mr Stroilov and
20 Do any questions arise out of those questions? 20 Mr Birt’s preparation is made available, taking
21 MR MILNER: No, my Lord. 21 advantage of the fact that we do not need translation,
22 MR JUSTICE HILDYARD: Thank you very much indeed. 22 and you are not personally undertaking that part of
23 A. You are welcome. 23 the cross-examination.
24 MR JUSTICE HILDYARD: Thank you very much for your 24 So my feeling is, as I expressed yesterday, and
25 assistance. 25 I will firm up on this before Thursday, or having heard
177 179

1 Well.

2 MR LORD: Extraordinary, my Lord. Mr Milner has ended the

3 erratic timetable. I think we should have more of

4 Mr Milner, if I may respectfully submit.

5 MR JUSTICE HILDYARD: I think we are all surprised, we are

6 silenced.

7 MR LORD: Day 37. I knew there would be some good news on

8 the horizon, and so it has proved.

9 MR MILNER: I can only apologise for the inefficiency of

10 (inaudible).

11 MR JUSTICE HILDYARD: No, we are very grateful, but we are

12 shocked. Shall we have a little break now? What are we

13 going to do? In the absence of —

14 Housekeeping

15 MR LORD: Perhaps knock off, my Lord, I suppose.

16 My Lord, I spoke to Mr Milner earlier about the

17 question of the timetabling and the Mr Popov/Mr Steadman

18 point. He indicated that Mr Stroilov is really seized

19 of the arguments in that respect and he is not.

20 Mr Stroilov is obviously not here. So I am not sure

21 we will be able to do that today, but we would suggest

22 that your Lordship identify perhaps Thursday morning

23 before we start to have a slot for that to be resolved

24 so that we can plan the timetable from now on.

25 That would only leave the question, really, of

1 any further detail I need, is that the Russian law

2 expert evidence will be deferred.

3 On the dates that you ask me, I think that, subject

4 to one date, we can do that. I am not able to do

5 10 May, I have a pleasurable but public commitment on

6 that day, but otherwise 3rd, 4th, 5th, 9th, 11th and

7 12th appear to be, in principle, available. That’s

8 that.

9 Popov/Steadman. Can I just ask for clarity once

10 again in the expectation that Mr Stroilov will be

11 reading this. It appears that if it goes ahead now, you

12 will not have the prospect of cross-examining

13 Mr Steadman because he simply won’t be here. In those

14 circumstances, if you had everything your own way, what

15 would be the position that you advocated? That both

16 experts are simply read, or that Mr Stroilov, with any

17 assistance that he may have from Ms Simonova, should

18 have the opportunity to cross-examine your expert that

19 you — though that wouldn’t be reciprocated. What do

20 you say is the right answer, if it goes ahead?

21 MR LORD: Well, my Lord, we would be calling Mr Popov in

22 accordance — with permission, to adduce oral evidence.

23 We would be tendering him for cross-examination, if he

24 were required to be cross-examined; in other words, if

25 there was any challenge to anything that he said, then

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1 one would expect that there might be cross-examination

2 of it. If it is accepted, then obviously he wouldn’t

3 need to come, and that would deal with Mr Popov.

4 Then one would move to the separate question, which

5 we haven’t yet resolved, which is the question of

6 Mr Steadman, because it’s not really for me — I’m not

7 adducing Mr Steadman’s evidence, as it were, my Lord, if

8 that makes sense.

9 MR JUSTICE HILDYARD: Yes, but you would be objecting, if

10 Mr Steadman does not attend, to my giving that the

11 status of evidence and any weight therefore?

12 MR LORD: Yes, my Lord, because we would be submitting —

13 well, the first question would be what’s the reason that

14 Mr Steadman hasn’t come to be cross-examined.

15 MR JUSTICE HILDYARD: No, I understand that, I’m asking you

16 for your —

17 MR LORD: And your Lordship would obviously — if a witness

18 isn’t tendered for a cross-examination, the question is

19 has a reason been given and is that a sufficient reason,

20 and you know our submissions on that.

21 MR JUSTICE HILDYARD: I see. It would be troublesome for

22 me, because unlike fact evidence where unless contrary

23 evidence is adduced, there is no reason not to, unless

24 contradicted by documents, or some such, of accepting

25 the evidence, that’s not the case with expert evidence

1 MR LORD: My Lord, if there is an issue, if, in fact, there

2 is going to be an issue, which is that the assistance

3 that Mr Stroilov would say he would want to have

4 rendered can only be given next Tuesday or not at all,

5 then that is a matter that I think should be put to

6 the court. It would be a shame if we don’t get to it,

7 if we make a decision today, and then on Thursday

8 morning we are told that actually it’s too late.

9 MR MILNER: My Lord, I understand it doesn’t make any

10 difference from our point of view — if it happens at

11 all, it doesn’t make any difference whether it is next

12 Tuesday or some later date.

13 MR JUSTICE HILDYARD: I’m grateful. In that case, I think

14 for the sake of certainty, and also because on any view

15 it is going to be an odd feast, I think we had better

16 defer Mr Popov until a date to be established.

17 MR LORD: My Lord —

18 MR JUSTICE HILDYARD: If he is to be required at all.

19 MR LORD: Yes. And would your Lordship hear that point, or

20 resolve that point, on Thursday? I hesitate to say

21 9.30, but with Mr Milner gone we can return to our

22 typical timekeeping, we could get that decided. I am

23 conscious, my Lord, we are going to break fairly soon

24 after Ms Yatvetsky, and the parties needs to know when

25 we are coming back for the remaining bits of expert

181 183

1 where there is an opinion and the court just has to

2 determine whether it shares it. So it does put the

3 court in a great difficulty, but there we are. I won’t

4 spoil the afternoon at 3.35 when we have achieved this

5 miracle.

6 MR LORD: Do I take it from your Lordship that your Lordship

7 doesn’t have in mind Mr Popov coming on Tuesday, next

8 Tuesday?

9 MR JUSTICE HILDYARD: It’s next Tuesday, is it?

10 MR LORD: Yes, so I am assuming that —

11 MR JUSTICE HILDYARD: I think, again, certainty is the

12 better course. I think we had better stand him down for

13 Tuesday.

14 MR LORD: We would respectfully endorse that, my Lord.

15 Your Lordship needs to decide the question that has been

16 called the Popov/Steadman question, and then we can

17 decide what is to be done, as it were.

18 MR JUSTICE HILDYARD: The only reservation I have in that is

19 I do not know whether Ms Simonova’s assistance is

20 dependent on it happening next Tuesday; do you see what

21 I mean? There are a lot of moving parts which I don’t

22 really understand. My feeling is that if you need

23 certainty, then subject to any prejudice which is

24 asserted on behalf of the defendants, I would propose

25 moving Mr Popov and Mr Steadman.

1 evidence and obviously there is the question of

2 closings.

3 MR JUSTICE HILDYARD: It is not impossible, Mr Lord, that

4 I will simply defer this until I have considered the

5 rest of the matter and either require further evidence

6 from Popov or Steadman in due course.

7 Where I am at the moment is I think that whilst the

8 severability of the matter is not perfect, it may be the

9 least bad course.

10 MR LORD: Well, I would wish to be able to persuade

11 your Lordship of a different course.

12 MR JUSTICE HILDYARD: Yes.

13 MR LORD: And although obviously I won’t try and do that

14 now, it is worth your Lordship seeing that permission

15 that was given.

16 MR JUSTICE HILDYARD: Well, I wasn’t allowed — I think we

17 are strongly recommended not to permit expert evidence

18 unless it is considered necessary for the purposes of

19 disposing of the proceedings, and that hurdle was

20 accomplished implicitly. There’s no doubt about that.

21 MR LORD: Sorry, my Lord, I was on, if I may say so,

22 a slightly different point.

23 MR JUSTICE HILDYARD: Yes.

24 MR LORD: I won’t argue it in Mr Stroilov’s absence, but

25 just for your Lordship’s consideration, if I may be so

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1 bold. If we could have {J1/3/1}, which were the

2 directions that your Lordship gave that encompassed,

3 amongst other things, the fields of expert evidence, if

4 we go to {J1/3/2}, «separate experts» is the rubric.

5 Your Lordship can see what is ordered in paragraph 10 in

6 this order for directions as to valuation:

7 «Each party has permission to adduce oral expert

8 evidence in the field of … (d) valuation.

9 «Limited to one expert on each side in each

10 field (save that the Defendants and Part 20 Claimant may

11 together rely on two experts in the field of Russian law

12 and each side may rely on two experts in the field of

13 valuation).»

14 MR JUSTICE HILDYARD: I agree it doesn’t say the one on

15 property valuation and the other on business valuation,

16 but I think that that might have been implicit.

17 MR LORD: Well, my Lord, that will be one of the points that

18 I will be making submissions on because, put very

19 shortly, whilst of course it is open to the defendants

20 to say they want to effectively collapse a number of

21 aspects of expert valuation evidence into Ms Simonova,

22 it doesn’t follow that the same collapse should be

23 visited upon the other party in terms of the expert

24 evidence that it has adduced. I am not going to argue

25 it, but I wanted to — if I could draw that point to

1 Delphic, but I do not wish to prejudge.

2 MR LORD: No.

3 MR JUSTICE HILDYARD: Mr Milner, you having achieved this

4 remarkable feat of bringing the ship home not only on

5 time, but early, you now disappear with that triumph

6 pocketed.

7 MR MILNER: I do. I cannot say whether I will be back or

8 not, I have absolutely no idea, but certainly I have

9 no — so far as I know I am not going to be, but of

10 course, one never knows what will happen in this case

11 above all cases. But it has been a pleasure to be

12 involved again, albeit in a cameo role, if I may say so.

13 MR JUSTICE HILDYARD: Well, I’m very grateful to you and

14 your instructing solicitors for the lightning

15 appearance.

16 Yes, Mr Birt.

17 MR BIRT: My Lord, with your Lordship’s leave, can I just

18 give your Lordship two references relating to Russian

19 law. Since we have some time I didn’t want not to say

20 anything.

21 MR JUSTICE HILDYARD: Yes.

22 MR BIRT: My Lord, the other day when we were talking about

23 the Russian lawyers, my Lord asked a couple of

24 questions, whether the points were covered by the

25 reports or not. There was a reference I should have had

185 187
1 your attention, because I am not sure that that point 1 to hand but I didn’t. It arose, I think, during the
2 perhaps has featured so much so far. 2 cross-examination of Ms Mironova, and your Lordship was
3 MR JUSTICE HILDYARD: No. I will read that with care, but 3 interested in whether the director general of a Russian
4 I won’t — I will try and keep my mind clear also for 4 company has authority to act on its behalf without
5 anything Mr Stroilov wishes to say. 5 a separate power of attorney, and that is actually
6 MR LORD: Yes. 6 a point covered in the current report. It arose in
7 MR JUSTICE HILDYARD: My response, really, was to your 7 a different context, but my Lord it is general ground
8 question: are you going to rule on this on Thursday, to 8 between the experts that a general director does not
9 which my answer was: possibly not, because possibly my 9 require a power of attorney to bind his or her company,
10 answer will be that I will wish to complete the case in 10 and my Lord will find that in Dr Gladyshev’s main report
11 all aspects, subject only to argument, and then even 11 at paragraph 127, and that’s at {E4/14/26}.
12 after argument I may or may not determine that there 12 MR JUSTICE HILDYARD: Thank you.
13 should be provision made for cross-examination of 13 MR BIRT: And Professor Maggs, in his supplemental report,
14 Mr Popov and some arrangements with respect to 14 had a look at that and agreed at paragraph 76. That’s
15 Mr Steadman. 15 {E4/13/19}.
16 MR LORD: Very well, my Lord. 16 My Lord also raised the issue of spousal consents,
17 MR JUSTICE HILDYARD: But it does, in part, depend, as 17 and we had a short exchange about that not actually
18 Mr Stroilov and you have both indicated, in part, 18 being an issue taken by the defendants, as it is not,
19 amongst other things, on whether that aspect of 19 but I understand the position to be, and I am obviously
20 valuation evidence goes only to quantum or only 20 not giving evidence of Russian law, it is really for
21 substantially to quantum, and on causation arguments, 21 your Lordship’s interest at this stage, and it probably
22 which are not altogether clear, having regard in 22 doesn’t need to go much further, but there was some
23 particular to Mr Bromley-Martin’s evidence. 23 un-clarity, shall we say, on Russian law for a period of
24 MR LORD: Yes, my Lord. 24 time whether a spousal consent was or was not required,
25 MR JUSTICE HILDYARD: All right. So I’m sorry to be 25 but this was finally settled in authoritative guidance
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1 given by the Supreme Court of the Russian Federation

2 in November 2013.

3 So that cleared up what may have been a matter of

4 uncertainty beforehand. So in a sense that may explain

5 why some rules or regulations provide for one as

6 a matter of practice, but it may also explain why the

7 defence hasn’t been taken, because it wouldn’t be a good

8 one in Russian law, my Lord.

9 As I say, that’s not in the reports, it’s not in

10 evidence, I am not trying to say either way, I just

11 thought your Lordship might like to know that that is

12 our understanding of the position. Certainly at the

13 moment it’s not in the reports and it’s not a pleaded

14 issue, so I don’t think there is any plan for that to be

15 further taken on board.

16 MR JUSTICE HILDYARD: Thank you.

17 MR BIRT: As to the logistics of Russian law evidence.

18 My Lord, it may be that my Lord is considering coming

19 back to this on Thursday. We simply raise as a matter,

20 again, of whether we should keep the experts ready for

21 next week, if your Lordship thinks that is a realistic

22 prospect, or whether one should now cut that loose.

23 I think we previously talked of the first week

24 in May, which is a week with a bank holiday Monday, but

25 it would be 3, 4 and 5 May. Certainly I understand that

1 I told my Lord I would give you an update on what

2 I thought the time estimate would be for those experts.

3 I have to say, it’s the sort of thing that if

4 your Lordship told me and told my opponent on the other

5 side: you have a day each, make it work, it could be

6 done, and certain points could be not followed up or not

7 put very fully. I think if I was told I should go

8 through all the main points in the normal way, I do

9 think we would be at risk of going over a day, my Lord.

10 MR JUSTICE HILDYARD: That’s a helpful indication.

11 MR BIRT: I think that is the fairest way I can put it.

12 MR JUSTICE HILDYARD: I mean, there are some complexities

13 which would take the English courts in an English

14 context quite a long time to figure out, for example, on

15 reflective loss and that kind of thing.

16 MR BIRT: My Lord, yes, and every practitioner in this court

17 knows that you don’t know how quickly these things are

18 going to go until you start to get the feel of

19 the particular expert as well.

20 I would simply suggest, my Lord, if we were doing it

21 next week, we should be starting on the Wednesday, not

22 on the Thursday, particularly coming up to the weekend

23 and then my Lord having another commitment the following

24 week.

25 MR JUSTICE HILDYARD: That’s definitely worth consideration.

189 191

1 Professor Maggs is available that week, and I can

2 confirm I am, my Lord. I think Mr Stroilov said he was.

3 I can’t remember if he had a specific confirmation about

4 Dr Gladyshev, but Mr Stroilov certainly didn’t raise

5 a problem.

6 Whether my Lord wants to grasp that now, to give

7 some certainty —

8 MR JUSTICE HILDYARD: I think I would be wary of doing so

9 without express confirmation from Mr Stroilov, but

10 that’s the way it looks to me it is going.

11 MR BIRT: My Lord, yes. Mr Stroilov will no doubt read the

12 transcript. It is simply for planning and if

13 Professor Maggs was going to be giving evidence he would

14 no doubt be flying in — not tomorrow —

15 MR JUSTICE HILDYARD: He is based in the United States, is

16 he?

17 MR BIRT: He is. I don’t know where he is this week, he may

18 or may not be inside or outside the United States but in

19 terms of people’s —

20 MR JUSTICE HILDYARD: Perhaps he could be warned that the

21 likelihood at present is that it be moved, but whether

22 it be moved to the 3rd, 4th and 5th rather depends on

23 whether Mr Gladyshev’s other obligations are being

24 complete and whether he can turn up.

25 MR BIRT: My Lord, fully understood.

1 Of course it may also, if other things are equal in

2 terms of availability, be another point in favour of

3 somewhere like the 3rd, 4th and 5th, where there is

4 a little leeway and Mr Stroilov is given a little bit

5 more preparation time, or whoever it is who is

6 cross-examining on those quite awkward issues.

7 MR BIRT: My Lord, yes, that occurred to us as well.

8 MR JUSTICE HILDYARD: Yes. Thank you, that is very helpful.

9 MR BIRT: My Lord, I think it simply remains for me to ask

10 you what time you would like us to turn up on Thursday.

11 MR JUSTICE HILDYARD: This is Ms Goncharuk/Yatvetsky on

12 Thursday?

13 MR BIRT: My Lord, that is all we have, unless my Lord

14 wanted to start any earlier to have any continuation of

15 the current discussion. Otherwise it is Ms Yatvetsky,

16 for Mr Stroilov’s time estimate.

17 MR JUSTICE HILDYARD: Yes, well you are quite right about

18 the discussion. What I am going to do is I am going to

19 mark it not before 9.45 am on Thursday, with this in

20 mind: that we sweep up any outstanding queries that

21 I have and any points that either of you have with

22 respect to the Popov/Steadman immediate query, and then

23 move onto Ms Yatvetsky at 10.30. If no one wants to do

24 it on Thursday, or if I feel I cannot do it on Thursday,

25 then either you or I will let each other know and we

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1 will go back to the 10.30. So it will be not before

2 9.45 am.

3 Someone was going to tell me whether, and if so

4 where, any documents which reveal the present activities

5 and success or failures of Western Terminal and any

6 other enterprises are in order that I can just have

7 a better view as to what has occurred. That may have

8 slipped the net, but if and when …

9 MR BIRT: My Lord, that’s probably on the list. I am afraid

10 I haven’t got the references to hand now. I don’t know

11 whether those are in the disclosure. They have been

12 operated by parties who aren’t parties to

13 the litigation, my Lord, but if there are documents,

14 we will either find you the references or we’ll let you

15 know that there aren’t any, my Lord.

16 MR JUSTICE HILDYARD: Right.

17 MR BIRT: My Lord, work is in progress as we speak. There

18 may be something later.

19 MR LORD: My Lord, I think there are Western Terminal

20 accounts for 2011, 2012 and 2013 at {D142/2386.2/1},

21 {D142/2386.3/1}. Whether those meet the bill … It

22 looks as if these are off the SPARK database, my Lord.

23 MR JUSTICE HILDYARD: Yes. That’s very helpful, thanks.

24 I will have a look at those.

25 MR LORD: I’m not sure whether that is enough for

1 INDEX
2 PAGE
3 MS LUDMILA SIMONOVA (Continued) ………………… 1
4 Cross-examination by MR LORD (Continued) ……1
5 Questions by MR JUSTICE HILDYARD …………. 37
6 Further cross-examination by MR LORD ……… 43
7 MR TIMOTHY JOHN MILLARD (Affirmed) ……………… 46
8 Examination-in-chief by MR LORD ………….. 46
9 Cross-examination by MR MILNER …………… 48
10 Re-examination by MR LORD ………………. 163
11 Questions by MR JUSTICE HILDYARD ………… 168
12 Housekeeping ………………………………… 178
13

14

15

16

17

18

19

20

21

22

23

24

25

193 195

1 your Lordship’s purposes. If there are other documents

2 we will obviously try to track them down, but that is

3 the best my learned junior has helpfully been able to

4 track down so far.

5 MR JUSTICE HILDYARD: That’s very helpful. Will you some

6 time also be thinking when, if we move to the 3rd, 4th,

7 5th, when we would be doing the oral closings?

8 MR LORD: Yes, my Lord, we will give that some thought.

9 MR JUSTICE HILDYARD: There is a vacation which begins on

10 something like 28 May. I should disclose that I am away

11 for the first two days after that vacation, so I think

12 I return on something like 9 June; is that right?

13 I return on the Thursday. It’s just for your future

14 planning and also because I know, in particular, you and

15 possibly others, Mr Lord, have other matters.

16 MR LORD: Thank you, my Lord.

17 MR JUSTICE HILDYARD: All right, thank you very much. Thank

18 you again, Mr Milner.

19 (3.53 pm)

20 (The court adjourned until 9.45 am on

21 Thursday, 14 April 2016)

22

23

24

25

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April 12, 2016 Day 37

A

ability (5) 57:1 93:10 93:11 106:10 173:23

able (22) 20:1 35:11 43:15 92:14,16 108:3 126:11 129:9 132:18 134:21 136:11,12,14 141:11,13 146:20 149:10 160:20 178:21 180:4 184:10 194:3

absence (3) 167:4

178:13 184:24 absolutely (4) 13:18

33:8 36:14 187:8 abstract (1) 61:6 accept (18) 32:20,22

38:24 44:22 75:5 85:4 92:24 98:16 101:9 113:19 117:7 118:15 119:11 125:24,25 126:5,8 127:20

acceptable (2) 108:10

124:10

accepted (7) 10:18,19 78:17 115:3,8 142:23 181:2

accepting (4) 106:4

129:23 130:2 181:24
access (49) 31:2 66:23 66:25 74:22 76:20 79:6,7,11 83:9,11 84:8,18 86:1,2 90:22 92:17,17 113:13 114:21 115:4,12,21 116:3 116:4,25 117:14 131:16,20 132:13 132:14,23 133:19 134:17,20,24 135:11 156:19 165:20,21 166:18 166:20 167:5,13,15 168:3 169:23 170:2 170:13 176:10

accessing (1) 134:11 accommodate (1)

86:13 accommodation (1)

160:7

accomplished (1)

184:20 accord (1) 155:3

account (15) 35:18 92:4 94:19 121:23 122:10 125:3,10 129:21 137:25 138:2 139:8 159:6 160:16 170:23 172:24

accountancy (1)

142:17 accounted (1) 138:16 accounting (2) 142:21

172:12

accounts (1) 193:20 accuracy (1) 6:23 accurate (9) 16:23

74:10 77:3,7 78:14 78:18,20 123:25 143:19

accurately (1) 6:10 accused (1) 50:16 achievable (1) 142:3

achieve (2) 132:1 advertisement (3) 2:8 America (1) 21:24 applies (3) 31:6 49:5 argued (1) 31:3 assumes (4) 102:4,20
157:17 2:17 3:17 American (1) 103:2 136:3 argument (3) 174:4 140:21 141:6
achieved (2) 182:4 advertising (4) 3:11 amortisation (1) apply (19) 17:6 31:3 186:11,12 assuming (9) 12:25
187:3 3:14 11:7 31:8 96:20 52:15 55:3 67:2 arguments (3) 154:16 15:6 20:25 63:25
achieving (1) 151:12 advice (1) 148:21 amount (13) 14:4 73:3 76:22 77:24 178:19 186:21 77:4 133:25 141:7
acquiring (2) 7:18 advisable (2) 77:6,8 86:18 91:20 99:20 78:9 89:20 90:10 Arkhangelsky (5) 1:13 170:7 182:10
156:14 advise (2) 46:18 102:11 103:20 101:25 114:23 3:7,8 50:16 148:11 assumption (9) 15:4,4
act (2) 145:20 188:4 148:20 123:23 133:7 137:5 116:1 123:24,25 Arkhangelsky’s (3) 1:9 97:8 102:21 117:21
acting (1) 81:6 advising (2) 49:22 139:9,16 163:10 136:15 154:16 1:20 4:17 141:25 158:18
activities (2) 50:7 142:6 174:7 160:9 arm (1) 151:17 159:19,21
193:4 advisory (1) 46:16 analogous (1) 69:25 applying (11) 52:9 arm’s (3) 51:19 62:3 assumptions (9) 21:11
activity (8) 40:22,23 advocated (1) 180:15 analogy (1) 118:3 73:2 78:11 81:6 65:7 40:9 97:11 99:6
40:25 70:15,17,18 affect (6) 62:2 70:4 analyse (1) 36:11 85:7 90:1 91:22,23 arose (2) 188:1,6 100:19,21 117:8
71:10,13 97:19 130:4 135:15 analysed (1) 12:10 118:7 160:13,15 arrangements (1) 130:3 177:14
actual (7) 25:11 89:22 174:16 analysing (1) 54:25 apportion (1) 53:3 186:14 asterisk (1) 119:10
93:1 111:24 145:5 Affirmed (2) 46:6 analysis (10) 26:15 apportionment (3) arrive (2) 54:14 attached (1) 54:21
145:6 167:14 195:7 27:1 87:13 89:10 60:10 95:4 117:10 118:14 attaches (2) 60:10,11
ad (3) 3:17 4:5 33:14 afraid (1) 193:9 97:17 99:14 129:24 appraisal (2) 11:5 arrived (1) 89:18 attaching (1) 50:20
adaptation (1) 68:1 afternoon (1) 182:4 131:24 132:18 35:25 arriving (1) 65:6 attend (1) 181:10
adapted (9) 58:12 agencies (2) 3:22 31:8 170:6 appraise (1) 39:18 artificial (2) 117:15,18 attention (2) 2:1
59:15 65:10 67:17 agencies’ (1) 4:10 analytic (1) 11:13 appraiser (2) 25:25 aside (2) 59:21 162:11 186:1
67:21,24 68:2 agency (1) 5:23 Andrey (1) 7:17 26:10 asked (12) 1:18 2:19 attic (2) 29:25 30:13
112:17 114:2 ago (2) 84:22 115:13 angle (1) 109:1 appraisers (1) 31:13 19:14 38:4 118:1,4 attorney (2) 188:5,9
adapting (1) 99:22 agree (39) 10:20 answer (27) 18:8 appraising (3) 12:7 127:7 142:21 attracted (1) 50:12
add (5) 33:5 55:4 13:20 16:2,16 38:10,21,22 42:13 26:11 39:13 148:20 164:15 attractive (2) 130:16
75:22 104:17,23 29:15 33:8,18 42:21 43:4,7,25 appreciably (1) 144:6 166:25 187:23 146:7
added (9) 24:5,19 34:23 38:5 39:7,12 44:8,13 65:8 66:17 appreciate (6) 80:19 asking (12) 1:24 19:24 attributable (1) 82:12
54:20 77:21 106:24 40:1 49:4 55:19 89:20 92:25 98:10 108:19 118:20 26:1 27:14 37:1,11 attributed (1) 120:9
107:3 136:19,20 56:8 59:21 63:7 116:16,20 150:17 142:4 145:14 44:18 54:15 79:9 auditors (2) 142:18,23
138:14 66:21,22 68:18 164:25 176:18 150:21 156:9 170:16 Australia (1) 102:11
addition (3) 104:4 70:2 71:2 73:19 177:2,4,16 180:20 approach (63) 11:24 181:15 authorise (1) 109:10
134:20 161:6 75:10,13 77:2,16 186:9,10 11:25 12:1,2,8,18 aspect (1) 186:19 authoritative (1)
additional (7) 42:25 78:4,24 102:8 answered (3) 39:12 12:19,23 17:13,18 aspects (2) 185:21 188:25
126:24 159:6,25 103:10 113:25 39:21 90:4 17:19,20 18:1,17 186:11 authorities (9) 18:22
160:2,4,21 119:15 123:9,12 answers (5) 40:18 18:17 29:16,17 asserted (1) 182:24 18:25 20:8 35:24
additionally (1) 130:20 141:22 44:21 78:13 124:15 51:24,24,24,25 assessed (1) 120:6 149:1,12 150:17
173:13 159:13 185:14 158:3 52:5,6,11,13,17,19 assessing (3) 39:10 153:20,24
address (7) 75:17 agreed (8) 10:7 34:22 anxious (1) 33:13 53:13,19,25 55:12 51:23 144:17 authority (9) 137:9
84:10,12,15 126:1 39:2 65:14 77:14 anybody (5) 7:21 67:9 55:13,22,23,25 assessment (2) 42:4 150:4,7 151:25
126:9,10 84:22 141:3 188:14 68:13,18 69:2 56:7,9,24 57:4 60:2 45:15 152:22 154:2,5
addressed (2) 120:20 agreement (17) anymore (1) 20:5 60:6,7 65:3 73:10 asset (31) 37:9 38:6 157:21 188:4
140:12 113:15,16 116:6,8 anyway (3) 71:24 73:14 76:24 85:5 39:2,4,25 40:3 availability (4) 88:21
addresses (2) 31:21 116:10,22 166:22 124:9 125:14 91:22,23 92:3 51:18 52:8 55:20 135:14 172:17
31:23 167:13,19,20,21,25 apart (5) 46:22 89:10 95:25 114:23 115:8 57:5 64:25 65:7 192:2
adduce (2) 180:22 168:2,11,15,21 105:2 110:19 118:13 121:3 66:10,25 69:14 available (15) 27:21
185:7 169:13 120:11 123:13 124:6,7,13 73:11 81:25 82:4 28:21 73:12,15
adduced (2) 181:23 agreements (1) 81:21 apartment (17) 4:2 124:16 129:16 82:15,20 94:2,16 98:2 123:24 124:6
185:24 agricultural (15) 4:23 25:15 29:10,19 146:11,14 94:21,25 95:6 129:4 143:1 156:20
adducing (1) 181:7 7:4 16:20 18:20 30:10,23 31:1,3,8 approaches (6) 12:4 96:15 143:2 146:9 169:9 179:16,20
adhere (1) 33:1 20:5 23:19 91:14 31:19 32:7 36:10 17:24 30:21 31:5 146:12 150:25 180:7 190:1
adjacent (2) 68:24 91:16 147:13,16 74:3 159:20 160:8 51:22 52:12 153:14 avenue (4) 31:25 32:1
100:10 150:20,24 153:11 161:13,19 appropriate (19) 12:2 assets (32) 34:8 40:12 32:2,3
adjourned (1) 194:20 154:14,24 apartments (7) 25:20 12:3,24 16:11 51:11,13 52:20,21 average (3) 16:20
Adjournment (1) agriculture (1) 19:2 36:11 74:4 125:6 17:20 29:16 52:9 52:22,24,25 53:2,2 54:8 144:24
122:22 ah (1) 34:23 158:24,25 160:23 55:22,23 57:7 53:3 54:3 73:12,15 avoid (3) 84:25
adjusted (1) 129:20 ahead (2) 180:11,20 apologies (2) 108:19 59:10 61:11 72:17 73:16,22,23 74:15 152:10 179:7
adjustment (11) 55:7 air (1) 87:13 123:6 72:21,24,25 79:6 78:23 81:14 82:24 aware (12) 49:20 50:5
74:14 76:16 77:25 airport (5) 42:9,10 apologise (3) 106:23 114:2 124:5 99:4 111:19 117:16 50:17 81:1 110:25
78:3,15,17 87:6,18 118:4,9 121:23 171:25 178:9 approval (1) 139:22 118:9 120:8,8,13 117:21,25 118:19
97:3 163:9 albeit (13) 81:2 83:13 apparent (2) 29:24 approved (1) 20:7 145:13 146:19 121:4,4 128:18
adjustments (5) 52:20 117:3 141:12 145:8 159:15 approximately (1) 176:20 152:19
73:24 74:6,9 105:9 145:23 152:15 appear (2) 126:21 140:1 assignment (1) 51:6 awkward (1) 192:6
administration (7) 160:4 162:15,19 180:7 April (2) 1:1 194:21 assist (2) 111:5,9
19:18,20 139:11 175:14,20 187:12 appearance (2) 2:22 arbitrarily (1) 25:4 assistance (5) 45:22 B
151:8,9 153:9 allocate (2) 13:21 14:4 187:15 architectural (1) 177:25 180:17 back (33) 8:22,24 9:12
154:20 allow (4) 14:20 80:18 appears (6) 6:23 148:14 182:19 183:2
9:13,22 15:13
administrative (2) 132:22 133:13 29:23 108:14 area (23) 61:8,25 associated (2) 170:8
16:19 20:10 59:22
92:15,16 allowed (7) 81:13 109:10 159:14 65:12,12 66:5 172:18
60:2,16 62:7 66:12
admonished (1) 129:13 131:15 180:11 70:12 82:16 91:1 assume (21) 10:24,25
80:15 87:2 89:21
145:10 136:17 138:3 appendix (5) 119:3,6 112:1 126:5 130:7 10:25 13:16 14:13
90:14 93:1 94:23
adopted (2) 53:25 140:17 184:16 120:1,2 126:24 130:9 148:12 15:11 16:4 21:9
109:18 111:21
114:22 allowing (3) 21:2,6,8 apple (1) 80:8 151:14,21,24 27:16 63:2 102:25
122:24 125:5 127:2
advantage (5) 41:4 allows (1) 168:2 apples (3) 80:6,8,8 155:22 157:20 114:14 116:24
140:13 144:4
128:9 142:5 145:14 alongside (1) 110:18 applicable (1) 124:21 159:17 162:18 117:2 129:18
145:10 146:2
179:21 alter (1) 11:5 application (2) 151:5 164:3 165:25 173:3 131:13 144:21
171:15 183:25
advantages (1) 175:23 alternative (1) 7:8 175:17 areas (2) 163:17 147:21 148:2
187:7 189:19 193:1
advert (1) 1:14 altogether (1) 186:22 applied (6) 55:8 81:23 173:11 155:25 163:3
background (1)
advertise (2) 3:23 4:3 amended (1) 119:2 114:9 115:9 116:1 argue (3) 174:12 assumed (4) 37:13
119:21
advertised (1) 82:1 amenities (1) 22:1 124:13 184:24 185:24 136:2 138:22 140:9

Opus 2 International transcripts@opus2.com
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197
April 12, 2016 Day 37

bad (1) 184:9 167:1 169:25 170:9 42:3 60:18 62:22 56:19 59:16 61:2 136:18 160:14 16:10,11 24:5 charge (2) 111:25

balance (2) 40:7,8 171:9 172:22 177:3 birds (1) 42:9 61:15 62:23,25 calculations (2) 25:6 34:24,24,25 35:1,2 129:9
ballpark (2) 83:22 believed (1) 124:21 Birt (15) 187:16,17,22 63:3 68:2 99:22 170:24 54:14,20 55:2,4,7 charged (1) 112:2
146:12 believes (1) 158:19 188:13 189:17 135:17 136:10 call (4) 46:5 91:8 67:2 75:18,19 charges (1) 137:16
bank (5) 76:4 143:15 beloved (1) 35:3 190:11,17,25 137:17 140:15 130:11 157:9 77:24 78:3,10 charging (1) 45:21
143:18 144:15 benchmark (5) 74:23 191:11,16 192:7,9 149:16 called (8) 128:20,21 79:17 80:17 81:4,7 cheap (1) 14:25
189:24 83:13 102:8 104:15 192:13 193:9,17 buildings (12) 24:23 130:12 139:21 81:13,25 83:12,19 cheaper (2) 76:1
banking (1) 22:8 107:16 Birt’s (1) 179:20 24:23,24 68:23 144:20 146:16 83:24 84:19 85:16 156:21
banks (2) 149:9,17 benchmarks (3) 84:1 bit (29) 7:14 27:11 111:19,21,25 112:3 176:2 182:16 85:20,23 87:8 check (16) 30:6,8
bar (8) 64:1,10,12,13 84:1 106:18 41:2 45:25 57:2 112:4,5,8,12 calling (1) 180:21 88:15,16 100:15 90:23,24 93:17
64:17,18,19,23 benefit (7) 108:20 71:3,4 80:19,21 built (10) 14:19 18:6 cameo (1) 187:12 106:24 108:7 94:14 96:24 99:11
bare (1) 68:23 113:15 133:2 92:9 106:2 109:2 20:22 21:10 22:1 capable (5) 40:24 41:4 115:11 116:1 100:2,4,12,18,25
bargain (1) 172:17 157:20 160:8 168:5 114:4 117:23 118:4 28:6 129:19 131:14 42:1,5 53:10 131:16 132:7,8,23 103:13,19 105:1
bargaining (5) 82:23 177:10 128:11 138:23 131:25 140:11 capacity (7) 61:24 133:8 135:1 136:19 China (1) 102:11
92:13,20 139:13 berth (55) 67:18,22 139:17 143:13 bureaucratic (1) 140:8 97:25 100:12 137:8 136:20,21,24 138:3 Chinese (1) 103:1
149:12 68:24,25 74:22 145:16 150:22 business (58) 38:8,17 156:24 157:2 138:4,5,10 142:9,9 choice (3) 75:6 76:12
bars (3) 58:10 63:24 85:2,6 86:1,2,5,8 156:3 165:10 39:3,3,4,6,17,18,25 163:23 142:11,22 143:5,15 94:5
64:3 86:10,23 88:9 89:4 166:12 170:5 40:4,22,23,25 41:7 capital (7) 52:9,16 143:17 144:16,25 choose (4) 22:5 76:12
base (7) 20:2 55:3,6 89:11 94:11 101:23 171:21 175:21 41:24 48:24 49:10 95:17 97:23 104:4 145:9 146:1,25 76:13 143:6
143:15 151:15,16 102:1,6,17,18 177:15 192:4 49:12,15,22 57:22 104:8,17 175:9 176:4 choosing (1) 177:9
152:18 103:5,7,8,9 104:23 bits (1) 183:25 57:24 58:19 60:11 capitalisation (4) central (4) 32:1 chose (3) 68:8 73:3
based (27) 46:21 51:4 106:14 107:5,6,9 blip (1) 109:1 60:14 61:3,5,5 63:6 52:14,16 56:17 160:24 161:3,8 81:24
61:22 80:1 84:1,23 107:14,15,17,21,23 block (5) 30:4 76:20 63:11,15,20 64:20 143:5 centrally (1) 161:10 chosen (1) 25:4
88:6,7 93:20,23 108:22,24,24 109:3 166:8,13 169:16 65:23 83:3 89:16 car (2) 116:9,18 centre (4) 23:16 143:2 circular (1) 176:2
94:1 95:18 100:22 109:3,5,12,19 blocks (1) 37:7 94:17,19,24 95:4,6 care (1) 186:3 153:25 161:22 circumstances (5)
105:22 114:24 110:2,15 123:2 blue (1) 162:7 95:15,17,19,21 careful (2) 38:14,25 certain (8) 37:8 58:8 32:19 52:2 87:4,10
119:22 137:5 168:4,24 169:3,24 board (1) 189:15 96:21 100:23 101:4 cargo (1) 68:4 70:6 79:23 99:20 180:14
139:23 142:11,13 170:3,18 171:4 boat (1) 109:15 117:11,17 119:20 carried (4) 12:20 61:4 100:17 109:11 CIS (2) 46:17 48:14
142:14,25 143:13 175:15 boats (6) 67:20 119:21 121:12 93:7 110:5 191:6 citizens (1) 16:7
145:5,17 159:19 berthing (3) 110:11 108:14,22 109:4,24 149:6 161:5 167:12 carry (8) 20:1 23:16 certainly (22) 49:9,21 city (12) 12:15 19:2,22
190:15 110:12,22 110:19 177:12 185:15 38:6 50:1 66:23 57:4 60:15 64:4 36:6 86:2 149:9
baseline (1) 175:13 berths (34) 54:21 55:4 bob (1) 17:15 businesses (1) 50:2 67:5 111:6 148:16 92:13 97:13 101:14 151:18,21 152:16
basement (1) 22:15 66:13,18,20,22 bold (2) 27:18 185:1 businessman (2) carrying (2) 23:12,14 102:9 103:11 154:22 165:13
basically (6) 14:25 84:18 94:6,8 99:22 bond (2) 98:4 143:12 148:24 149:3 cars (5) 112:14,19 115:24 138:24 176:10
19:1 81:18 93:9 100:11 101:20,22 bonds (1) 16:17 businessmen (1) 167:10,14 171:4 146:4,22 147:7,24 claim (11) 118:21
168:6 176:2 102:5,21 103:8,16 boon (1) 151:20 149:7 case (75) 1:11,22 157:17 170:1 187:8 119:4,13,21,22,22
basing (1) 56:25 103:21 104:12,21 border (1) 162:4 buy (24) 10:24 21:7 10:23 12:12,13 189:12,25 190:4 120:4,12,15 121:5
basis (48) 40:4 49:16 104:22 105:21,25 borders (1) 130:17 21:24 22:15 26:9 16:18 28:15 33:20 certainty (6) 112:20 121:10
49:23 53:4,9 56:3,5 107:3,12,19 108:14 borrowing (1) 95:16 40:11,12 67:13 33:25 35:22 39:16 112:23 182:11,23 Claimant (1) 185:10
56:5,15,16,17,18 108:17 109:11 bottom (6) 3:25 12:21 68:19 76:1 78:22 39:17 41:17 43:11 183:14 190:7 claimed (1) 120:6
56:23 58:9 59:11 165:22 169:9,10 148:10 161:3 79:16 94:5,7,11 48:4 50:12,21 51:1 certificate (1) 9:20 claims (1) 119:25
60:5 61:20,21 171:3,13 165:12,16 99:16,18 102:16 52:5 61:16 63:10 chaired (1) 19:19 clarity (1) 180:9
62:12,15 63:13,17 best (37) 12:9,11 bought (4) 56:23,25 137:8 143:2 145:19 63:15,22 64:10 challenge (1) 180:25 classed (1) 7:4
66:9 72:17,18,21 21:21 40:23 41:20 58:8 81:25 145:21 148:12 71:1 76:23 79:12 challenges (3) 49:9,12 classification (6) 91:18
72:22,24 73:4 42:7 43:21,24 branch (1) 128:21 173:19 81:24 86:22 87:8 73:2 139:20 141:19
78:13 84:16 93:10 44:13,15,19 45:6 break (4) 45:24 46:3 buyer (8) 22:4 51:18 89:17 90:8 92:14 challenging (1) 49:3 147:16 150:23
100:24 104:2 45:11,12 53:15,16 178:12 183:23 69:7 71:2 72:7 79:5 108:8 110:25 chance (1) 149:23 154:11
120:20,23 125:1 62:8 69:19 71:14 breaks (2) 89:3 111:1 173:18 176:21 111:12 112:21,22 Chandler’s (1) 84:10 classified (8) 4:23
132:21 142:16 71:16,19 72:2,5,11 bright (1) 66:5 buyers (7) 79:4,23 113:5,12,19,21 change (26) 18:19,24 69:11 91:15,19
143:4 144:14 72:15 89:23 93:3 bring (6) 13:22 23:8 81:3 82:22 83:14 114:10 117:7,9 19:23 24:11 83:20 134:17 141:9
145:11,20 146:24 97:20,22 111:11 28:8,9,10 29:1 144:14 173:18 118:10,21 122:7,12 87:18 89:1 91:15 147:13 150:20
147:12 154:4,8 123:9 141:4,23 bringing (1) 187:4 buying (17) 39:16,17 123:20,25 124:8,11 97:8,8,13 106:6,16 clause (1) 168:10
160:11 154:14 177:1,2 Brisbane (9) 83:2 56:21 67:9 68:18 132:24 138:17 130:1 139:20 Claygate (4) 75:16,20
beans (1) 63:12 194:3 93:18 101:19 102:8 69:2 75:3 78:23 139:12 141:8,11 150:23 151:2 152:1 75:22 76:2
bear (1) 164:17 better (13) 16:24 102:17 103:6,16 93:24 94:12 99:25 150:20 153:25 152:25 154:6,7,11 clear (21) 30:12 42:18
bearing (2) 103:11 48:10 64:11 128:6 104:7 105:22 103:1 114:18 143:8 157:5,6 159:14 154:23 155:7 51:16 55:19 58:21
158:13 143:9,17 148:12 Britain (1) 21:24 173:9,16,17 160:15 164:17 177:15,16 59:25 60:8 63:19
becoming (1) 19:1 162:21 175:16 broad (1) 103:12 buys (4) 65:16 68:11 169:21 172:22,23 changed (10) 87:18 66:18 76:4 83:15
beginning (4) 10:11 182:12,12 183:15 broader (2) 97:18 69:13 145:15 173:19 175:6 179:6 96:24 123:16 148:21 153:13
22:10,13 82:5 193:7 112:1 181:25 183:13 129:25 144:6 157:3,13 159:24
begins (1) 194:9 beware (1) 121:1 broadly (11) 51:21,22 C 186:10 187:10 149:20 150:22 169:23 173:22,22
behalf (2) 182:24 beyond (3) 91:3 52:1,12 83:18 C1/1/53 (2) 1:12 3:10 cases (3) 61:17 139:2 154:5 169:25 174:4 186:4,22
188:4 104:12 165:15 91:11 100:4 137:4 187:11 changes (8) 59:21 clearance (2) 169:5,7
cable (4) 23:13 28:8,9
behave (1) 40:11 bidders (1) 81:6 162:11 166:10 cash (27) 11:24 12:19 62:7 105:4,7,7,11 cleared (1) 189:3
28:10
beholden (2) 98:13 bidding (1) 81:5 175:12 17:18 44:17 52:7 105:12 144:7 clearly (24) 31:15
cadastral (6) 8:23 9:1
113:14 big (15) 11:17 24:22 broken (1) 85:1 52:13,14 56:16 changing (3) 62:19 34:20 56:6,19
9:4 10:3,16 36:24
believe (43) 50:14 24:23,23 25:14 Bromley-Martin’s (1) 65:4 72:18 73:3 97:9 147:15 60:18,23 61:1
cadastre (9) 9:6 10:3,7
69:12 80:3 82:7 40:1,1 66:13 68:8 186:23 93:7,13,14 97:7 channel (7) 130:17,23 62:16 63:1 73:14
30:22,25 31:4,5
87:15 88:10 90:4 68:14 79:1 90:20 Brothers (1) 80:25 104:9 105:3 123:12 130:23 131:1,7 76:23 79:11 102:8
34:20 37:14
90:18,24 91:21 152:11 165:18 budget (2) 75:3,25 123:15,21 124:2,14 135:18 136:6 106:3 109:24 117:7
calculate (3) 62:15
97:4 100:11 106:9 177:16 build (16) 15:3,5 21:5 128:16 143:14 characterise (2) 67:23 118:16 132:25
80:15 96:4
109:25 113:23 bigger (7) 24:11 81:23 26:12 68:8,14 144:11,14 146:21 74:18 138:17 171:10
calculated (4) 83:23
116:10,21 117:5,18 102:9,10 133:12 129:12 132:12 category (1) 20:4 characterised (2) 174:2 175:16
84:5 101:12 125:20
117:19 118:2,10,12 166:15 171:24 134:23 136:12 causal (1) 89:15 40:21 91:13 176:18,19
calculating (2) 85:3,6
123:20,23 124:4,25 biggest (1) 137:11 140:23,25 146:4 causation (1) 186:21 characteristic (3) client (1) 153:21
calculation (12) 12:21
141:1,11 145:10 bill (1) 193:21 149:9,11 152:3 cause (1) 11:3 40:20 42:19 58:10 clients (5) 26:2,8,12
13:4,14 14:10
147:14 149:24 billion (1) 101:21 building (22) 15:7 cautioning (1) 38:18 characteristics (5) 26:14 49:20
20:13 21:15,17
155:10 156:9 bind (1) 188:9 20:16,25 21:3 caveat (1) 120:22 40:16 71:25 83:8 climate (1) 48:25
26:16 27:2 132:7
159:18 163:4,8 bird (6) 41:3,23,25 26:12 30:3,9 56:13 cent (71) 13:1,8,21 86:5 88:18 close (18) 29:7 69:6

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

198

April 12, 2016 Day 37

83:7 106:23 114:24 16:6 40:13 46:23 concentrated (2) considered (9) 17:3 136:23 137:25
115:10 128:3 49:11,18 93:23,25 92:11,18 31:25 52:1 112:5,8 151:15 161:1 162:2
129:11,14 157:15 94:7,13,20 96:15 concept (4) 53:21 150:24 153:14 164:7 165:8 166:18
161:13 169:8 98:17 99:19,25 71:14,17 89:12 184:4,18 170:23 175:25
175:14,16,19 176:6 101:6 117:3 128:20 concepts (1) 95:13 considering (5) 26:11 176:8 177:9
176:9 177:4 145:11,15 146:16 concern (5) 52:4 39:20 66:17 69:2 correctly (7) 10:4 54:7
closer (6) 48:7 106:22 188:4,9 113:3,6,11 117:9 189:18 124:13 138:16
152:4,12 153:22 company’s (1) 7:17 concerned (3) 51:12 consist (1) 111:19 139:8 170:23
175:8 comparability (1) 117:1 121:11 consistent (1) 142:19 172:13
closest (1) 162:24 176:12 concerning (1) 20:3 constant (1) 86:3 correlation (4) 89:5
closing (1) 64:6 comparable (33) 12:6 concerns (1) 164:22 constructing (2) 90:5,9 103:13
closings (2) 184:2 16:21 35:12,18 conclude (2) 84:16 128:10 142:1 corruption (3) 49:13
194:7 52:19,21 54:3 56:2 155:7 construction (16) 49:15 50:17
coast (1) 90:18 72:22 73:23 74:15 concluded (1) 81:21 13:15 14:13 15:9 cost (36) 13:15,21
coastline (1) 130:14 75:7,11 76:11,15 conclusion (2) 12:11 19:11 22:12 123:10 14:2,4 23:2,5 24:20
code (3) 135:19,22 76:22 77:6,10,11 97:20 136:18 138:9,13,22 25:2 28:7 45:14,14
136:9 77:23,25 80:11 conclusions (1) 79:25 139:18,19,23 140:9 51:24,25 52:5
coffee (10) 62:23 63:4 84:7,23 89:11,23 concrete (1) 75:14 141:1 154:25 94:10 103:6 104:17
63:7,9,11,12,12,14 93:3,8 124:23,25 condition (5) 107:4,12 consultancy (1) 133:5 136:25 137:3,4,14
63:23 64:1 125:8,16 173:8 107:14,19,22 consulting (2) 46:18 137:17 138:9,10,12
coincidence (3) comparables (51) conditions (2) 69:10 49:21 138:13,18 139:9
169:10 170:17 12:5,6 16:24 17:1,3 174:16 consumers (1) 22:16 147:15 155:12,16
172:18 17:4,7,24 18:1,3,9 conduct (1) 13:4 contacts (1) 139:10 156:12,13 157:6
collapse (2) 185:20,22 18:10 31:18,20 conducted (2) 40:4 container (14) 43:14 172:25 175:23
colleagues (1) 177:1 32:2,8 35:1,4,20,20 102:12 43:17,19 44:10 costly (1) 156:15
collection (1) 53:6 35:21 36:2,4 56:22 confidence (2) 81:15 69:19,23 72:14 costs (15) 27:10 95:16
combine (1) 169:13 56:22 74:13 76:18 177:17 98:24 99:23 100:9 97:23 136:17,18,19
come (17) 49:14,17 77:2,4,4 85:17 93:9 configuration (1) 100:15 106:11 137:11,15,24 139:4
59:22 62:7 64:19 124:18,25 125:13 133:9 163:20 164:5 151:12 155:13
80:15 87:2 90:14 126:21,25 127:6,10 configure (1) 134:7 containers (1) 68:4 170:8,12 172:13
93:17 96:8 109:5 128:1,6 159:3 confirm (8) 47:7,12,14 content (4) 33:23 counsel (1) 82:21
146:23 160:20 160:18 161:25 47:17,23 48:1 111:6,12 115:21 count (1) 115:1
162:17 168:11 162:6,22,25 163:4 164:3 190:2 contention (1) 164:2 counted (1) 138:17
181:3,14 173:2,5 175:2 confirmation (3) context (3) 153:17 counter-sanctions (1)
comes (3) 91:4 165:14 compare (4) 8:18 152:22 190:3,9 188:7 191:14 174:6
174:19 10:16 94:24 96:18 confirmed (1) 115:16 continuation (1) counterclaim (1)
comfort (2) 83:22 compared (6) 34:9 confluence (1) 171:10 192:14 119:3
85:14 87:25 92:5 96:22 confused (2) 27:12 continue (4) 104:16 countries (1) 100:23
comfortable (3) 75:1 99:8 159:6 34:14 111:12 119:17,19 country (6) 64:4 88:24
78:11 83:13 compares (2) 35:16 congestion (2) 152:5 Continued (4) 1:7,8 91:10,11,13 152:11
coming (8) 134:20 126:17 152:9 195:3,4 couple (5) 29:7 105:4
154:9 165:12 comparing (7) 24:4 conjunction (1) 52:25 contradicted (1) 153:21 174:5
177:17 182:7 73:11 80:2 86:6 connect (4) 14:2 181:24 187:23
183:25 189:18 96:15 99:9 107:5 28:17 155:17 contrary (1) 181:22 course (14) 4:12 5:5
191:22 comparison (13) 156:17 contrasted (1) 58:17 20:6 25:5 28:17
command (2) 129:14 11:25 12:1 17:19 connected (7) 27:20 contrasting (1) 164:8 34:6 92:24 182:12
160:1 29:16 75:2 105:17 28:5,20 66:8 control (1) 140:22 184:6,9,11 185:19
commands (1) 84:18 123:22 124:6,12 156:10 169:19 controlled (2) 114:15 187:10 192:1
commended (1) 122:8 125:2 126:3,11 170:1 117:2 court (12) 63:4 64:11
commensurately (1) 164:12 connecting (2) 23:3 controls (1) 169:23 64:13,19 83:17
137:1 comparisons (1) 84:16 137:14 convenient (3) 111:3 121:4 182:1,3
comment (5) 4:8 5:10 compelling (2) 113:21 connection (5) 67:22 122:18 179:19 183:6 189:1 191:16
24:1 72:14 158:11 113:23 69:6 137:16,18 conventional (1) 194:20
commentary (3) 80:21 compensation (1) 145:18 111:13 courts (1) 191:13
128:11 156:7 121:11 connections (9) 92:15 converted (2) 45:14 cover (2) 32:15 158:1
comments (3) 87:3 competition (4) 11:16 137:4,18,20 139:14 64:23 covered (2) 187:24
90:14 129:17 86:18,24 90:20 140:3 156:13 157:4 converting (2) 35:22 188:6
commercial (7) 36:17 competitiveness (1) 157:22 52:8 crash (1) 80:24
36:18,21,23 37:15 140:7 conscious (2) 32:13 convinced (1) 33:15 create (2) 23:2 91:20
67:11 118:6 complementary (1) 183:23 copy (1) 171:23 creating (1) 64:19
commitment (2) 53:1 consent (7) 126:6 core (1) 69:10 crisis (3) 80:23 87:1
180:5 191:23 complete (3) 170:21 139:18 150:19 corner (6) 108:25 149:19
commitments (1) 186:10 190:24 151:11 154:11 134:21 165:12,16 critical (2) 147:9
179:17 completed (1) 105:24 155:6 188:24 166:10,12 149:11
common (9) 21:23 completely (5) 13:2,7 consents (1) 188:16 correct (55) 19:12 criticise (1) 119:12
22:3,5 26:10 31:10 71:16 79:20 98:5 conservative (4) 15:4 23:25 36:14 45:15 criticised (1) 121:7
31:12 59:6 82:6 complex (7) 42:2 53:2 21:12,13 139:1 51:25 52:23 53:19 criticism (5) 13:13
151:5 117:16 120:8,9 consider (8) 25:20 54:19 55:13,18 121:8,10,15 129:20
commonly (1) 56:15 138:24 177:7 35:17 44:17 57:11 56:11 64:15,24 criticisms (2) 12:20
communities (1) 25:1 complexities (2) 171:5 95:16 118:1 148:17 67:1 68:5 69:9 20:11
community (1) 27:25 191:12 150:19 71:11,23 73:17 cross-examination (…
commute (1) 22:24 complexity (1) 177:5 considerable (3) 49:7 74:2,8,12 78:25 1:8 43:2 48:12
commuter (1) 23:5 comprise (4) 48:2 101:11 139:16 79:19 86:19,22 120:16 179:23
commuting (1) 12:15 112:13 118:9 considerably (1) 139:2 90:15 100:5 104:3 180:23 181:1,18
companies (4) 144:24 167:25 consideration (11) 107:2 111:23 115:6 186:13 188:2 195:4
145:3,4,7 comprised (3) 30:7 4:13 12:9,17 20:17 115:7,19 120:4 195:6,9
companies’ (1) 11:17 36:8 37:9 35:5 40:8 42:11 123:7,20 124:8,21 cross-examine (2)
company (28) 4:6,22 comprises (1) 37:6 44:16 104:10 131:18 132:12 120:25 180:18
5:13,20 7:2 11:6 conceivably (1) 80:7 184:25 191:25 134:10 135:20 cross-examined (3)

121:2 180:24 181:14

cross-examining (2)

180:12 192:6 crude (1) 76:8 cubic (3) 25:2 137:7

138:13 cultural (1) 161:7 currency (1) 144:10

current (13) 2:14 44:8 44:14 52:15 57:3 72:3 94:8 104:3 138:1 167:11,12 188:6 192:15

currently (3) 44:10 62:10 128:12

cut (2) 72:10 189:22

D

d (1) 185:8

D142/2386.2/1 (1)

193:20

D142/2386.3/1 (1)

193:21

D174/2906 (1) 1:16

D174/2906/10 (2)

2:24 5:11

D174/2906/11 (1) 8:2

D174/2906/12 (1)

8:14

D174/2906/15 (1)

9:15

D174/2906/17 (1)

10:10

D174/2906/18 (1)

10:15

D174/2906/5.1 (4)

1:19 2:3 4:20 5:9

D174/2906/5.2 (1) 8:1

D174/2906/5.3 (2)

8:14,25

D174/2906/5.6 (1)

9:14

D174/2906/5.8 (1)

10:10

D174/2906/5.9 (3)

8:20 9:13 10:14

D174/2906/6 (1) 2:23

D27/463.1/0.1 (1)

167:20

D27/463.1/0.3 (1)

168:9

dacha (3) 19:18 150:5 150:8

dachas (1) 12:13 daily (1) 145:20 damage (1) 30:16 damages (2) 120:12

120:15

dare (1) 122:13 dashes (1) 10:8 data (8) 18:4,5 24:15

93:20 126:13 144:20,23 145:5
database (1) 193:22 date (18) 2:17,18 3:16

3:17 47:13,18 54:10 80:21 127:4 127:7 128:15 140:14 143:22 168:11 169:24 180:4 183:12,16

dated (3) 47:11,16 150:21

dates (2) 179:7 180:3 day (16) 14:13,22

64:13,17 111:1 138:22 141:1 163:6

163:11 171:3,4 178:7 180:6 187:22 191:5,9

day-to-day (2) 49:16 49:23

Day35/61:1 (1) 38:3 days (2) 33:25 194:11 DCF (9) 13:14 18:17 20:12 26:16 27:2

124:7 142:20 170:11 177:6

DCFs (1) 98:10

deal (8) 17:12 22:25 29:11 68:1 113:18 114:13 145:23 181:3

dealing (4) 41:13 44:3 59:6 92:19

deals (1) 24:22 debate (4) 32:22

61:14 64:7 146:6

December (2) 143:25

144:3

decide (4) 21:25 53:1

182:15,17 decided (2) 18:23

183:22 decides (1) 64:10 deciding (1) 57:7 decision (5) 18:24

20:4 32:21 94:10 183:7

decisions (2) 149:6 154:7

decisive (1) 57:8 dedicated (1) 13:1 defeats (1) 137:11 defence (2) 119:2

189:7 defendants (5) 122:9

182:24 185:10,19 188:18

defer (2) 183:16 184:4 deferred (1) 180:2 deficient (1) 122:9 defined (1) 73:7 definitely (2) 4:12

191:25 definition (8) 57:13

57:15,20 62:17 64:9 68:7 72:2 73:20

degree (8) 66:4 81:15 82:22 83:21 85:14 92:20 112:20,23

delay (1) 179:18 delayed (1) 1:3 Delphic (1) 187:1 demand (4) 151:13,24

173:7,14

demonstrated (2)

42:19 134:2 demonstrates (1) 97:6 demonstration (1)

130:25

density (2) 12:22

134:12 deny (1) 130:7

department (3) 46:16 46:19,20

depend (5) 53:5 55:24 86:4,9 186:17

dependent (1) 182:20 depending (4) 134:16 135:25 138:19

174:24 depends (13) 77:11

79:14 87:4 88:18 88:19 91:8 94:22

Opus 2 International transcripts@opus2.com
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199
April 12, 2016 Day 37

103:7 133:9,11 58:18 59:19 61:9 distance (1) 13:23 E6/23/1 (1) 47:1 easier (3) 76:22 envisage (1) 27:22 63:24 82:25 88:14

173:25 174:25 61:10 64:25 65:23 distant (1) 157:22 E6/23/13 (1) 47:7 123:24 156:21 envisaged (1) 106:12 93:15
190:22 71:16 76:7 83:14 distinct (4) 79:20,23 E6/23/17 (1) 124:17 easily (5) 60:20 63:21 envisioned (1) 147:25 exceed (1) 13:5
depot (1) 169:8 95:18 96:16 97:14 79:24 81:3 E6/23/22 (1) 165:7 68:5 96:25 108:6 equal (6) 17:25 72:6 excellence (1) 60:12
depreciation (2) 95:16 98:5 102:24 109:15 distinction (1) 63:19 E6/23/23 (1) 165:6 easy (4) 90:22 141:12 94:4 152:2,3 192:1 exception (1) 142:24
96:19 112:1 113:9 118:11 distinguish (1) 38:7 E6/23/32 (1) 161:2 169:4 175:10 equally (7) 71:5 79:16 excess (1) 87:10
derived (2) 35:12 127:4,6 140:2,4 distributing (1) 28:25 E6/23/45 (1) 83:24 eat (1) 171:25 105:18,20 121:22 exchange (3) 2:15
145:16 142:21 149:17 distribution (1) E6/23/47 (1) 54:11 EBITDA (9) 40:3 93:20 154:16 174:17 143:23 188:17
derives (1) 18:11 153:20,20 154:9 133:20 E7/24/1 (1) 47:10 95:23 96:1,7,18,22 equates (2) 101:23 excuse (2) 6:19
described (4) 7:15 164:20 173:11,17 district (8) 8:11 19:17 E7/24/106 (1) 135:21 97:1 106:11 132:2 127:23
31:22 73:8 83:25 173:18 175:1 126:7 160:24 161:3 E7/24/12 (1) 138:7 economic (9) 87:1 equivalent (1) 8:21 execution (1) 168:12
description (3) 3:12 176:24 184:11,22 161:5 175:2,19 E7/24/15 (1) 23:19 169:11 170:17 erratic (2) 111:1 178:3 exegeses (1) 173:11
36:19 159:16 188:7 ditch (3) 130:18,20 E7/24/17 (4) 17:13 171:6,7 172:11,20 Esher (4) 75:16,17,21 exercise (3) 96:14,16
design (9) 15:8 20:15 difficult (26) 34:17 131:1 18:17 20:10 22:17 173:25 175:22 76:3 98:7
22:3 24:20,25 44:9 35:23 59:18 61:18 divergence (1) 103:14 E7/24/23 (3) 11:21 economies (1) 149:14 especially (3) 2:6 exhaustive (2) 58:25
44:23 139:24 70:7 72:1,3 86:23 diverse (1) 100:22 16:19 147:18 economy (6) 49:9 21:25 31:14 59:3
140:11 91:15,18 98:10 diversity (1) 99:4 E7/24/24 (3) 13:12 88:6 103:12 140:6 essential (1) 58:10 exhibit (1) 4:20
designation (2) 19:23 99:21 103:17 document (11) 9:11 15:13,22 140:7 149:18 essentially (5) 54:5 exhibited (3) 98:20
154:23 113:17 114:5 117:6 13:10 58:4 95:9 E7/24/27 (3) 29:13,22 edge (1) 81:21 88:1 139:17 143:16 135:22 163:25
designed (20) 41:9,15 151:1 153:15 98:20 100:7,8 30:18 educated (1) 160:19 155:2 exhibits (1) 3:9
41:16,19 43:9,13 154:12 157:6 109:9 110:9 119:7 E7/24/28 (1) 126:21 effect (9) 82:11 establish (2) 57:14 exist (1) 62:25
43:16,17 44:4,6,10 165:22 172:10 150:2 E7/24/29 (1) 31:17 105:13,14 106:19 136:11 existing (11) 27:13
57:22 58:11 59:15 173:2 176:18,19 documentary (1) 1:16 E7/24/3 (1) 47:12 107:11,18,25 108:3 established (8) 16:13 42:20 44:23 59:16
59:17 60:19 67:17 179:16 documents (7) 17:15 E7/24/31 (1) 161:24 168:11 70:23 75:24 76:6 60:13 62:20 94:8
67:18 112:13 114:1 difficulties (4) 73:2 100:17 109:10 E7/24/35 (1) 35:9 effectively (3) 30:3 87:15 88:9 135:25 94:13 157:11
desirability (1) 129:8 82:10 128:9 152:5 181:24 193:4,13 E7/24/51 (1) 126:24 36:9 185:20 183:16 159:20 167:2
desirable (2) 130:9,11 difficulty (3) 126:2 194:1 E7/24/7 (1) 123:19 either (11) 33:16 estate (16) 3:22 4:10 exists (2) 57:14 64:14
detail (3) 46:13 151:19 182:3 dog (2) 71:21,21 E7/24/88 (1) 95:8 73:15 99:22 106:2 5:23 11:17 25:10 exit (2) 62:14,15
122:25 180:1 dilapidated (1) 86:23 doing (29) 4:11 24:19 E7/24/9 (1) 132:10 127:23 165:21 25:12,14,19,23 expand (1) 56:12
details (2) 112:22 direct (14) 50:4,9,11 25:6,16 35:25 39:4 E7/24/96 (1) 58:6 184:5 189:10 31:8 34:8 73:18 expanded (1) 58:3
128:2 52:14 56:17 76:21 39:5 49:10,12,15 E7/25.1/10 (1) 98:21 192:21,25 193:14 76:12,14 119:4,10 expect (14) 22:9
determine (3) 39:14 79:10 113:13 72:19 84:25 93:8 E7/25.1/13 (1) 100:8 electric (1) 27:20 estimate (9) 54:1 51:18 67:12 69:8
182:2 186:12 114:21 115:12 95:21 100:3 106:13 E7/25.1/4 (1) 73:8 electrical (4) 13:25 97:21,22 108:3 72:6 91:25 95:5
devaluation (1) 150:16 155:13 132:8,17 134:4 E7/25/1 (1) 47:15 23:8 28:5,16 139:1,1 145:8 103:10,11 110:2
143:24 165:20 166:20 142:5 147:2,16 E7/25/14 (1) 96:5 electricity (11) 27:13 191:2 192:16 152:3 157:18,21
develop (9) 5:19 6:3 direction (1) 179:1 149:14 155:13 E7/25/15 (1) 96:6 27:17,18,23 28:4 Estonia (1) 99:2 181:1
14:23 26:12 44:24 directions (2) 185:2,6 170:5,6 190:8 E7/25/3 (1) 47:17 134:25 137:19,20 Europe (1) 174:7 expectation (1)
49:23 69:22 147:5 directly (1) 120:12 191:20 194:7 E8/26.1/29.1 (2) 137:22 157:1,2 evaluate (2) 34:18 180:10
149:10 director (3) 48:14 dollar (2) 56:4 144:3 150:1 153:18 elements (1) 112:19 42:11 expected (2) 52:8
developed (10) 20:7 188:3,8 dollars (1) 15:1 E8/26.1/30.1 (2) 19:7 elite (1) 130:13 evaluated (1) 34:21 72:17
30:14 132:25 dirty (1) 172:2 domestic (1) 11:18 154:19 emphasised (1) evaluation (1) 93:14 expecting (2) 100:14
144:15 147:11,22 disagree (13) 13:2,7 Domodoran (2) 16:14 E8/26.1/31 (1) 19:9 120:19 everybody (2) 4:11 144:12
148:2,4,18 149:2 13:16 16:4 23:8 144:21 E8/26/27 (1) 140:20 employees (2) 16:5,5 122:19 expenditure (1) 104:5
developer (5) 16:14 32:24 33:4 55:15 door (10) 14:1 23:10 E8/26/34 (2) 17:11 encompassed (1) evidence (41) 10:23 expensive (3) 94:12
20:1 22:3 139:6 80:13 90:12 124:8 28:10 64:19 76:20 27:15 185:2 38:4 44:12 45:1 141:22 157:23
153:21 142:4 158:13 125:15 141:10 E8/26/35 (1) 155:20 encourage (1) 157:9 46:15 93:3,22 94:1 experience (8) 25:13
developers (4) 49:22 disagreeing (1) 33:6 156:25 168:3 E8/26/36 (1) 156:4 encouraged (1) 120:12,14 122:24 25:17 46:14 51:3
139:12 142:6 153:5 disappear (1) 187:5 171:15 E8/26/37 (2) 27:17 157:16 123:23 124:6 66:6 142:7 153:16
developing (2) 12:14 disavowed (1) 119:5 double (3) 76:9 82:7 156:8 endeavour (2) 142:18 125:12 130:6 175:12
148:20 disclose (1) 194:10 138:17 E8/26/42 (1) 20:19 142:19 151:13 163:20,23 experienced (1) 139:6
development (37) disclosure (1) 193:11 doubt (3) 184:20 E8/26/48 (1) 9:3 ended (2) 177:12 164:22 169:6 180:2 experiences (1) 153:2
16:12 20:2 21:12 discount (25) 16:9,10 190:11,14 E8/26/55 (2) 14:15,17 178:2 180:22 181:7,11,22 expert (14) 32:14 48:3
27:24 46:18 50:1 16:15,16 24:2,4,7 doubting (1) 33:16 E8/26/57 (1) 29:12 endorse (1) 182:14 181:23,25,25 184:1 179:16 180:2,18
99:24 128:14 133:5 24:10 26:22 52:10 downs (1) 49:8 E8/26/58 (1) 159:9 England (2) 88:22 184:5,17 185:3,8 181:25 183:25
133:25 134:3,5,13 80:18 81:23 82:12 Dr (8) 1:9,13,20 3:7,8 E8/26/73 (1) 36:18 92:6 185:21,24 186:20 184:17 185:3,7,9
141:14,24 142:6 96:11,11 98:1,3 4:17 188:10 190:4 E8/27.3/31.1 (2) English (12) 2:7,13 186:23 188:20 185:21,23 191:19
143:7 144:12,18,24 106:1 135:17 142:8 draft (6) 43:5 44:2 109:7,18 5:12 6:6,10,16,22 189:10,17 190:13 expertise (1) 179:5
145:3,4,7,25 143:16 144:18,20 122:1 123:2 163:19 E8/27.3/31.2 (1) 6:23,25 11:9 exact (9) 5:21,25 6:1 experts (13) 97:24
146:24,25 148:8,13 144:25 145:6 167:17 109:14 191:13,13 9:6 10:6 36:1 126:3 106:9 179:4,4,10
148:15 149:23,24 discounted (19) 11:24 drainage (1) 137:21 E8/27/11 (1) 108:11 enormous (4) 87:20 142:10,14 179:19 180:16
152:13 153:11,12 12:19 17:17 52:13 draw (1) 185:25 E8/27/14 (1) 110:7 97:12 106:19 177:8 exactly (18) 5:14 7:24 185:4,11,12 188:8
153:25 157:3 54:13 56:16 65:4 drawback (1) 140:5 E8/29/1 (1) 47:22 enquiry (1) 150:16 14:4 42:23 45:16 189:20 191:2
158:11 73:2 77:20 93:7,13 drawing (2) 131:19 E8/29/5 (1) 47:22 ensure (2) 77:7 71:1 75:14,16,21 explain (7) 24:15
developments (1) 93:14 97:7 105:3 132:24 earlier (12) 60:17 179:18 76:2 83:20 95:1,23 30:20 31:2 45:2
137:12 123:12,15,21 124:2 drawings (1) 148:15 77:14 78:13,16 enterprises (1) 193:6 121:25 125:15 164:24 189:4,6
devoted (1) 136:24 124:14 drawn (2) 2:2 38:16 123:5 125:7 145:10 entire (1) 21:12 128:25 146:6 explained (13) 7:12
difference (25) 7:10 discounts (1) 81:7 dredged (1) 107:22 156:9 164:15 170:5 entirely (6) 40:19 175:11 16:13 17:23,25
29:18 32:17 33:14 discuss (1) 81:12 drive (1) 23:5 178:16 192:14 133:9,11 142:3 Examination-in-chie… 40:2,6 41:17 69:12
38:25 39:24 40:1,3 discussed (5) 38:10 driven (1) 137:4 early (2) 111:3 187:5 148:16 170:2 46:11 195:8 80:3 138:11 144:19
55:11 74:21 83:9 83:2 89:17 155:3 dropped (1) 174:14 earn (6) 64:21 69:17 entities (1) 93:16 example (22) 30:23 168:24 176:19
83:11 85:25 86:20 157:25 Dubai (1) 85:22 106:10 144:12,16 entitled (1) 120:24 41:1,2 60:17,24 explains (1) 95:12
88:9 94:16 95:2,6 discussing (2) 155:11 due (4) 18:12 24:17 170:7 entity (4) 53:8 93:25 62:21,22 64:1 explanation (1) 40:9
126:13 131:12 156:23 36:3 184:6 earned (1) 172:14 96:21 169:20 65:13 67:14 71:19 express (1) 190:9
144:8 158:7 163:10 discussion (3) 169:22 earning (5) 56:14,20 entrance (1) 165:16 74:3 75:14 79:17 expressed (1) 179:24
183:10,11 192:15,18 E 100:1 143:3 151:7 entrepreneurial (1) 83:4 86:8 88:20,23 expressly (1) 119:4
differences (1) 52:21 discussions (4) 50:19 E4/13/19 (1) 188:15 earnings (1) 96:19 60:12 121:20 125:6,13 extended (1) 107:24
different (45) 11:16 50:23,25 145:22 earns (1) 63:18 entries (1) 126:25 191:14 extension (2) 29:24
E4/14/26 (1) 188:11
16:17 30:21 31:5,6 disposing (1) 184:19 Earth (1) 157:15 entry (4) 2:2 9:18 14:9 examples (9) 50:5 30:7
E6/23.2/1 (1) 163:24
39:2 40:9 50:2,2 dispute (1) 112:24 easements (1) 156:14 84:3 58:9,21,23 59:6 extensively (1) 4:4

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

200

April 12, 2016 Day 37

extent (5) 65:21 79:23 93:8 95:15 125:4 extra (7) 67:5 106:13 106:14 110:22

112:3 145:16 160:6 extract (1) 135:21 extraordinarily (4)

61:18 91:14 98:11 158:10

Extraordinary (1)

178:2 extrapolate (3) 54:25

82:8,17 extremes (1) 61:8

F

face (1) 98:15 facet (1) 34:3 facie (1) 148:8 facilities (4) 79:22

89:7 160:18 169:4 facility (12) 66:13

67:11 72:12,15,16 76:19 78:22 79:13 108:22 112:13 169:8 172:20

fact (42) 16:17 23:11 31:14 36:22 41:24 54:21 56:17 65:12 68:11,18 69:13,15 72:20 74:22 84:8 85:25 89:10,21 90:1 93:22 105:21 107:11 110:15 114:1,24 115:22,24 116:25 118:7,8 120:7 122:3 123:3 125:8 143:14 156:25 158:22 160:4 169:15 179:21 181:22 183:1

factor (2) 133:23 169:6

factored (1) 20:13 factors (2) 73:21

94:20 failures (1) 193:5

fair (13) 31:23 48:25 55:10,14 57:5 59:5 66:5 96:2 119:11 154:18 160:3 161:23 163:7

fairest (1) 191:11 fairly (15) 76:5 78:25

79:2 86:24 88:12 92:11,18 102:15 104:23 107:23 131:24 132:18 133:17 173:21 183:23

faith (1) 117:23 fall (2) 114:7 117:4

familiar (7) 2:9 58:1,4 109:9 110:4 118:23 144:21

familiarity (1) 48:24 fancier (1) 41:25
far (17) 23:16 121:11 148:8 151:10 152:13 155:5,9 157:1 161:23 166:12 172:2 175:3 176:14 177:13 186:2 187:9 194:4

fashion (1) 149:6 fast (1) 78:8 faster (2) 21:10

158:22

fault (3) 37:5 48:8 116:13

favour (4) 151:25 172:20 179:18 192:2

favourably (1) 154:2 feasibility (1) 137:12 feasible (2) 22:19

41:12

feast (1) 183:15 feat (1) 187:4 featured (1) 186:2 features (6) 6:1 22:1

92:4 103:8 122:10 164:16

February (1) 47:1

Federation (4) 16:7

22:5 150:25 189:1 feel (8) 40:19 82:1

83:12 142:11 146:8 177:16 191:18 192:24

feeling (3) 33:14 179:24 182:22

feels (3) 146:11,14 147:3

fees (2) 151:7 170:7 feet (1) 137:7

felt (2) 176:24,25 field (4) 185:8,10,11

185:12

fields (2) 156:6 185:3 fiercely (1) 122:13 figure (13) 45:14

54:10,17 55:3,5,6 93:21 96:1,3,8 130:4 131:16 191:14

figures (4) 100:22 104:25 105:4 129:21

final (3) 22:16 40:14 139:25

finally (4) 34:22 54:24 158:24 188:25

financial (4) 80:23 82:10 138:18 149:19

Financially (1) 22:18 find (19) 10:6,9 11:14 11:15 12:5 14:16

16:24 24:15 33:15 34:19 47:2,3 70:7 100:7 103:17 148:22 172:9 188:10 193:14

finding (6) 17:1,5 98:9 116:14 151:18 176:21

finds (1) 18:9 finish (1) 103:25 finishing (1) 32:7 Finland (2) 98:25

152:6

fire (4) 131:22 132:15 133:21 134:15

firm (5) 49:2,6 50:19 50:25 179:25

firms (1) 50:6 first (43) 1:11 6:21

14:18 20:22 21:5 21:20 24:7 37:10 42:7 43:7 47:1,8,11 52:12 74:15 80:16 100:9,15 110:24 112:6 120:1 123:3 127:1 129:17 138:18 139:20,25

140:15 141:18 147:7 159:22 161:21 163:20 164:5,19 165:2,25 166:3 167:5,7 181:13 189:23 194:11

firstly (4) 113:8,12

142:15,24 fisheries (1) 141:9 fishing (15) 165:15 168:2,6 169:23

170:9,18 171:3,8,9 171:11 172:3,6,8 172:10,15

fit (2) 132:18 134:2 five (10) 21:14 79:13

109:3 121:8 123:3 140:10,18,23 143:8 165:25

five-star (2) 65:17 70:1

flat (5) 30:16 31:21 36:22 37:13 160:1

flawed (1) 90:3 fleshed (1) 7:13 flexibility (1) 58:13 floor (5) 31:9 37:10,10

159:22 160:2 floors (1) 19:13
flow (21) 11:24 12:19 17:18 44:17 52:13 56:16 65:4 73:3 93:7,13,14 97:7 105:3 123:12,15,22 124:2,14 143:14 144:11,14

flows (3) 52:7,14

72:18 fly (1) 118:8

flying (1) 190:14 focus (3) 41:22 44:20

174:11 follow (3) 103:22

164:21 185:22 followed (1) 191:6 following (2) 17:11

191:23

follows (3) 67:16

136:8,25 food (1) 174:8 foot (1) 35:13 footing (1) 120:25

footnote (1) 119:11 forbidden (1) 15:25 force (1) 168:12 Ford (1) 84:10 foreign (2) 11:18

15:24 forget (1) 45:4 forgive (2) 13:24

18:14

form (6) 59:8,14,16 109:4 154:10 159:12

formal (1) 154:10 formality (3) 141:15

141:17,17 format (1) 2:21 forthcoming (2)

151:11 155:6 forward (2) 104:25
105:3

found (4) 47:21 85:12 126:25 144:23 foundation (1) 21:22 four (10) 14:19 20:23

36:10,13 37:9 54:6 54:24 84:6 111:19

143:7 frankly (1) 33:21

fraud (2) 120:13,14 free (1) 32:14 Friday (1) 83:17

front (3) 94:23 133:17 134:22

frontage (1) 133:16 full (3) 140:24 159:15

176:22

fully (2) 190:25 191:7 function (1) 89:2 functioning (2) 117:16

137:22 fundamental (8)
19:21 55:11 89:9 147:4 150:7,18 152:23 154:21

fundamentally (2)

96:16 153:14 further (18) 7:14

13:13 32:23 43:2 47:15,18 107:17 114:4 130:14 158:15,20 166:16 175:21 180:1 184:5 188:22 189:15 195:6

future (6) 40:25 52:13 57:3 72:18 157:3 194:13

fuzzy (1) 57:2

G

gaining (1) 116:25 gas (9) 14:1 28:19,20
28:24,25 29:2 134:25 137:7,20

gases (1) 29:1 gate (1) 165:18

gated (2) 24:25 27:25 gauge (1) 125:10 Gazprom (7) 16:6

151:15,16,17,23

152:14,18

Gazprom’s (1) 152:19

Gazprom-involved (1)

16:5

general (15) 2:21 49:10 79:21 84:18 84:25 128:11 132:22 133:4,6 151:21 174:1,15 188:3,7,8

generally (7) 49:13 51:8 77:9 88:22 89:6 142:22 162:13

generate (4) 52:8 58:15 59:12 69:8

generates (1) 60:1 generic (7) 58:17

68:21,22,23 69:1 91:6,8

generous (6) 81:4 92:9,23 94:6 115:1 115:3

genesis (2) 6:24 118:23

geographically (1)

162:25 getting (7) 99:14

104:19 138:21 139:5,7 172:11 173:13

give (25) 5:25 6:1 23:20 26:14 36:15 41:7 46:13,15 62:21 66:23 67:6

75:14 98:9 125:21 126:1 127:3,7 146:25 158:2,8 165:4 187:18 190:6 191:1 194:8
given (20) 4:25 6:9 38:24 40:20 45:21 46:24 58:21 70:15 70:17 76:12 99:4 121:21 126:14 143:20 177:5 181:19 183:4 184:15 189:1 192:4

gives (9) 53:20 54:17 54:23 55:5 85:13 93:24 96:22 101:4 159:17

giving (3) 181:10 188:20 190:13

Gladyshev (1) 190:4

Gladyshev’s (2)

188:10 190:23 global (16) 80:23

93:18,19,21 95:25 96:7,22 98:17,20 99:5,9,18 101:10 105:18 145:11 149:18

globalised (1) 103:3 glossary (2) 57:18

73:9

go (76) 4:20 5:8 6:5 7:25,25 8:2,20,22 8:24 9:11,13 10:10 10:13 11:21 13:12 15:13 16:19 20:10 22:17 23:19 24:14 26:18 31:17 32:14 36:17 38:2 49:25 60:2,9,16 64:13 70:5 71:15 78:7 83:24 89:21 93:1 94:22 99:15,20 100:8,18 101:13 102:16 108:23 109:18 110:7 111:4 111:14,15,21 122:24 124:17 125:5 126:11 127:2 141:20 142:23 143:1 145:10 156:3 157:4,14 163:6 165:5 168:9 171:15 174:1 176:4 177:13 179:11 185:4 188:22 191:7,18 193:1

goes (9) 13:25 28:19 29:6 114:4 148:5 165:14 180:11,20 186:20

going (69) 3:18 7:9 10:2 17:9 21:4 23:2 27:4,4 29:9 33:20 63:3 64:21 68:20 69:3 70:20 75:7 76:17 77:18 80:20 85:22 86:3,4 89:18 94:14 96:18 99:23 104:11 110:23 113:3,6,11 114:18 117:9 133:18,22,24 135:1 144:13 146:4 147:12 148:15,17 149:5 151:25 155:8 156:7,20 157:20 158:23 159:25 163:12 164:21 176:14,15 177:2

178:13 183:2,15,23 185:24 186:8 187:9 190:10,13 191:9,18 192:18,18 193:3

Goncharuk/Yatvetsk…

192:11

good (19) 1:5 6:13 22:25 23:17 24:13 36:3 77:9,12 104:15 107:19 125:8 129:4,6 130:12 140:2 151:7 161:11 178:7 189:7

Goods (1) 91:1 Google (2) 125:23

157:15 government (2) 10:3

16:17

grant (2) 31:2 153:9 granted (2) 42:2

152:24 granting (1) 152:1 grasp (1) 190:6

grateful (5) 45:22 72:9 178:11 183:13 187:13

great (5) 41:4 63:6 68:1 83:21 182:3

greater (4) 91:25 101:8 158:15 174:10

green (1) 155:1

Greenpeace (1)

130:25

grey (4) 61:8,25 65:12 65:12

gross (1) 120:13 ground (3) 37:10 158:1 188:7

grounded (1) 153:4 growth (1) 55:1 GRP (1) 28:25 guess (3) 108:9

160:19,22 guessing (4) 88:1,3

108:5,8 guidance (6) 57:14

59:7 60:8 63:24 95:9 188:25

guide (2) 129:4 145:7

GVA (1) 110:5

H

half (7) 75:5,10 76:3 80:9 81:17 83:19 94:6

halfway (1) 36:19 Hamburg (1) 85:21 hand (2) 188:1 193:10

Handed (1) 172:1 hands (2) 92:12,18 hang (1) 119:7 hangars (1) 118:5 happen (1) 187:10 happened (4) 22:11

143:20,25 177:11 happening (3) 145:19 149:17 182:20

happens (3) 31:11

179:5 183:10 happier (1) 175:21 happy (2) 111:10

175:7 harbour (1) 109:8 hard (5) 8:17 48:8

78:8 118:12 134:12 harder (2) 16:3

150:23

hate (1) 41:25 head (4) 46:16,17
49:18 174:22 heading (3) 18:18 20:12 22:18

headquarters (1)

151:18

hear (2) 116:15 183:19

heard (1) 179:25 hearing (1) 48:9

Heathrow (6) 41:2,5 42:1 118:4 121:20 121:22

hectare (3) 23:18 54:11,18

hectares (3) 10:13 106:13 132:6

held (2) 52:25 128:22 helicopter (1) 133:3 help (5) 6:7 26:8,9

82:17 157:18 helped (1) 26:11 helpful (7) 6:11 17:16

48:11 191:10 192:8 193:23 194:5

helpfully (5) 1:18 2:24 8:23 164:1 194:3

Hermitage (2) 161:7

161:17

herring (1) 114:17 hesitate (3) 81:8 160:22 183:20 high (14) 22:8 32:7

81:14 85:14 86:24 88:22,24,25 92:20 103:22 112:18 146:14 148:8 157:7

higher (14) 22:12 26:20,21,23 53:11 53:14,20 83:19 87:22 97:15,16 99:24 133:22 143:13

highest (23) 12:9,11 41:20 42:7 43:21 43:24 44:13,15,19 45:6 53:15,16,16 62:8 69:19 71:14 71:16 72:11,15 123:9 141:3,23 154:14

highlighted (1) 165:24 highly (4) 89:24 93:2 103:17 117:14 highway (4) 17:2 29:6

152:6 154:1 highways (2) 153:22

176:4

HILDYARD (149) 1:5 2:19 3:2,5,12 4:16 5:2,5,16 6:8,14,18 7:1,5,12 27:7,10 28:3,12,19 29:3 32:11,17,21,24 33:4,12,23 34:11 37:4,24,25 39:7,21 40:10,14 41:21 42:13,16,24 45:7 45:17,19 46:7,10 48:7,11 70:6,11,14 70:17,20,22 71:5 71:12,18,24 82:8 106:21 111:5,7,14 116:12,19,21 119:17 120:18 121:6,14,20 122:6 122:15,20 134:14 135:3,6,8,12,14

Opus 2 International transcripts@opus2.com
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201

April 12, 2016 Day 37

138:6,8 153:16 157:8,11 168:19,20 168:23 169:2 170:15,20,25 171:2 171:16,19,21,25 172:4,16 173:1,5 174:18,25 175:22 176:12 177:5,19,22 177:24 178:5,11 179:9 181:9,15,21 182:9,11,18 183:13 183:18 184:3,12,16 184:23 185:14 186:3,7,17,25 187:3,13,21 188:12 189:16 190:8,15,20 191:10,12,25 192:8 192:11,17 193:16 193:23 194:5,9,17 195:5,11

hindsight (1) 177:10 hit (1) 80:24

hmm (2) 21:18 96:10

Hold (1) 122:6 holiday (1) 189:24 home (3) 12:13 161:6

187:4 homes (1) 13:3

honestly (1) 49:14 hope (8) 19:12 37:20

46:1,7 66:21 70:4 80:3 164:2

hoped (1) 37:20 horizon (1) 178:8 hospitality (1) 46:19 hotel (12) 55:21 59:7

60:24 65:13,16,17 65:18,24 66:1 68:2 69:25 70:1

hotels (5) 56:3,6 58:10,22 61:23

house (21) 4:3 15:17 22:1 23:12,13 68:8 68:14 75:3,10,12 75:15,16,16,20,21 75:22 76:1 125:6 132:3 173:9,10

households (1) 150:8

Housekeeping (2)

178:14 195:12 houses (37) 12:14,23 14:19,24 15:1,5 18:5,5 19:6,12

20:22 21:16,19,22 22:6 23:4,11 28:23 75:4 123:10 131:13 132:12 134:1,6 136:12 140:10,15 140:18,24 142:2 146:4,5 155:21 158:15,17,18,22

housing (12) 15:2 19:4,11 21:25 22:4 35:2 129:19 151:14 151:24 152:14 154:25 156:25

huge (9) 60:5 64:1 91:1,10,11,12 102:11 162:19 163:9

hundred (1) 29:7 hundreds (1) 88:15 hurdle (4) 141:18 147:8 153:13

184:19 hypothetical (5) 87:14

114:20 118:1 120:20,23

I

I25/39/92 (1) 119:8 I25/39/93 (1) 119:19 idea (7) 23:17 61:3

63:1,2 64:18 90:1 187:8

ideal (6) 76:19 77:8 84:23 85:4,10 88:11

identical (4) 73:11,16

73:19,20

identified (4) 36:8,16

37:12 164:16

identifies (3) 29:18

35:10 36:13 identify (8) 22:20

45:10 51:13 165:5 165:9,11,24 178:22 ignore (4) 31:13 39:22

121:16 130:23 ignored (2) 12:17 34:3 ignoring (1) 118:8 illuminated (1) 173:12 illustration (3) 41:8,23

139:16

imagine (3) 92:17

110:17,17 immediate (2) 173:24

192:22 immediately (1) 85:8 impact (1) 107:20 implementation (1)

174:6

implication (2) 103:19 128:8

implicit (2) 93:11 185:16

implicitly (1) 184:20 implies (1) 74:14 import (4) 167:9

169:4,5,7 important (11) 12:8

20:3 37:18 45:4 57:6,9,11 71:15 119:10 152:8,18

importantly (1)

145:20 imported (1) 91:2 impossible (5) 81:19

155:8,16 179:15 184:3

improve (1) 140:7 improvement (2)

157:8,17

inaccurate (1) 78:21 inaudible (1) 178:10 incidental (1) 137:10 include (7) 43:22,23 43:23,24 58:9

107:6,9 included (7) 104:13

109:12 131:2 132:13 134:6 138:12 170:11

includes (3) 30:13

101:20 131:19 including (5) 21:23

63:11 104:10,14 131:7

inclusion (2) 19:21

154:21 income (32) 40:5

51:23 52:6,11,15 52:17 55:25 56:7,9 56:14,15,20,21,23 57:3,4 59:11 60:1,2 60:6 61:21,21 65:3 69:15 94:9 129:16

143:3,8,9,10

170:10,13 income-based (3)
55:22,23 93:5

income-producing (4)

57:1 61:24 93:10 93:11

incoming (2) 152:7,14 inconsistent (1) 69:23 incorrect (2) 117:20

123:16 incorrectly (1) 10:4 increase (3) 30:17

34:23 55:2 increasing (1) 152:9 incur (1) 137:24 independent (1)

18:13 independently (1)

39:5

INDEX (1) 195:1 indicated (5) 142:2

155:24 169:14 178:18 186:18 indication (7) 71:7 73:10 151:11

153:23 154:1 155:5 191:10

indicative (1) 131:19 indirect (1) 155:13 individual (6) 19:12

36:9 51:11 53:5,6 117:13

individuals (1) 151:8 industrial (33) 54:9

58:19 68:21,22,23 77:15,19 79:21 83:6 84:20 85:7 88:4,4,16,20,21,23 89:1,6 90:2,6 91:6 91:20,24 92:5 107:6 117:13 118:6 130:10 137:12 173:16,24 174:12

inefficiency (1) 178:9 inelegantly (1) 174:18 inevitably (1) 137:10 inflexible (1) 135:16 influence (1) 151:25 influenced (2) 50:6,7 information (5) 9:24 16:14 34:19 73:12

145:16 informed (2) 36:20

145:8

infrastructural (2)

27:10 157:8

infrastructure (25)

13:1,21,22 14:3,5 27:14,20,22 28:21 35:1 131:17 132:23 133:8,14 136:17,19 136:25 137:1,3,15 138:10 156:11 157:16,19 176:11

initial (2) 143:5 166:2 input (1) 97:4

inputs (10) 13:13 20:11 95:18 97:13 97:15 98:12 106:5 106:8 129:23,25

insensitive (1) 121:15 inserted (4) 12:16

25:2 126:9,10 inside (7) 19:1,1 132:17 136:13

151:9 162:14 190:18

insofar (1) 87:25

inspection (2) 108:20 112:21
install (1) 155:16 installed (2) 27:19

159:12

instance (8) 56:3,19 94:24 95:22 96:25 98:3 103:16 106:10

instructed (6) 113:10 117:19,22 127:3 128:12 166:3 instructing (1) 187:14 insufficient (1) 24:8 Insurance (4) 118:25 119:24 166:1,17

integrated (2) 112:13 117:16

intended (1) 106:25 intending (1) 33:21 intention (2) 11:8

68:10

interest (11) 16:17 22:7 58:14 78:23 79:8 96:19 151:22 169:11 171:10 172:19 188:21

interested (4) 9:25 11:15 69:3 188:3 interesting (1) 100:9 interests (1) 170:17

internal (2) 133:19,20 internally (1) 135:1 international (4)

24:14 57:16 84:1 102:23

internet (1) 31:16 interpret (1) 44:25 interpretation (1)

9:17

INTERPRETER (2) 7:2 8:11

interpreters (1) 7:7 interrupt (2) 41:22

82:9

interrupted (1) 40:15 intervening (1) 156:15 intrinsic (2) 63:21

107:13 intrinsically (1) 58:14 invalidate (1) 76:23 invest (5) 62:18 101:3

101:15 104:11 149:1

invested (2) 44:17 95:17

investing (2) 94:9 102:22

investment (24) 4:22 5:13 7:2 38:11,11 41:11 56:14,18 59:20 63:17 65:1 65:20 69:16,22 70:2 94:10 101:18 104:8,13,14 105:17 108:1 143:17 148:6

investments (2) 96:17 101:1

investor (13) 18:14 42:14 94:5,13 95:20 96:17 101:3 101:7 103:15,18 105:8 106:17 143:6

investors (4) 102:15 102:23 103:1 145:21

invitation (1) 155:4 invited (2) 4:16

146:13

invites (2) 151:5,6

inviting (1) 108:9 involved (12) 25:11
25:15,17,18,21,22 26:1 39:18 83:4 139:5 172:25 187:12

involvement (3) 50:4 50:17 110:24

involves (1) 52:7 irrelevant (3) 16:18

30:24 68:11 island (1) 68:10 isolation (2) 165:23

167:3

issue (23) 14:6 15:22 16:8 18:10,19 40:6 60:5 73:4 97:1 100:6 106:10 114:16 120:21 137:11 147:5,9 154:5,13 183:1,2 188:16,18 189:14

issues (7) 7:18 49:24 140:12 147:7 158:25 160:8 192:6

Italianskiy (1) 37:4 items (1) 166:5 IVS (1) 17:25

J

J1/3/1 (1) 185:1

J1/3/2 (1) 185:4

January (1) 144:4

JENSEN-GROUP (1)

146:16

JLL (1) 48:14

JOHN (2) 46:6 195:7 joint (7) 47:20,23 48:2

81:20 128:16 145:24 146:23

Jones (7) 24:17 46:16 49:6 83:4 89:16 128:11 133:5

judgment (5) 59:8,23 66:6 115:25 163:5 June (3) 54:24 140:22

194:12

junior (1) 194:3 JUSTICE (149) 1:5 2:19

3:2,5,12 4:16 5:2,5 5:16 6:8,14,18 7:1 7:5,12 27:7,10 28:3 28:12,19 29:3 32:11,17,21,24 33:4,12,23 34:11 37:4,24,25 39:7,21 40:10,14 41:21 42:13,16,24 45:7 45:17,19 46:7,10 48:7,11 70:6,11,14 70:17,20,22 71:5 71:12,18,24 82:8 106:21 111:5,7,14 116:12,19,21 119:17 120:18 121:6,14,20 122:6 122:15,20 134:14 135:3,6,8,12,14 138:6,8 153:16 157:8,11 168:19,20 168:23 169:2 170:15,20,25 171:2 171:16,19,21,25 172:4,16 173:1,5 174:18,25 175:22 176:12 177:5,19,22 177:24 178:5,11 179:9 181:9,15,21

182:9,11,18 183:13 183:18 184:3,12,16 184:23 185:14 186:3,7,17,25 187:3,13,21 188:12 189:16 190:8,15,20 191:10,12,25 192:8 192:11,17 193:16 193:23 194:5,9,17 195:5,11

justification (3) 24:12 24:13,18

K

KAD (1) 176:2 keenly (1) 69:3 keep (4) 20:20 76:3

186:4 189:20

Kharkovskaya (3)

29:11 126:23 158:25
kilometre (1) 29:2 kilometres (15) 16:25

17:2 22:21,22,24 23:2,9,13,14 27:16 125:17,24 127:12 127:19 156:12

kilowatts (1) 137:6 kind (11) 4:5 13:2 25:6 72:4,12,16

146:9 158:11 161:19 172:17 191:15

Kirov (3) 175:2,18 176:5

knew (1) 178:7 knock (1) 178:15 know (60) 3:2,5 4:7

6:12 7:7,9 8:6 21:2 22:2 24:7 26:13 30:20 31:4,9 32:13 49:19 61:7,23 75:23 76:1 87:24 97:23 100:5 102:14 106:9 109:9,13 110:25 111:3 116:4 119:1 125:6 126:17 127:15,22,23 128:2 129:15 139:6 142:6 143:6 145:22,22 148:11,25 171:2 174:9 176:21 177:13 181:20 182:19 183:24 187:9 189:11 190:17 191:17 192:25 193:10,15 194:14

knowledge (3) 50:9

50:11 63:1

knowledgeable (1)

72:7

known (3) 53:21 58:4 130:18

knows (4) 75:18 148:11 187:10 191:17

Kurotny (1) 126:15

L

label (1) 44:19 laborious (2) 140:8
141:15

lack (3) 58:12 81:3 114:21

land (240) 1:13,14 2:10,12 4:2,22 5:19 5:22,24 6:1,1 7:3

8:11 9:8,16 10:7,12 10:19 11:7,11,22 11:24 12:2,6,9,10 12:11,13,14 13:6 15:24 16:1,20 17:4 18:19,23 19:1,21 20:4,5 23:19 26:2 27:2,11,15 29:7 30:6,7,8,8 34:10 38:16 41:2,3 42:8 42:14,20 45:9 54:9 54:21 66:9 67:3,16 67:20,21,25 68:3 68:11,23,24 69:1 70:18 71:6,9 72:8 73:19,20 74:20,24 76:8,10,20 77:15 77:19 79:7,10,21 81:1,2,5,12,16,18 81:22,24 82:7 83:6 84:7,18,20 85:2,7,7 86:1,1,6 88:4,4,9 88:16,20,21,22,23 89:1,4,6,12 90:2,6 91:6,12,17,19,21 91:24 92:5 93:11 95:4 106:13 107:1 107:5,6 112:17 113:9,10 114:14,19 117:2,11,13,19,21 118:2,6,22 119:12 119:13,18,22,25 120:5 121:5,11 122:11 124:18 126:3,4,18 127:16 128:2,3,7,12,18,21 128:21 129:16 131:7,16 132:4,6 132:10 138:20 139:20 141:4,8,19 141:23 142:15 145:15,19,21,23 146:3,17 147:6,12 147:13,21 148:2,13 148:18,21 149:2,9 149:9,16,25 150:9 150:10,14,20,24 151:2 152:12,25 153:11,21 154:17 154:22 155:11,17 155:25 156:4,5,15 158:13,19 162:10 164:19 165:1,20,23 166:12,14,16 167:2 167:6,9 168:25 169:16 171:12,14 172:5 173:16,24 174:13 175:8 177:9

land’ (2) 154:24,24 land’s (2) 19:23

154:23 landing (1) 171:4

landmarks (1) 161:7 landowner (2) 116:7

155:4 landowners (2) 79:2

82:6

lands (2) 4:24 7:4

Lang (7) 24:17 46:16 49:6 83:4 89:16 128:11 133:5

language (1) 36:3 large (13) 37:7 74:14

76:16 77:24,25 78:14 80:17 91:3 98:17 100:22 102:21 133:18,19

large-scale (1) 95:14 largely (3) 66:19

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

202

April 12, 2016 Day 37

111:9 130:10 limited (7) 78:25 79:4 14:14 18:16 19:3
larger (2) 78:17 82:21 92:18 110:21 20:17 21:6,15 25:7
158:14 173:21 185:9 29:12,22 41:14,15
LaSalle (7) 24:18 limits (2) 19:22 42:14 43:20 44:1,2
46:17 49:6 83:4 154:22 44:4,5 45:8 46:25
89:16 128:12 133:6 line (20) 13:25 21:17 51:11 52:15 53:12
late (1) 183:8 23:9 28:16,17 29:2 53:24 54:12 56:7
law (12) 136:7,11 29:6 38:4 43:8 44:2 58:6 60:16 61:15
179:3,4,16 180:1 85:12 89:16,22 61:24 62:14 71:9
185:11 187:19 97:24 98:1 109:2 71:12 73:6 75:4
188:20,23 189:8,17 110:13 147:1 76:25 79:1 82:25
lawyers (3) 50:24 167:19 172:7 83:23 94:22 95:8
64:12 187:23 lined (1) 108:14 95:22 97:3 100:9
leap (2) 64:1 117:23 lines (2) 66:5 122:5 100:25 102:22
learned (1) 194:3 link (7) 23:6 59:9,23 104:16,25 105:10
learnt (1) 83:17 83:15 89:3,15 108:11 109:7
lease (1) 16:1 174:2 110:20 113:9
leased (1) 56:20 linked (1) 58:14 126:11 131:9 132:9
leave (8) 32:12 33:9 links (4) 76:5 86:15,25 135:21 138:4,6
50:24 85:18 108:23 88:8 140:13 143:23
162:11 178:25 liquid (2) 99:19 101:5 144:1 154:2,19
187:17 Lisiy (1) 127:20 155:20 159:9
leaving (1) 59:21 list (10) 14:9 37:11 160:12 161:24
led (1) 71:19 58:25 59:3 109:12 165:1 168:9 188:14
leeway (1) 192:4 109:13,15 124:17 193:24
left (6) 33:9 162:17 124:24 193:9 looked (5) 18:21 83:1
165:15 171:19,21 literally (1) 81:17 169:18 176:24,25
172:2 litigation (1) 193:13 looking (26) 9:20,21
left-hand (1) 164:4 little (33) 5:10 9:5 39:19 44:8,22 52:7
legal (2) 160:5,14 28:25 48:7,8 57:2 56:18,21 57:4
legally (3) 18:18 20:12 71:3,4 80:19,20 63:14 73:22 95:2
53:18 81:22 82:24 92:9 96:17 97:10 99:12
legitimate (5) 53:12 106:21 109:1,2 105:8,12 106:8,18
91:25 96:14 98:16 114:4 122:2 128:17 125:20 145:12,21
120:16 138:23 139:17 146:2 153:18
Lehman (1) 80:25 140:16 143:13 171:22 175:18
length (6) 13:4 51:19 145:15 150:15 looks (15) 6:2 9:8,10
62:3 65:8 109:3 157:14 170:5 172:6 9:15 17:13 21:19
136:1 176:20 177:15 29:13 31:17 52:13
Leningrad (4) 4:23 7:3 178:12 192:4,4 52:19 82:19 103:20
8:12 19:17 live (2) 70:12 75:15 104:1 190:10
Leningradskaya (1) lived (1) 130:8 193:22
11:12 living (2) 12:15 31:12 loose (1) 189:22
let’s (20) 2:15 5:2 loading (11) 67:19 Lord (158) 1:6,8,9
8:18 14:14 20:17 108:24 109:5 110:1 2:19,23,23 3:4,7,7
46:1 57:11 63:2 110:12 166:23 3:14 4:16,20 5:3,6
64:10,17 73:6 167:14 168:4 170:3 5:10 6:5,13,13 7:14
77:21 85:18 98:16 170:7 172:13 8:13 14:24 18:12
106:2 114:13 123:8 local (14) 86:17 88:6 27:9,9 28:7 29:9
125:14 154:13 137:5,8 139:10,12 32:4,12,12,20,20
159:9 149:12 150:4 151:7 32:22 33:9,9,18
letter (11) 19:8,15,16 152:22 153:23 34:7 35:8 37:5,5,19
20:3 150:4,15,21 154:2 157:20 37:19,23 39:8
153:17,24 154:20 174:11 40:15 42:23 43:2,3
155:2 located (5) 78:24 43:3,18 45:16,18
letters (3) 18:21 151:4 126:7 127:15 46:5,5,11,12 48:6
151:10 160:24 161:10 72:9 110:24 118:17
level (25) 22:15 29:25 location (13) 73:21 118:17,19 119:7,15
30:14,15 59:19 74:21 75:24 76:7 119:20,20 120:18
70:2 86:24 89:19 88:7,16 129:4 121:2,7,19,19
89:24,25 93:2,4 146:7 160:23 122:1,1,14,14,17
98:4 99:24 101:5,8 161:10,11,12 122:17,18 163:16
101:9,15 102:13 162:13 163:17 168:17,18
104:13 131:1 lockstep (1) 174:2 177:21 178:2,2,7
142:12 148:6 logical (1) 101:17 178:15,15,16
159:12,25 logistical (1) 110:21 180:21,21 181:7,12
levels (1) 130:24 logistics (1) 189:17 181:12,17 182:6,10
liable (1) 1:23 London (1) 173:11 182:14,14 183:1,1
licences (2) 60:13 long (21) 13:23,23 183:9,17,17,19,23
64:3 14:20 15:6,7,9 21:7 184:3,10,13,21,21
licensing (1) 64:4 23:4 28:22 105:2 184:24 185:17,17
life (1) 82:14 123:3,4 133:16 186:6,16,16,24,24
light (2) 152:21 155:1 134:12 139:1 140:5 187:2,17,22,23
lightning (1) 187:14 158:10 170:21,23 188:7,10,16 189:8
liked (1) 34:25 172:12 191:14 189:18,18 190:2,6
likelihood (1) 190:21 longer (5) 37:19 64:9 190:11,25 191:1,9
likewise (1) 158:6 139:3 158:8,23 191:16,20,23 192:7
limit (4) 78:6,7,8 look (76) 3:20 5:2 192:9,13,13 193:9
91:20 11:14 12:18 13:24 193:13,15,17,19,19

193:22,25 194:8,8 194:15,16,16 195:4 195:6,8,10

Lordship (35) 1:6 2:1 3:8 13:6 18:9,12,15 44:18 46:13 48:1 118:20 119:1 156:9 163:6 164:24 165:10 166:4 167:24 178:22 179:1,2 181:17 182:6,6,15 183:19 184:11,14 185:2,5 187:18 188:2 189:11,21 191:4

Lordship’s (9) 17:11 43:4,7 44:21 60:17 184:25 187:17 188:21 194:1

loss (3) 119:22 133:23 191:15

lost (2) 171:17,22 lot (22) 21:22 37:6

41:11 48:24 70:15 80:1 81:2 90:21 91:4,6,9,13 104:8 108:1 151:18 152:12,12 171:12 176:16,23 177:11 182:21

lots (2) 63:5 64:12 low (11) 8:4 14:24 17:4 19:11 25:5

26:19 88:21 118:15 139:1 146:9 147:3

low-rise (1) 154:25 lower (10) 22:10

26:22 32:6 101:4 137:1 142:23 155:20 162:3,19,20

lowest (1) 169:15

LPK (5) 118:22 119:18 166:5,15 169:19

LUDMILA (2) 1:7

195:3 lump (1) 22:7

Luncheon (1) 122:22 luxury (1) 129:18

M

machines (1) 63:12 macroeconomic (2)
174:1,16

Maggs (3) 188:13

190:1,13

main (11) 1:11 17:12 26:24 28:7 51:22 134:17 135:10 161:5 165:13 188:10 191:8

major (9) 46:22 79:18 146:12 151:15,16 152:7 153:22 176:4 176:11

making (14) 23:1,15 52:20 87:2 95:3 97:3,7,18 134:8 149:6 154:7 156:12 166:24 185:18

management (2)

60:12,13 manager (1) 108:21 mansard (4) 29:25

30:3,14 31:7

manufacture (1)

173:23

map (9) 125:21 134:2 155:24 157:13

161:24 164:4 97:22 174:7,10 96:12 97:1,6,9
171:12,15,16 176:2 100:12 101:23,25
Maps (1) 125:23 meant (1) 38:23 102:2,17,18,19
margin (2) 1:16,16 measure (2) 95:23 103:20,22 104:4,5
marinas (1) 89:17 96:23 104:18,18,20,22
mark (1) 192:19 measurement (1) 105:1,2,15,20,24
market (87) 18:5 25:7 135:4 106:7,11 146:8,8
25:8,9 26:17,19,24 mechanical (1) 71:20 146:10 152:16
29:17 38:10,12,13 mechanically (1) 173:9
38:20 39:9,11,14 90:10 million/$130 (1)
39:15,19 40:11 mechanistic (1) 70:6 104:22
42:4 43:22 45:5,5 median (1) 35:16 Milner (40) 33:13,18
51:13,16,17,23,24 meet (4) 131:21 37:23 48:12,13
52:2,3,19 53:25 152:14 157:3 72:9 83:23 106:24
54:2 55:12 56:18 193:21 111:6,12,16 116:17
56:24 60:7 61:22 meets (1) 114:10 116:20,24 118:19
62:2,2,4 65:6 70:23 memory (1) 166:13 118:23 119:15
70:24 71:1,21 mention (4) 5:12 17:6 120:3 121:21,25
73:25 74:17,23 27:15 34:13 122:18,24 135:17
75:4 79:21,22 80:7 mentioned (1) 43:18 138:11 154:13
80:21 81:10,23 merely (2) 108:23 157:24 163:12
82:16 83:21 86:17 109:5 173:8,15 177:21
86:25 87:21,25 merit (1) 169:22 178:2,4,9,16 183:9
88:1,2,19 92:5 merits (1) 150:19 183:21 187:3,7
97:21 98:2 99:17 met (1) 117:5 194:18 195:9
102:5,10,20 103:1 method (6) 52:11,15 mind (12) 40:17
106:19 124:6 57:7 123:12,16 103:11 106:21
125:11 128:11,14 124:10 154:5,6 158:13
129:1,5,7 143:1 methodology (3) 164:24 167:7
145:13 146:19 72:19 124:5,14 168:15 182:7 186:4
147:2 173:7,10 metre (5) 25:3 35:11 192:20
176:21 35:15 138:13 minimise (1) 131:20
market-based (3) 73:6 160:10 minimum (4) 131:21
73:7,9 metres (24) 29:8 132:14 134:15,16
marketed (1) 53:8 30:10 36:25 37:16 minor (3) 9:7 35:6
marketing (4) 15:21 37:17 109:3 110:19 88:13
16:2 51:20 158:9 123:3,4 132:2,5 minus (1) 45:14
marketplace (3) 78:25 133:24 134:14,18 minute (3) 10:25
89:2 145:19 135:5,7,8 159:6,17 44:20 80:16
markets (4) 79:20,24 175:5,7,15,15,16 miracle (1) 182:5
102:24 103:4 mezzanine (1) 159:12 Mironova (1) 188:2
marriage (1) 53:23 microphone (2) 48:8 misguided (1) 148:17
mass (2) 91:12 149:11 106:22 missing (1) 47:3
massive (1) 64:7 middle (5) 61:9 79:18 mistake (2) 148:24
master (1) 109:8 86:25 124:3 161:14 149:3
materially (1) 92:7 mile (3) 80:9 81:17,17 mitigate (1) 113:8
mathematically (1) miles (3) 76:2 79:14 Mm (2) 21:18 96:10
105:21 125:9 model (13) 12:16
mathematics (1) Millard (68) 11:23 14:14 20:12,18
87:20 12:17,19,25 13:8 96:4,25 98:7,7
matter (18) 46:25 13:12,16 15:12,21 99:14 105:5 106:5
70:8 75:6 115:22 16:8,19,24 17:6,12 106:20 167:12
115:23,24,25 17:18,23 18:2,11 moment (8) 36:15
119:16 124:16 18:16,18 22:19 81:16 84:22 107:23
136:11 163:5 23:1,7,18 24:1,3,19 111:4 122:18 184:7
173:12 183:5 184:5 24:21 25:5 29:18 189:13
184:8 189:3,6,19 29:22 30:18,21 Monday (1) 189:24
matters (5) 33:13 31:5,17 32:5 34:3 monetary (1) 81:19
46:19 48:3 157:25 34:13,22 35:9,20 money (14) 24:25
194:15 36:8 37:12,15 46:5 25:1 44:16 62:18
maximum (2) 132:1 46:6,7,12,24 48:6 63:13 69:3,18
134:12 48:13 60:22 72:10 70:15 104:10
mean (41) 5:18,20 80:5,12 87:2,24 143:18 149:2 154:3
14:8 15:25 28:1,14 92:24 118:12 122:8 155:5 170:21
33:17 37:4 61:15 122:15,24 134:5 month (2) 15:20 21:3
70:8 71:19 75:6 163:17 165:9 months (11) 15:11
79:10,14,24 82:9 168:17,20 195:7 21:2,3,4,9 128:15
94:2 109:18 114:4 Millard’s (13) 11:22 130:8 138:25
115:6 120:5 125:5 16:22 17:20 18:9 140:23 168:13
126:7,8 129:12,22 20:10,20 22:17 174:15
131:18 133:12 23:24 29:12 30:12 moor (1) 110:18
148:25 151:4 33:2 36:2 116:20 moored (2) 108:23
153:19 154:5 million (58) 2:11,12 109:24
157:11,13 160:12 2:14 9:19 10:22 mooring (8) 67:19
162:14 165:9 11:2 16:22 23:21 109:19,20,21,23,25
169:13 173:8 24:20,21 54:11,23 110:11,15
182:21 191:12 55:3,5 74:5 75:3,5 morning (4) 1:5
means (9) 5:14 41:10 75:11,12,25 76:3 122:25 178:22
51:16 58:13 73:9 87:9,9,11,16 96:7,9 183:8

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

203

April 12, 2016 Day 37

mortgages (1) 22:6 Moscow (7) 46:21
48:18 51:4 145:23 151:19 153:22,23

Moskovsky (1) 161:18 mother (1) 25:14 move (12) 32:12

110:23 123:8 125:14 127:24 141:1 151:19 158:24 164:17 181:4 192:23 194:6

moved (2) 190:21,22 moving (6) 66:12

111:2,17 147:4 182:21,25

multi-billion (1) 15:1 multi-storey (2) 24:24

30:9

multiple (2) 100:23

145:12

multiples (2) 94:12

106:7

Municipality (2) 19:17

19:20

N

name (3) 130:21,23 171:9
named (1) 59:6 names (1) 125:23 nature (15) 52:3 53:5

59:8,13 68:25 74:21 76:6 77:11 83:6 88:8,19 91:16 92:4 98:11 129:3

near (2) 41:2 135:18 nearby (3) 86:18

135:14 156:20 necessarily (18) 33:21 49:5 57:8 60:4

63:10 64:21 70:4 76:23 89:3 92:2 95:2 100:6 114:11 125:5,11 164:20 173:12 179:10

necessary (10) 15:8 20:14 24:22 27:23 38:5 40:16,20 52:20 155:17 184:18

need (52) 13:3,8 19:25 23:8,15 25:1 26:21 27:19 28:9 28:18 32:14,22 33:11 34:12 49:25 52:4 53:1 60:9,14 60:15 67:25 73:15 74:5 87:20 92:15 98:5 99:15,16 100:12 117:10 120:3 130:4 133:13 133:17,19,24 134:21 136:7,23 137:23 138:14 139:2 140:1,3,13 172:24 175:23 179:21 180:1 181:3 182:22 188:22

needed (1) 37:20 needs (5) 68:2 134:19

170:12 182:15 183:24

Neft (2) 151:16,23 negates (1) 68:6 negative (1) 44:17 negotiation (2) 80:17

82:13

negotiations (3) 77:20 80:18 81:13
neighbourhood (1)

19:4 neighbouring (1)

116:6 neither (2) 127:9

166:20

net (2) 40:4 193:8 network (6) 133:20 134:21,24,24 155:18 156:20 never (8) 2:6 10:9

25:18 35:4,5 49:14 124:11 187:10

nevertheless (5)

130:5 141:20 145:8 145:12 146:6

Nevsky (4) 31:25

161:14,16,20 new (11) 27:23 46:8

63:4 64:11 90:19 99:22 104:11 111:2 151:14,24 154:9

news (1) 178:7 nice (2) 68:8 70:12 nickname (1) 130:21 night (1) 109:21 nilly (1) 154:6

nine (2) 128:14 138:25

nod (1) 66:16 noise (1) 71:4 non (1) 66:19 non-efficient (1)

41:19 non-profit (2) 19:18

150:5

non-residential (5)

35:23 36:1,5,10,13 non-Russian (1) 34:17 normal (2) 9:17 191:8 normally (3) 58:8

76:12 78:2

north (4) 84:14 90:16 130:15 161:14

Nos (1) 127:20 note (3) 17:11 95:9

119:10 notice (1) 96:21 notion (1) 82:9

notional (2) 77:15,17 notorious (1) 130:23 November (4) 47:16 143:25 144:3 189:2 number (64) 8:23 9:1

9:4 10:3,17 12:19 15:12 20:21 21:16 25:5,9 26:21,23 29:10 34:25 35:2,3 35:6,10 36:22 37:2 37:11 46:24 73:1 77:11 79:2,3 84:3 92:18 94:7 98:21 99:4 102:16 103:15 124:20 125:16 130:12 131:14 132:1 133:19 139:13,14 141:19 142:15 145:20 146:5,16 149:7 150:8 153:5 158:14 158:16,18 160:17 162:5 163:1 164:4 164:9 172:2,7 175:11 176:1,3 185:20

numbers (9) 13:7 16:25 36:24 37:14

87:12,14,22 97:14 103:15

O

objecting (1) 181:9 objection (1) 150:18 objections (5) 19:21

117:4 150:7 152:23 154:21

objective (3) 105:8 127:25 128:5 objectively (1) 149:2

objects (1) 31:6 Oblast (2) 11:12
128:22 obligations (1) 190:23 observation (1) 31:24 observe (1) 38:25 observes (1) 11:23 obstacle (2) 114:18

116:25 obtain (1) 148:7
obtained (3) 85:15 144:19 148:14 obtaining (1) 138:19

obvious (3) 74:1 106:4 168:23

obviously (21) 46:12 94:9,22 102:1 110:24 113:8,13 134:20 137:23 158:15 165:20 167:12 171:11 172:11 178:20 181:2,17 184:1,13 188:19 194:2

occasion (2) 108:9 142:20

occupied (1) 58:18 occur (1) 130:1

occurred (4) 34:5 65:1 192:7 193:7

occurs (1) 41:5 October (2) 144:1,2 odd (1) 183:15

offer (9) 8:7,8 11:9,10 22:3 35:14 128:15 128:16 146:21 offered (6) 6:4 9:17 9:19 10:1 128:23

129:2

offering (2) 5:15 7:8 offers (8) 4:22 5:13,22 7:2,6 11:16 81:20

128:17 office (12) 35:21

36:11,21,23 56:19 58:19 61:2,15,19 63:3 69:14 143:3

offices (1) 36:6 officially (1) 36:20 offsetting (1) 170:12 oh (2) 3:24 24:12 oil (2) 149:19 151:17 okay (13) 3:1,25 8:2

8:15 10:20 46:16 75:9 99:13 105:5 121:6 163:15 165:12 166:10

old (1) 130:21 old-style (1) 135:4 on-land (1) 34:16 once (3) 18:24 129:22

180:9

Onega (34) 41:16 44:5 44:14 111:17,19 113:5,13,22 117:8 118:13 119:18,23

119:24 121:9 164:15 165:17,18 166:7 168:5,21,25 169:12,14 170:7,20 171:14,18 172:6,9 172:9,15,23 173:20 175:6

ones (5) 16:25 104:12 162:14,21 163:6

ongoing (2) 61:13 151:20

online (1) 9:23 onwards (1) 151:3 open (3) 90:16,19

185:19 opened (1) 62:25 opening (2) 63:5

64:11

opens (2) 64:17,18 operate (8) 49:3

60:14 92:14 104:21 165:23 167:2,15 172:10

operated (6) 65:24 116:9,13,18 117:22 193:12

operates (1) 100:23 operating (13) 79:13 94:7 99:17 100:11 101:22 102:9,16,24

103:16 104:11,13 105:24 107:17

operation (1) 101:2 operational (3) 66:19 107:15 108:25 operations (2) 109:20

152:19 operator (1) 98:22

opine (2) 50:10 149:5 opined (1) 48:3 opinion (14) 11:4,22

18:13,15 32:5,18 33:1,17 48:3 115:17 124:12 157:7 177:3 182:1

opinions (2) 158:3 163:10

opponent (1) 191:4 opportunity (6) 67:6

94:10 99:18 101:18 115:19 180:18

opposed (5) 35:24 54:15 94:3 121:12 158:9

opposite (1) 133:15 opt (1) 53:14 option (2) 148:9,22 oral (3) 180:22 185:7

194:7 oranges (1) 80:6

order (16) 6:12 20:1 38:12 49:25 50:1 60:14 69:15 92:14 92:16 105:25 109:7 139:18,25 153:13 185:6 193:6

ordered (1) 185:5 ordinarily (3) 53:8 95:5 110:2 ordinary (1) 84:19

organisation (1) 150:8 orientate (1) 165:10 orientation (1) 161:15 original (3) 2:20 48:13

177:12 originally (1) 113:10 ought (6) 47:2 97:24

98:1,9 99:13 142:12

outdoor (1) 111:20 outline (1) 167:25 outlined (3) 113:24 124:4 156:22 output (1) 106:19

outrageously (1)

103:22 outset (1) 176:20 outside (13) 22:3

25:23,24 50:25 61:8 68:10 84:11 146:7 153:22 176:1 176:3,10 190:18

outstanding (1)

192:20 overall (3) 54:23

119:18 159:20 overlap (1) 32:9 overnight (1) 171:22 overpriced (1) 82:4 oversight (1) 7:24 overstated (1) 170:14 owned (3) 39:5 99:5

118:22

owner (4) 18:14 58:15 63:16 168:3

owners (2) 39:4 114:14

ownership (10) 9:20

15:24 38:7 92:10 113:9 114:13,16 164:20 167:6,11 ownerships (1) 112:2

P

page (38) 2:24 6:6,6 7:15,19,21,25,25 8:8,13 9:21 10:13 11:10 12:22 13:15 14:7 15:22 16:8 35:13 43:6 47:3,4,6 96:6 109:14,18 122:1,5 123:1 124:3 125:21 132:9 156:4,8 161:3 163:19 167:18 195:2

pages (1) 17:16 paid (6) 82:12 83:10

104:9,10 105:22 170:12

papers (1) 171:25 parachute (1) 133:2 paragraph (8) 1:12

14:11 58:6 95:12 148:10 185:5 188:11,14

paragraphs (1) 3:9 parameter (1) 24:2 parameters (9) 5:25 24:1,11 25:4,8

26:18,19,24 71:8 Park (3) 84:13,14,15 parking (10) 33:10,19

34:14,16,16,21,22 34:24 35:5 163:13

part (32) 2:20 42:1 63:21 67:25 74:16 111:24 112:1,2 117:14 119:20 120:1,1,6,7 121:17 122:6 133:5 138:12 143:24 151:4 156:23,24 161:16 161:20,21,22 169:18 170:10 179:22 185:10 186:17,18

participant (1) 40:11 participants (3) 38:13
39:15,19 particular (15) 33:16

44:25 79:2 82:15 82:15,16 94:20 111:9 122:11 151:14,21 164:16 186:23 191:19 194:14

particularly (6) 128:3 131:9 152:21 173:19 177:10 191:22

particulars (5) 4:25 6:7 9:22,23 10:12

parties (3) 183:24 193:12,12 partners (1) 6:3

partnership (2) 19:19 150:5

parts (2) 161:16

182:21

party (8) 9:25 113:14 169:12,19 170:1 172:18 185:7,23

pass (1) 171:24 passed (1) 25:15 passing (1) 63:5 pause (3) 98:9 119:5

159:20 paving (1) 112:19

pay (21) 22:8 39:15 62:3 66:24 69:7 70:8,11,14,20 79:6 79:17 86:9 92:21 98:2 102:17 103:20 156:24 175:22 176:4,5,7

paying (3) 67:9 157:21 170:8
payments (2) 60:13 92:16

people (38) 5:19

12:15 21:24 22:8 26:3 36:6 50:16 61:9,25 68:8 70:8 70:11,14 75:17 81:5 92:12,16 93:24 102:22 131:5 140:2,4 149:5 151:6,19,22 152:15 154:7,9 170:18 173:16,17,18,20 175:18,20,22 179:7

people’s (1) 190:19 percentage (2) 133:13

159:19 perfect (4) 80:3

176:14 177:2 184:8 perfectly (7) 53:12

79:12 105:7,9 111:10 120:16 124:9

performed (2) 109:21 109:22

period (8) 55:2 81:3 117:1 138:20 140:9 158:8,10 188:23

permission (12) 19:16 24:25 30:15 42:2 152:1,24 153:7,9 154:3 180:22 184:14 185:7

permissions (6) 14:23 15:2,8,17 20:15 149:13

permit (6) 139:7,19 139:23 141:6,7

184:17 permits (11) 49:25

91:17 128:13,23 139:5 140:17 141:12,13,21 147:15 148:7

permitted (3) 41:12

42:8 109:15 permitting (10) 24:20

128:7 129:3 136:17 138:11,12,18,23 139:15 140:11

person (5) 34:18 68:10 114:15 117:3 167:15

personal (3) 50:3 75:6 76:4

personally (3) 25:21 49:14 179:22

persons (3) 169:11,12

170:17 persuade (1) 184:10

persuaded (1) 115:20 persuading (1) 151:19 pessimistic (4) 141:25 152:23 153:1,3

Petersburg (44) 24:23 31:10,21 32:1 46:23 54:9 66:14 68:14 77:16,20 79:1 81:22 85:22 88:4 89:14 90:14 90:15,21 91:2,4 92:1,11 99:8 103:7 128:19,22 130:8,12 130:22 142:16 143:2 146:7 149:8 151:16 152:4,12,17 158:16,21 160:24 161:6 162:10 175:3 176:1

petrol (1) 55:21 phone (2) 3:24,25 photo (3) 8:4,17

28:15

photograph (3)

110:20 155:23 166:5

photographs (3)

131:10,11 165:19 photos (7) 8:19 13:24 19:6 30:1 31:15

32:6 131:6 physical (2) 83:7

139:24 physically (1) 53:18 pick (1) 77:18 picks (1) 29:22 picture (3) 108:11,18

155:20

pictures (2) 159:11,16 piece (10) 4:2 5:24

10:6 12:10 42:7,14 85:2,25 86:1 114:18

pieces (2) 34:10 84:7 piled (1) 107:22 pink (1) 164:3

pipe (1) 14:1 pipeline (2) 28:21

29:5

place (11) 22:20 49:3 76:9,10,10 88:21 103:2 125:22 128:1 144:17 179:6

places (1) 118:8 plan (9) 3:18 14:6,7

64:20 140:11 142:1 177:12 178:24

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

204

April 12, 2016 Day 37

189:14 pool (2) 82:22 83:14 92:13,20 139:13 principle (4) 85:6 128:5
planners (2) 157:9,15 poor (4) 42:9 86:24 149:12 150:16 96:14 124:1 180:7 properties (27) 7:15
planning (6) 19:16 107:12,14 188:5,9 prior (1) 51:5 7:22 11:16 16:3
42:2 139:21 148:25 Popov (7) 180:21 practical (2) 115:4 probability (1) 42:15 27:5 29:10 33:1
190:12 194:14 181:3 182:7,25 116:24 probably (57) 9:2 36:9,12 37:7,14
plans (2) 148:15 183:16 184:6 practically (1) 155:15 10:16 19:9 29:2 53:6,17 55:1 56:6,8
168:23 186:14 practice (10) 24:22 53:9 56:22 63:15 56:10,25 58:8
pleaded (1) 189:13 Popov/Mr (1) 178:17 26:10 51:9 77:9,13 79:4 80:20 81:4 60:23 61:1 63:25
please (24) 1:6 2:21 Popov/Steadman (5) 116:2,4 124:22,24 82:22 92:3,6,21,23 76:6 95:10 129:10
6:20 7:1 8:13,21 179:5,9 180:9 189:6 100:7 108:5 113:11 130:13 133:1
9:15 10:11 11:21 182:16 192:22 practising (1) 46:20 113:17 115:6,7,8 property (130) 9:24
17:10 19:7 31:17 population (1) 152:14 practitioner (1) 115:22 125:19 10:23 11:1 17:21
35:9 38:2 42:17 port (70) 51:5 66:13 191:16 126:7,8 133:15,22 29:15,24 35:10
43:6 45:2 46:5,15 66:13 67:6,11,16 Pravdy (9) 33:10 35:8 134:8 139:10 36:12 38:19 39:9
46:25 165:3 167:17 67:25 68:14,19 35:10,19 36:8,12 141:21 143:4,19 39:13,16,17,19
167:20 168:9 69:4 72:12,16 37:6,9,12 146:25 148:12 40:17,20,24 41:9,9
pleased (1) 82:1 76:19 78:22 79:1 pre-planning (1) 150:17 157:4,6 41:14 42:5 43:9,9
pleasurable (1) 180:5 79:13,18,22 80:9 139:22 160:3,17 163:9 43:13,21,24 44:4,9
pleasure (1) 187:11 83:2,3,5,9,12 86:5 precise (1) 159:24 167:1 169:19 170:4 44:20,23,24 46:23
plenty (1) 115:19 86:15,17,21 87:4 predlagayet (1) 5:14 170:10 172:5,9,14 49:23 53:6 55:13
plot (37) 3:14 8:3,11 88:14,19 89:7 90:2 prefer (2) 76:1 123:22 173:16,21 174:19 55:17,21,25 56:1,2
9:9,16 10:12,14 90:7,15,16,20 91:5 preferable (1) 124:12 175:6,12,19 176:7 56:13,18 57:6,12
11:7,11 13:6 19:21 91:24 92:11,14 preference (1) 76:4 188:21 193:9 57:14,21,21,23
23:20 27:15 30:7,8 93:18 99:21 101:4 prejudge (1) 187:1 problem (6) 12:4 20:9 58:11,13,17,18,20
81:16,18 119:12,13 101:20 102:9 109:8 prejudice (1) 182:23 28:17 32:18 89:9 58:25 59:9,9,12,13
131:25 132:10 164:13 165:15,21 premises (3) 33:10 190:5 59:24 60:1,3,3,6,11
133:12,16 134:13 168:2,6 169:23 36:17,18 problematic (1) 60:16,19 61:11,17
146:3 148:21 170:9 171:8,11 premium (52) 54:20 176:22 62:1,6,9,11,13,13
154:22 155:11 172:3,7,8,10,15 55:4 66:24 67:2,9 procedure (2) 18:23 62:16,17,19 63:8
156:4,5 158:13,19 173:19 174:21 74:24 75:23,23 24:9 63:20 64:8,15,22
166:4,15,16,18 175:3,5,19,20 77:21,24,24 79:5 proceeded (2) 54:5 65:5,5,10,11,14
167:9 176:6,7,9 79:17 80:16 83:10 159:16 66:2,7 67:9 68:7,21
plots (24) 4:22 5:19 portfolio (1) 146:19 83:24 84:5,19 85:3 proceedings (3) 1:3 68:22 69:11,14,17
7:3,18 10:19 81:12 portfolios (1) 142:15 85:6,16,20,21 86:9 15:19 184:19 69:24 70:3,3 71:17
117:13 118:25 ports (20) 86:18 89:17 87:20 88:3,10,15 process (21) 35:23 71:18 72:1 83:5,17
119:24 121:8,9,12 90:11 93:18,19,21 89:3,11,12,14,20 42:16 50:1 71:15 85:13 89:22 100:14
128:21 132:10,16 95:25 96:7,22 90:1 91:22,23,25 78:8 82:19 83:25 101:15 107:16
132:19 134:9,22 98:17,20 99:5,9,18 106:25 107:5 99:21 138:23 139:7 111:24 117:22
146:17 150:9,10 101:2,10 102:15 114:24 115:9,10,25 139:15 140:4,8 118:6 123:13
153:21 166:1,20 103:2 105:18 116:1 117:13 118:7 141:12,22 151:6,6 127:15 129:2,8
plug (2) 98:5,6 173:17 129:14 160:1,9,15 151:20 153:4 130:16 139:6
plus (2) 25:2 134:24 Ports’ (1) 145:11 175:8,9 176:16 177:14 140:22 146:3 158:8
pm (4) 122:20,21,23 Portsmouth (1) 84:9 preparation (3) 1:21 processes (3) 49:24 159:2,7 162:1,3,13
194:19 position (6) 45:8 179:20 192:5 101:13 141:20 168:3 169:21
pocketed (1) 187:6 49:19 62:8 180:15 present (3) 45:13 procure (1) 146:20 172:19 185:15
point (55) 14:8 19:14 188:19 189:12 190:21 193:4 produce (3) 53:11,15 propose (4) 5:17,18
21:6 23:1,7 28:25 positions (1) 40:8 presented (2) 9:5 61:21 5:18 182:24
29:23,23 30:12,19 positive (3) 107:25 13:25 produced (1) 112:9 proposed (1) 27:13
32:24 34:1,4 35:8 153:7 154:4 presently (5) 40:21,25 produces (2) 53:13 proposes (2) 7:3,7
45:7 54:8 60:22 possibility (2) 42:12 41:3,6 42:6 54:10 proposing (1) 7:11
66:11 75:8 80:16 135:17 press (3) 50:15,18 product (1) 153:1 proposition (3) 63:6
87:2,17 97:17 possible (19) 17:14 131:2 production (2) 88:6 65:23 102:4
100:20 115:7 18:18 19:10 20:12 prestigious (10) 31:20 174:11 prospect (2) 180:12
119:12 120:19 53:18,18 70:17 31:22,25 32:2 profession (1) 61:14 189:22
122:25 124:1 129:6 87:6 97:19 106:12 130:7 161:8,10,11 professional (3) 25:22 Prospekt (1) 161:14
134:8 136:16 144:6 126:2 131:21 161:22 162:18 49:2 50:5 protect (1) 112:19
144:9 148:19 151:1 136:14 142:19,20 presumably (5) professionally (1) protection (7) 128:10
162:9 165:11 147:5 150:14 115:15 156:1,5,13 25:18 131:23 132:17
166:24 169:2,16 155:12 170:13 172:14 Professor (3) 188:13 135:24 136:4,13,15
170:16 173:15 possibly (6) 151:8 presume (2) 8:18 35:2 190:1,13 protest (1) 131:2
178:18 179:12,13 152:15 173:19 presumption (1) profit (2) 64:20 100:1 proved (1) 178:8
179:17 183:10,19 186:9,9 194:15 153:10 profitability (2) 99:6 provide (6) 113:14
183:20 184:22 potential (19) 18:13 pretty (1) 170:21 100:21 126:12,20 168:4,6
185:25 186:1 188:6 42:12,17 43:18,19 previously (2) 65:24 profitable (5) 61:4,5 189:5
192:2 44:15 45:10 57:23 189:23 71:10,13 72:8 provided (1) 93:15
pointed (10) 28:23 58:9,16 59:10,24 price (29) 16:20 22:10 profitably (1) 102:10 provides (1) 73:10
34:4 70:4 73:1 70:18 79:3 86:8 23:18 25:3 26:20 progress (1) 193:17 providing (1) 90:20
82:21 85:11 92:10 124:18 131:22 26:20 35:11,14,16 prohibitive (3) 23:2 provision (1) 186:13
93:8 109:23 152:11 132:16 164:12 51:17 54:8,14,15 147:17 155:14 provisional (1) 155:1
pointing (1) 170:4 potentiality (4) 42:21 69:7 73:12 74:6 project (10) 4:19 14:6 proximity (4) 107:1
points (16) 14:9 18:16 45:9 70:9 172:19 82:1,11 83:18 84:5 14:7,23 15:8 20:6 162:12 169:3,9
32:15 34:2 37:20 potentially (8) 7:22 93:23 102:6 104:9 20:15 99:24 139:21 pub (1) 59:7
55:2 113:18 126:12 43:14 44:24 86:7 104:14,17 105:22 143:7 public (1) 180:5
157:24 164:11,18 101:14 114:7 160:1,10 174:12 projects (1) 3:13 publicity (1) 50:12
185:17 187:24 126:12 129:12 prices (7) 22:9,11,13 propensity (3) 121:17 publicly (3) 93:23
191:6,8 192:21 pound (1) 56:4 55:1 88:22,23 121:22 122:11 99:19 101:6
political (3) 50:8,9,20 pounds (2) 75:5,11 149:19 proper (2) 51:20 pubs (4) 58:10,22
pollution (2) 130:24 power (14) 23:8,10 prima (1) 148:8 150:19 63:24 64:6
131:1 28:1,2,5,10 82:23 prime (1) 162:10 properly (2) 127:25 purchase (5) 104:9,16

128:23 129:5 160:5 purchased (2) 56:13

83:18 purchaser (3) 9:25

42:17 62:3

purchaser/willing (1)

42:4

purchasers (2) 92:19 128:25

purchasing (2) 57:3 101:5

purple (1) 162:6 purpose (18) 42:6

45:10,11,12 62:9 62:10 67:21 68:6 71:7 79:15 85:3 110:10 112:18 114:1,2,6,7 154:25

purposes (12) 1:21 41:24 109:16,25 110:1 115:4 136:6 142:17,22 148:13 184:18 194:1

pursue (1) 98:16 put (35) 1:18 3:21

4:10 11:18 13:14 21:14 32:15 33:13 36:6 37:20,21 39:8 72:8 96:3 104:25 105:3 119:12 122:2 122:3,7,7,12,12 133:1 144:15 150:18 169:14,15 173:8 174:18 182:2 183:5 185:18 191:7 191:11

putting (6) 3:3 4:4 118:24 125:22,22 143:18

Q

quality (8) 8:4 29:20 32:6,7 70:6 86:15 112:19 162:20

quantum (2) 186:20 186:21

queried (1) 6:22 queries (1) 192:20 query (1) 192:22 querying (1) 121:16 question (45) 3:18

30:11 38:5,14 39:7 39:11,24 40:14 41:7 43:5,7 57:6,9 57:10,11 62:7 66:4 70:22 71:21 76:25 77:23 90:12 101:2 103:25 114:13 116:16,17 122:5 128:7 133:10,12 136:7 142:8 164:17 165:1 178:17,25 181:4,5,13,18 182:15,16 184:1 186:8

questions (19) 37:24 38:1 42:25 43:1 44:21 45:19 51:8 101:14 118:24 130:5 163:18 168:18,19,20 177:20,20 187:24 195:5,11

quick (1) 37:25 quicker (1) 27:8 quickly (5) 15:3 27:5

29:9 154:8 191:17 quite (62) 3:2 6:24

28:22 38:3,23 40:17 42:18 45:2 48:24 50:16 56:4 61:13,16 64:4 65:23 74:6 75:1 76:8,13 79:4 80:17 82:1,13,22 84:15 90:21 91:18 92:20 98:10 100:9 102:21 104:1,15,23 106:4 106:23 108:1,10 110:10 113:17 114:10 115:1 116:14,15 122:13 133:15 140:4 141:22 144:18 151:5,8,18 154:3,7 154:11 168:25 170:10 176:12,16 191:14 192:6,17

R

rail (1) 91:5

railroad (2) 30:24,25 railway (5) 161:18,19 161:21 162:17

172:7

raise (4) 40:15 101:14 189:19 190:4

raised (2) 120:21 188:16

raises (1) 18:19 raising (2) 23:7 37:2 range (10) 3:22 26:25

58:18 87:7,19 96:17 97:11,19 98:8 177:7

rare (1) 52:2 rarely (1) 175:22

rate (35) 2:15,18 16:9 16:11,15,16 24:2,4 24:8,10,12,13,15 26:22 52:10,16 96:11 98:1,3 101:25 142:8,10,22 143:5,11,12,12,15 143:16,23 144:18 144:20,25,25 145:6

rates (1) 22:8 rational (2) 94:13

101:3

raw (1) 126:13 re-examination (4)

37:23 163:16 168:18 195:10 re-read (3) 4:17 40:18

115:15

reach (3) 79:25 97:25 100:14

reaction (1) 70:8 read (17) 1:20,23 6:11

6:14,20,25 7:21 29:4 43:25 44:11 48:20,21 50:18 179:14 180:16 186:3 190:11

reading (2) 110:18

180:11 ready (1) 189:20

real (21) 3:22 4:10 5:23 11:17 18:4,4 25:10,11,14,19,23 31:8 34:8 57:21 73:18 75:11 76:12 76:14 82:14 119:4 119:10

realise (2) 34:15 143:8 realistic (14) 16:23

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

205

April 12, 2016 Day 37

54:14 62:22 100:19 reflect (5) 45:6 52:21 remarkable (1) 187:4 178:19 186:14 rivers (2) 135:24
104:1 116:3 131:14 54:20 96:1 106:25 remember (3) 40:7 192:22 136:5
136:21 142:7 reflective (1) 191:15 164:22 190:3 respectfully (2) 178:4 ro-ro (2) 169:8 172:20
147:21 148:1 153:3 reflects (2) 57:23 remind (2) 33:12,24 182:14 road (25) 13:5 14:2
153:6 189:21 58:16 reminded (1) 8:23 respond (1) 120:3 76:2 79:14 80:10
reality (5) 21:10 refused (1) 153:8 remotely (1) 147:3 responded (1) 112:9 81:17 91:5 125:9
117:15 146:21 regard (3) 13:19 169:4 rendered (1) 183:4 response (1) 186:7 133:17,24 134:14
177:13 179:4 186:22 Renord (3) 5:20 7:2 rest (2) 125:1 184:5 134:16,17,18,19,21
really (30) 3:23 22:19 regarded (2) 105:16 17:7 restricted (2) 79:3 134:24 135:11
37:1 39:22 44:8 105:20 Renord-Invest (4) 136:9 152:6,7 165:13,21
48:11 56:13 61:6 regardless (7) 55:25 1:15 3:10 4:22 5:13 restriction (1) 136:3 166:11 176:2,3
68:12 75:7 80:25 60:2 62:5 65:4 rent (4) 61:22 63:16 restrictions (1) 135:18 roads (8) 131:16,20
82:8 84:9 97:19 102:6 139:14 140:2 63:18 176:9 result (5) 16:3 85:14 132:13,14,23 133:7
114:17 121:16 regards (1) 33:5 rental (1) 61:22 89:21 99:14 130:1 133:19 137:17
137:15 145:18 region (6) 4:23 7:3 repeated (1) 33:15 resulting (1) 58:12 role (1) 187:12
156:7 159:1 162:18 8:12 54:9 142:16 report (48) 9:1,3 10:4 results (4) 100:4 roll-off (1) 167:10
168:7 171:2 174:11 146:12 10:17 17:12 20:10 124:8 177:7,17 roll-on (1) 167:10
178:18,25 181:6 regions (1) 153:19 20:20 22:17 29:4 retail (1) 58:20 room (1) 56:4
182:22 186:7 registered (6) 30:6,13 29:13 47:2,8,13,15 return (11) 99:19,24 root (1) 28:13
188:20 30:25 31:11 36:21 47:18 66:19 82:19 101:5,8,10 143:10 rouble (8) 56:4 143:14
reason (16) 13:20 160:12 83:1 90:24 95:22 145:24,25 183:21 143:21,25 144:2,7
26:17 33:16 34:17 registration (2) 18:24 101:12 104:6,18,19 194:12,13 144:9,11
61:2 64:5 67:5 90:5 30:22 110:8,13 111:22 returns (3) 58:14 69:7 roubles (3) 144:12,13
92:9 103:5 113:2 regular (1) 154:8 112:6,9 115:13 101:15 144:15
153:7 181:13,19,19 regulations (4) 52:1 117:24 123:3,6,15 reveal (1) 193:4 roughly (4) 2:15 76:9
181:23 131:22 132:15 126:20 127:2 131:2 reversion (1) 56:16 111:14 175:6
reasonable (21) 45:24 189:5 140:13 156:7,11 revise (2) 11:4 123:4 round (3) 90:17,19
59:25 78:8 79:12 reiterate (1) 117:9 157:4 158:4 159:18 revised (1) 96:4 104:3
88:10 89:15,19 relate (1) 75:1 165:2 166:3 188:6 RICS (3) 52:1 57:18 route (3) 60:9 148:17
94:14 96:23 97:23 related (66) 39:9,13 188:10,13 73:9 152:9
98:10 101:2 102:25 39:16 40:17 41:9 reported (1) 50:15 right (111) 8:1,20 routes (1) 152:7
105:7,11 106:15,17 41:14,18 42:5,6 reports (12) 32:15,25 10:25 12:3 13:17 RUB (9) 2:12,14 9:19
107:21,24 128:6 43:9,21 44:3,19 46:13,25 48:1 13:25 14:12 16:21 10:22 11:2 24:20
133:6 45:9,11,12 53:1 50:18 51:12 127:1 21:20 22:22 23:15 24:21 35:14,17
reasonably (3) 49:19 55:17,20,24 56:1,2 163:25 187:25 29:3,14 30:2,18 rubric (1) 185:4
105:16 154:8 56:6,8,10 57:6,12 189:9,13 31:23 33:7 38:14 rule (5) 85:1,4 108:7
reasoning (1) 98:17 57:13,21 59:1 60:3 represent (2) 13:3 39:23 42:22 43:11 133:6 186:8
reasons (9) 33:5 50:8 60:6,16,18,23 61:3 115:16 48:14 51:14,15,17 rules (3) 64:4 111:8
50:9 55:15 69:13 61:11,17 62:1,6,9 representative (2) 52:6,22,24 53:13 189:5
113:23 155:16 62:10,11,13,16,17 7:17 163:5 53:22,24 54:5,18 rumours (1) 50:10
167:4,8 62:19 63:8,25 64:8 require (10) 24:24 55:5,17 64:23 65:2 run (3) 54:6 99:12
recall (3) 120:23 133:4 64:14,22 65:5,11 41:11 69:22 74:13 67:7 69:8 71:24 133:4
140:14 65:14 66:2 68:7 79:13 101:8 108:1 72:20 73:23 74:9 running (1) 166:10
received (1) 153:17 69:11,17,24 70:3 137:6 184:5 188:9 80:14 83:22 84:3 runs (2) 161:17,21
reciprocated (1) 71:17,18,25 95:10 required (11) 42:19 86:6,12 89:25 93:4 runway (1) 118:6
180:19 169:21 104:5,8 132:14 96:5 107:4 108:25 Russia (42) 4:11 15:18
reclaiming (1) 106:13 relating (3) 29:19 95:9 133:7 135:12 110:23 111:7,20 15:25 25:11,14,19
reclassification (1) 187:18 138:21 148:6 112:14 113:12,25 25:23,24 46:17,20
153:10 relation (13) 19:8 180:24 183:18 116:19 119:1 121:3 48:14,16,25 49:3
recognise (4) 2:7 8:16 26:15 27:1 50:7 188:24 121:6,24 122:11 49:10,12,18 50:12
8:17 95:8 101:19 114:21 requirement (6) 13:9 124:19 125:17,19 51:4 68:15 75:15
recognised (1) 52:12 122:25 129:8 13:10,11 45:5 126:22 127:5,14,21 80:24 82:3,6,11
recollection (1) 33:25 137:24 157:25 134:15 176:9 131:17 135:19 88:24 90:16 91:3,3
recommendation (1) 159:1 162:1 164:12 requirements (4) 136:21,22 138:14 91:7 92:5 98:22,24
154:4 relationship (2) 86:3 79:10 135:3 145:24 142:12 144:23 128:10 133:21
recommended (1) 88:18 146:1 145:2,5 146:11 137:10,13 139:5
184:17 relative (3) 103:11 requires (1) 65:20 147:6 149:5 154:15 142:5 152:11 174:7
reconstruction (1) 143:6 174:13 research (1) 46:19 159:3,9,21 162:1 174:9
31:10 relatively (1) 88:23 resell (1) 22:16 162:19,21 163:8 Russian (66) 2:8,21
red (6) 109:2 114:16 relatives (1) 25:16 reservation (2) 120:25 164:2 165:12,13,16 5:4,14,17,21 6:6,9
162:3,10,15 166:8 relevance (1) 82:15 182:18 170:21 175:10,11 6:11,15,15,20,21
redevelop (1) 99:21 relevant (12) 17:1 reservations (1) 114:3 175:12,20 176:6,18 6:25 7:1 8:8,9,21
redevelopment (1) 22:20 23:6 30:15 residential (19) 35:21 177:4,19 180:20 9:6 10:2,7,11 11:9
41:5 40:24 46:14 114:12 35:22 36:4,7,10,13 186:25 192:17 11:18 16:7,13
reduce (2) 97:5 106:7 120:11 121:9,10 36:22 37:13 128:13 193:16 194:12,17 18:22,25 19:9 20:8
refer (2) 101:19 165:6 125:9 150:16 137:13 141:3,13,23 right-hand (2) 162:4 22:5 34:15 35:24
reference (11) 1:17 relevantly (1) 66:8 147:6 150:14 166:11 36:2 48:20,21,22
54:2 60:1 110:9 reliable (4) 73:14 152:25 153:11 rights (4) 105:9 49:9 98:4 131:21
119:3 120:7 126:22 76:17 85:15 145:7 154:15 155:7 106:18 108:8 132:15 134:15
127:2 165:4 167:18 reliant (2) 170:2 residents (1) 130:22 156:14 135:3 140:6 141:18
187:25 173:20 resolve (1) 183:20 ring (1) 176:1 143:12 144:13,24
references (3) 187:18 relocating (1) 151:17 resolved (2) 178:23 rise (4) 19:11 53:20 145:6 149:18
193:10,14 rely (4) 19:15 154:12 181:5 111:10,10 150:25 179:3,4,10
referred (3) 1:15 84:2 185:11,12 respect (19) 18:12 risk (2) 98:4 191:9 179:16,19 180:1
150:5 remain (2) 147:12 24:17 27:11 33:18 risk-free (2) 143:11,12 185:11 187:18,23
referring (3) 30:2 168:12 36:3 42:20 62:21 riskiness (1) 143:7 188:3,20,23 189:1
164:5 167:22 remaining (2) 32:25 71:5 72:23 80:5 risky (1) 144:18 189:8,17
refers (4) 1:13,14 183:25 118:12,21 119:13 river (3) 136:6,8 rusty (2) 130:18,20
109:23 136:4 remains (1) 192:9 121:5,12 155:10 161:17

S

sadly (1) 171:18 safely (1) 99:5 sake (1) 183:14 sale (24) 2:12 3:14

4:19 5:15 6:4 7:23 7:24 8:7,8 9:17,19 10:1,21 11:1,1,2,9 11:11 26:20 54:14 71:3 81:1 128:23 129:2

sales (13) 9:22,23 11:25 12:1 17:18 18:4 25:12 29:15 94:2,3 123:22 124:5,12

sanctions (1) 174:6 sanctuary (5) 41:3,23 42:3 60:18 62:22

satisfy (1) 69:10 save (2) 32:4 185:10 saw (6) 3:5 29:6 34:20

83:21 149:19 168:21
Sawyer (1) 110:5 saying (32) 13:8 19:19

19:24 24:5 30:20 30:24 31:9 44:1,22 45:1 63:1,3 88:3 94:4 100:3 105:5,6 105:15,19 106:3,3 106:5,15,15 124:9 143:16,17 148:1 153:7 154:20 157:1 165:18

says (34) 4:18,19,21 6:12 7:16,19 8:9 11:11 12:21 13:15 13:16 14:7 15:21 15:23 22:19 30:18 34:20 35:13 58:7 59:15 63:24 98:21 100:7 112:24 135:23 138:9 142:9 148:13 156:4,11 159:18 162:16 166:7 168:10

scale (4) 64:7 96:1 137:9 149:14

scaled (1) 96:8

Scan (4) 118:22 166:5

166:15 169:19

Scandinavia (6)

118:25 119:24 166:1,17 171:13 172:8

schedule (1) 46:1 science (3) 142:10,14

175:10 scientific (1) 125:23 scratch (1) 156:16 screen (9) 1:9,17 3:8

5:8 19:10 20:20 43:6 163:24 165:3

scroll (2) 6:5 8:13 se (3) 73:5 79:24

123:22

sea (32) 51:5 66:23,25 76:20 78:24 79:6,7 79:11 90:22 102:12 102:15 107:1 113:14 114:21,25 115:5,10,22 116:3 116:5,25 117:14 167:4,13,15 168:2 168:6 170:9 171:11 175:6,7,8

second (18) 14:11,21

24:10 31:9 52:14 107:21 117:24 119:8 120:1 126:20 127:1 138:20 140:19 156:24 161:20 166:13 169:18 179:13

secondly (3) 113:12

142:25 169:9 security (1) 165:17 see (87) 1:9,14 2:2,9 2:11,12,13,20,20

3:1,16,24 4:6,12,18 4:19 5:21 7:20 9:4 9:25 10:11 11:6,7 12:21 13:12,14 14:18 15:21 16:8 20:12,21,23,24 21:5,16,17 22:18 23:22 31:4,15 32:6 33:16 35:12 36:5 38:22,23 39:21,23 39:23,24 49:17 59:15 64:6 73:8 82:14 83:10 87:5 88:13 94:25 96:5 102:10 103:1 105:13 108:25 109:12,14 111:15 128:19 131:18 135:22 138:21 151:9 155:21,22 156:6 159:11 162:3 162:16,16 165:22 166:7,11 171:11 172:5 181:21 182:20 185:5

seeing (1) 184:14 seeking (2) 5:18 6:2 seen (13) 2:6 23:10

31:7,7 68:15 81:5 87:21 110:11,14 131:6 150:1 165:19 174:5

seized (1) 178:18 Seleznyovo (18) 5:25

9:12 10:12 12:14 17:9 18:11 19:9 22:23 23:3 26:16 27:11,16 28:12,13 28:14 154:13 156:5 156:17

sell (23) 3:19,21,23 4:1,2,6,9,15 5:22 11:8,20 21:21 22:16 26:9 52:20 81:2,16 128:12 145:19 146:18 158:18,21,23

seller (3) 51:19 62:4 71:2

selling (15) 25:13,14 25:15,19,20,23 26:2 63:7,11,17 74:6 83:5 93:24 144:13 158:16

sells (2) 75:20 145:15

Senator (2) 128:20,21 send (1) 174:8 senior (1) 50:16 sense (18) 74:16

75:11 76:15 80:2,4 80:11 93:16 94:14 96:24 99:11 100:2 100:18,25 103:13 103:19 105:1 181:8 189:4

sensible (5) 103:20 105:15,17 109:4

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

206
April 12, 2016 Day 37

149:25 171:18 177:11 106:1 148:18 sorry (41) 8:22,23 sphere (1) 101:1 104:21 150:5 86:20 138:19

sensibly (1) 102:6 shows (3) 74:23 180:13,16 184:4 9:13,14 14:9 24:17 spine (1) 134:18 station (8) 28:1,2,6,11 substantially (1)
sensitive (4) 24:2 97:6 150:13 177:11 189:19 190:12 27:7,9 37:1,5,19 spirit (1) 60:12 55:21 161:18,20,21 186:21
98:11,12 side (9) 50:24 81:4 191:20 192:9 41:21 42:9 45:20 split (5) 53:10 114:13 status (4) 128:7 138:1 substation (2) 27:19
sensitivities (1) 50:20 85:19 92:23 102:7 single (8) 12:13 53:8 45:25 66:16,17 114:16 161:16 138:20 181:11 137:23
sensitivity (4) 26:15 164:4 185:9,12 81:1 99:7 128:15 82:9 87:15 103:25 167:6 Steadman (9) 100:13 success (1) 193:5
27:1 97:17 98:14 191:5 128:16 146:20 106:23 107:7 spoil (1) 182:4 178:17 180:13 succinctly (1) 46:14
sentence (1) 38:18 sides (1) 138:18 169:20 116:12,16 118:17 spoke (1) 178:16 181:6,10,14 182:25 suffices (1) 42:21
separate (6) 146:19 sign (3) 47:12,16 sir (1) 171:24 119:23 120:1 spot (1) 29:3 184:6 186:15 sufficient (16) 12:5
177:6 179:11 181:4 165:18 sit (3) 38:1 46:7 111:8 126:22,24 128:17 spousal (2) 188:16,24 Steadman’s (4) 94:24 17:3,5,24 18:1,3,7
185:4 188:5 signature (1) 47:4 site (31) 12:22 13:5 132:5,9 135:6 square (16) 30:9 95:22 104:19 181:7 18:25 19:3 20:7
separated (1) 63:22 signed (4) 47:21,22,24 14:1 16:14 17:2 138:6 158:17 165:6 35:11,14 36:24 step (7) 6:21 54:13,24 24:15,18 40:23
separately (3) 53:10 142:17 22:21,23 23:11,15 165:9 167:11 37:16,17 132:2,5 72:5 95:3 99:16 59:10 157:2 181:19
53:12 164:21 significant (14) 59:19 67:10 83:8 104:23 171:20 184:21 133:24 134:14 101:17 sufficiently (2) 34:18
September (5) 43:12 65:20 70:2 90:20 126:15 127:23 186:25 159:6,17 160:10 steps (1) 54:6 66:8
47:11 80:24,25 92:12 105:14 130:24 132:20,25 sort (18) 10:1 17:15 161:13,18 162:15 stevedoring (1) 168:7 suggest (15) 11:25
81:11 137:17 139:13 133:1,10,18 134:3 17:21 29:25 68:6 St (45) 24:23 29:11 stick (2) 158:3 159:10 17:19 23:24 28:20
seriatim (1) 33:14 140:5 143:24 146:5 134:10 135:2 71:7 87:9,22 93:16 31:10,21 32:1 stop (2) 104:7 176:22 79:4 82:4 96:13
serious (9) 4:6,9,9,15 152:5 157:19 136:10 137:23 99:13 102:5 122:13 46:23 54:9 66:14 storage (4) 79:13 140:16 141:25
11:8,19 62:18 170:10 146:22,24 148:7 135:4 142:11 68:14 77:16,20 111:20 112:12,14 151:1 152:21
148:24 149:3 significantly (11) 158:15 164:5,9 146:12 153:17 79:1 81:22 85:22 stored (1) 68:4 158:10,22 178:21
seriously (4) 11:7 22:10,12 94:12 sites (1) 164:13 168:6 191:3 88:4 89:14 90:14 straight (1) 71:19 191:20
122:3,4 128:1 149:21 150:23 sits (1) 68:3 sorts (1) 171:5 90:15,21 91:2,4 straightforward (3) suggested (4) 23:20
serves (2) 86:17 91:1 152:8 156:21 situation (1) 114:16 sought (2) 10:24 50:7 92:1,11 99:8 103:7 131:24 176:15,16 78:2 132:11,19
service (8) 113:16 158:14 170:14 six (6) 36:9,9,20 37:14 sought-after (2) 146:5 128:19,22 130:8,12 strange (1) 24:3 suggesting (10) 15:14
116:10,21 166:22 174:8,15 130:8 140:23 146:6 130:22 142:16 stranger (1) 68:15 16:10 21:19 44:20
167:19,21 168:1,7 silenced (1) 178:6 size (30) 29:19,23 soul-searching (2) 143:2 146:7 149:8 strategic (4) 46:18 68:13,16 70:7
services (4) 26:14 similar (25) 66:25 86:10,17 96:2 176:17,23 151:16 152:4,12,17 49:21 150:25 102:12,14 121:2
49:2 50:6 168:5 73:11,16,22,23 100:15 103:9,11 sounds (3) 24:3 158:16,21 160:24 153:14 suggestion (3) 6:9,13
Sestroretsk (20) 81:16 74:20,24,25 76:6 131:25 132:3,4,6 127:14,21 161:6 162:10 175:3 stream (3) 57:3 136:6 71:6
81:18 123:8 124:18 76:18 83:6,8 88:7 132:11,19 133:9,11 source (1) 135:25 176:1 136:8 suggestive (3) 89:24
125:18 126:4,18 93:2 95:13 109:9 133:25 134:9,13 south (2) 84:14 stable (1) 144:10 streamlined (1) 93:3 103:17
127:10,13,16 124:15 129:3,3 159:2,5,7,15,20,22 161:15 stage (6) 21:22,24 139:17 suggests (10) 12:22
128:13 129:16,19 150:17 153:24 159:24 160:9,13,20 Southampton (9) 83:5 139:25 140:1 179:2 streams (2) 135:25 15:12 16:19 31:19
130:6,9,14 131:7 154:19 155:10 163:9 84:11 85:16,18,20 188:21 136:5 108:17 110:19
146:17 156:23 160:18 175:19 sizeable (1) 95:19 88:2 89:12 92:1,6 stages (1) 77:22 Street (10) 33:10 35:8 116:2 134:9 140:25
158:1 similarities (1) 15:19 sized (1) 107:24 southern (2) 88:22 staggered (1) 140:9 35:10,19 36:8,12 175:12
set (12) 17:10 46:12 similarity (3) 126:12 skills (1) 11:13 92:6 stamps (2) 140:1,3 37:6,9,12 158:25 suitable (3) 68:25
51:12 79:23 84:2 173:6,14 skinny (1) 171:21 space (9) 31:14 36:21 stand (3) 115:21 strengths (2) 173:25 132:20 152:13
84:25 124:17 127:6 similarly (1) 61:23 skyscraper (1) 15:1 36:23 110:22 133:7 179:7 182:12 174:1 suits (1) 111:11
137:9 158:4 173:18 Simonova (82) 1:7,20 skyscrapers (1) 24:24 136:24 160:2,4,21 standalone (1) 53:4 stretch (2) 130:11 sum (2) 22:7 52:9
175:19 5:3 6:7,14 7:14 8:3 slight (1) 118:18 spaces (6) 33:10,19 standard (9) 43:22 158:20 summarising (1)
sets (1) 13:12 8:8,16 9:8,14,15 slightly (9) 62:22 35:22 36:7,20 58:19 69:16 107:6 strict (1) 64:4 30:17
settled (1) 188:25 12:1,18 15:10,22 80:20 113:5 118:10 163:13 117:6 124:22,24 Stroilov (16) 10:18 summary (1) 96:3
settlement (5) 12:12 16:22 17:17 18:8 133:22 142:21 SPARK (1) 193:22 159:19 160:10 111:9 178:18,20 superimposed (1)
141:10,19 154:24 19:14 20:13,21 162:19,20 184:22 sparks (1) 33:25 standards (4) 17:25 179:14,19 180:10 132:10
157:12 21:8 23:22 24:5 slipped (1) 193:8 speak (6) 34:15 48:7 57:16 114:11 180:16 183:3 186:5 supplemental (3)
settlements (1) 18:23 25:10 29:14 30:2 slot (1) 178:23 48:22 65:13 126:14 133:21 186:18 190:2,4,9 47:11,13 188:13
seven (3) 14:21,21 31:19 34:2 35:17 small (17) 15:2 24:11 193:17 standing (3) 143:2,3 190:11 192:4 supplementary (5)
98:24 37:1,6,21,22 38:15 26:25 35:6 37:17 speaking (4) 34:18 146:2 Stroilov’s (2) 184:24 29:13 47:15,18
severability (1) 184:8 43:4,11 44:7 45:20 74:6 97:7 101:4 106:21 162:25 standpoint (1) 114:12 192:16 73:1 83:1
shaded (1) 164:3 47:21,24 55:12 102:15 104:23 166:10 star (1) 119:17 strong (2) 59:24 61:16 supply (9) 27:23 89:6
shame (1) 183:6 78:2 93:17 95:24 105:4 122:25 special (2) 112:18 start (21) 3:16 14:13 stronger (1) 113:19 89:6 103:8 137:6,7
share (2) 93:23 94:3 100:13 104:20 129:14 133:16,18 151:22 14:22 15:7,9 20:15 strongly (2) 177:3 137:19 148:7 157:1
shares (4) 40:12 93:24 108:20 112:8,24 139:13 179:18 specialises (1) 89:17 21:3 93:9 97:10 184:17 support (2) 87:13
101:5 182:2 120:21 123:9 smaller (4) 73:24 74:9 specialist (1) 52:3 128:19 138:22 structure (1) 59:16 120:12
sheet (2) 40:7,8 126:10 127:8 96:2 133:13 specific (29) 41:10,15 139:19 141:1 studied (2) 42:7 88:2 supporting (2) 133:8
Shevchenko (1) 7:17 129:15 131:13 smallish (1) 99:7 41:16 43:10 44:5,6 142:24 144:17 stuff (1) 173:24 133:21
ship (1) 187:4 132:11,19 134:6,9 smile (1) 40:15 57:22 58:12 59:14 151:6 155:4 158:17 sub-market (1) 162:22 suppose (2) 157:8
ships (4) 86:12 107:24 136:16,18 138:11 so-called (2) 22:15 60:20 64:3 65:11 178:23 191:18 subject (14) 52:22 178:15
110:16 167:10 138:21 140:9 142:9 28:25 67:17,19 68:20 192:14 73:11,16 81:18 supposed (1) 85:3
shocked (1) 178:12 144:19 151:13 sold (28) 18:6 21:16 79:9,15 82:20,21 started (2) 80:23 112:4 113:25 116:6 supposing (1) 41:2
shop (10) 62:23 63:4 158:6,19 159:5,16 21:20 22:6,7,14 83:3 87:4 114:1,2 111:2 162:3,12 165:2 Supreme (1) 189:1
63:7,9,14,16,18,23 159:18 160:19 25:10 51:18 53:10 126:12 127:22 starting (7) 54:8 77:23 169:17 180:3 sure (37) 5:3 6:24 8:6
64:2 69:14 161:25 162:24 56:4 58:8 61:20,20 132:24 141:9,11 87:17 129:6 156:16 182:23 186:11 11:14 36:15 38:3
shopping (1) 153:25 163:3 170:5 180:17 63:20 74:4 76:21 190:3 168:21 191:21 subjective (2) 76:17 38:15,23 40:17
short (6) 46:3,22 185:21 195:3 83:7 84:6 93:10 specifically (6) 59:17 starts (2) 17:11 20:25 78:18 45:1 49:5,10 60:4
80:16 107:23 109:2 Simonova’s (21) 90:24 101:21 113:3,3,6 67:24 118:14 state (4) 21:21 34:7 submission (1) 120:17 63:10 74:18 75:13
188:17 94:25 96:3,25 117:9 120:8,13 128:22 153:19 42:20 156:10 submissions (3) 78:12,16 89:2
shortly (1) 185:19 101:12 103:21 128:24 145:13 176:25 stated (4) 10:2 20:6 119:16 181:20 90:12,23 110:17
show (5) 2:8 13:4 104:1,6,18 105:5 solicitors (1) 187:14 specifics (1) 89:18 29:5 36:24 185:18 114:11 116:14
108:14 129:24 110:8,13 129:21 somebody (7) 4:1 specified (1) 91:14 statement (11) 1:10 submit (3) 89:15 123:6,18 128:8
166:4 130:6 131:6 132:3 11:13 63:1,2 64:10 speculate (1) 79:9 1:10,11,21 3:9 4:18 145:17 178:4 138:1 152:8 157:15
showed (3) 2:4 11:10 142:1 162:6,9 64:18 65:16 speculators (1) 22:14 47:20,23 48:2 submitting (1) 181:12 157:16 160:17
35:4 169:2 182:19 somewhat (2) 85:8 spelled (1) 10:4 80:13 148:14 subproperties (1) 171:8 172:24
shown (12) 9:12 19:5 simple (4) 18:24 111:1 spend (2) 102:19 statements (1) 33:17 37:8 178:20 186:1
19:7 35:9 136:13 60:22 87:19 132:18 soon (2) 148:4 183:23 105:25 States (2) 190:15,18 subsequent (2) 19:22 193:25
144:10 150:1 simply (15) 6:15,19,24 soputstvuyushie (1) spending (1) 155:5 static (1) 52:17 154:23 surprised (1) 178:5
163:19 167:17,20 33:17 34:3 71:9 26:13 spent (1) 154:3 stating (4) 18:22 98:1 substantial (3) 66:24 surprisingly (1)

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

207

April 12, 2016 Day 37

135:16 survive (1) 172:8

susceptible (1) 130:1 suspect (3) 92:8,8

127:3

SV-15 (1) 110:12 SV-16 (3) 109:24 110:10,18

SV-16M (3) 109:12,14 109:20

swathes (1) 91:3 sweep (1) 192:20 synergistic (1) 53:21 synonymous (1) 7:8 system (1) 91:17

T

table (4) 37:2,5 84:3,4 tail (1) 71:20
take (63) 2:1 4:13 10:3 12:8,16 14:6 15:6,12,22 16:20 18:10 19:6 20:14 20:17 27:4 33:11 35:18 42:11 44:16 45:21 53:19 54:8 61:10,25 64:10 65:13 74:3 75:22 77:15,21 86:8 92:3 96:1 97:1 98:15 101:9 112:1 120:19 121:14,15 122:10 125:3 127:22 128:8 129:21 132:7 138:24 139:9 140:4 140:22 141:21 142:24 146:13 150:10 155:14 158:2,23 162:14 169:16 174:9 179:6 182:6 191:13

taken (22) 15:10 16:9 16:9 31:18,20 35:17 77:19 87:12 96:7 106:10 108:18 108:21 121:23 125:10 137:25 138:2 155:23 159:5 179:3 188:18 189:7 189:15

takes (7) 16:8 23:4 72:4 94:19 96:20 139:15 143:7

talk (3) 97:17 102:6 130:22

talked (2) 101:16 189:23

talking (13) 14:24 19:8 30:22,23 31:1 50:23 87:22 137:15 137:16 139:12 150:11 155:25 187:22

tax (3) 40:5 95:16 96:19

technical (3) 40:2,6 71:4

techniques (1) 95:13 tell (12) 5:22 15:15

27:12,14 33:6 54:7 75:13 109:8 145:25 155:23 167:24 193:3

telling (1) 97:24 tells (6) 4:6,8,14 5:23

11:19 89:13 tempted (1) 177:5 tenants (1) 56:20

tend (1) 154:7 186:19 191:17 132:16 136:12 56:1,1,6,7,10 57:5
tendered (1) 181:18 192:1 142:13,14 144:23 57:12,13,21 59:1
tendering (1) 180:23 think (186) 2:10,19,23 158:9 163:17 60:3,16,18,23 61:2
tenor (1) 129:7 2:24 3:15 6:8,10,22 three-star (2) 65:16 61:11,16 62:1,5,9
tenuous (1) 176:12 7:5,6,21 8:22 10:18 69:25 62:10,11,13,16,17
term (2) 56:16 179:8 10:18 12:4 15:13 throughput (1) 106:11 62:19 63:5,8,25
terminal (86) 41:16,18 16:10 18:6,8 19:7 thumb (2) 108:7 64:5,8,14,22 65:5,7
43:12,14,20 44:2,5 19:15 20:8 21:9,12 133:6 65:11,14 66:2 67:6
44:11,14 51:5 23:12,13 27:8 Thursday (14) 178:22 68:7 69:11,17,24
53:25 55:16 57:12 28:24 29:11 30:12 179:25 183:7,20 70:3 71:17,18,25
62:14 66:12,12 30:17 32:9,9,10,17 186:8 189:19 81:19 90:22 91:4
67:7,25 68:19 69:4 32:24 34:2,12 35:6 191:22 192:10,12 95:10 102:11
69:20,23,24 72:11 36:2,4,15,16 37:12 192:19,24,24 169:21 173:23
85:8 86:21,22 87:3 37:13,17 41:17 194:13,21 174:7,13,14 177:11
90:2,19 92:4 93:6 42:15,20,24 43:4 time (47) 8:1 14:23 traded (6) 82:24
94:5 96:2,4 97:2,4 44:18 45:1,7,7 20:14 21:7,21 85:13 89:22 93:23
98:22 99:7,7 47:10 49:8 50:2 22:11 32:4,13 99:19 101:6
100:10,10,16,22 53:5 54:5 61:13,14 34:12 35:7 43:13 trading (12) 57:23
101:7,10 102:1,2 63:6,15,22 65:14 43:15 45:20,24 58:9,16 59:10,24
102:18 103:14,21 67:23 68:18 69:12 46:21,22 49:7 51:4 60:5 88:14,17
108:12 110:23 72:23,25 74:19 52:8 108:17,22 117:17 144:2,5
111:17 113:2,5,13 78:6,7,17,20 84:22 109:22 117:24 176:20
113:20,22 114:23 87:19 88:13 92:13 128:24 138:20 transact (1) 71:3
116:9,18 117:8 92:19,22 97:18 139:9,16 140:5,11 transaction (8) 35:12
118:5,13 119:18,23 98:13 100:5 102:22 140:16 146:20 51:19 62:4 65:8
119:24 121:9 123:1 102:24 103:2,24 147:15 148:4 93:1,19 101:19
163:21 164:5,9,15 105:15 107:17,21 149:10,24 155:13 104:8
165:17 166:7 168:5 110:4,6 111:21,24 179:8,18 187:5,19 transactional (2)
169:12,14 170:7,20 111:25 112:3,11 188:24 191:2,14 93:22 94:1
171:14 172:23 113:2,7,18 114:6 192:5,10,16 194:6 transactions (5) 81:9
174:21 193:5,19 114:10,22 115:11 timekeeping (1) 81:10 93:15 94:2
terminals (4) 34:9 115:21 116:18,20 183:22 128:18
98:24 99:2 102:16 117:24 119:9,16 times (7) 13:5 17:23 transcript (8) 38:2
terms (26) 49:15,16 120:18 122:2,3,12 24:11 111:1 149:16 43:6 66:16 122:2
51:3 57:13 68:25 122:15 123:8 124:7 171:2,3 123:2 167:17
74:25 95:1 115:25 125:13 126:23 timescale (1) 142:2 179:14 190:12
119:21 137:6,7,7 127:5 128:5 129:5 timescales (1) 147:24 transformer (8) 23:10
149:13,17 151:7 134:3,8,10 138:3 timetable (2) 178:3,24 27:19,25 28:2,5,10
155:12 159:5 160:9 140:5,20 141:8,10 timetabling (1) 178:17 28:18 138:1
160:23 162:12 143:18 144:1,16 TIMOTHY (2) 46:6 translated (4) 6:10,11
165:21 173:8 148:1 152:13,24 195:7 6:16,21
176:17 185:23 153:2,3,3 157:24 tired (1) 13:7 translation (7) 2:13
190:19 192:2 158:21 160:3,13 title (7) 10:1 30:13,16 6:23 7:6 10:6 11:9
test (3) 58:3 72:7 162:5 163:8,17,25 160:5,7,12,15 19:12 179:21
114:4 164:14,19,21 today (22) 62:17 63:7 translations (1) 10:5
TEU (2) 100:13,14 166:25 167:4,18 64:7,8,14 81:20 translators (2) 6:12,16
text (1) 58:22 169:2 171:6,22 102:18 115:16 transport (3) 86:15,24
thank (36) 2:25 3:1 173:8,12,15 174:22 128:24 140:7 143:1 88:7
7:5,6,12 29:4 32:11 178:3,5 179:9,11 143:9,10,14,24 transported (1) 91:2
34:7 37:22 40:10 180:3 182:11,12 149:20 153:13 transports (1) 152:7
42:24 45:17,18,23 183:5,13,15 184:7 163:19 164:6,15 transshipment (3)
46:9,24 48:6,11 184:16 185:16 178:21 183:7 44:11 112:14
72:20 73:6 116:23 188:1 189:14,23 today’s (3) 43:6 123:2 167:10
122:17 138:8 190:2,8 191:7,9,11 167:17 treat (3) 41:6 66:1
163:12,14,15 192:9 193:19 told (9) 2:24 16:4 169:20
168:17 177:19,22 194:11 26:18 27:3 183:8 treated (2) 55:16
177:24 188:12 thinking (1) 194:6 191:1,4,4,7 116:2
189:16 192:8 thinks (6) 19:18 24:21 tomorrow (1) 190:14 treating (2) 113:20,21
194:16,17,17 32:5,7 173:5 top (4) 13:15 30:4 trees (1) 156:6
thanks (1) 193:23 189:21 102:19 126:25 trial (2) 1:10,12
theoretical (1) 65:7 third (7) 14:21 24:12 topic (3) 80:20 111:2 tried (3) 54:1 81:2
theory (2) 76:25 40:9 91:11 113:14 120:16 131:20
124:16 148:10 169:10 topography (1) triumph (1) 187:5
thereabouts (1) 2:15 thought (18) 27:13 127:22 troublesome (2)
thin (1) 87:12 32:25 33:2 42:16 total (9) 104:9,10,14 157:23 181:21
thing (12) 9:7 26:24 71:18 72:23 98:9 104:19 132:4,6,8 TRP (15) 38:6,19
34:13 41:24 53:23 106:23 120:22,24 138:9 158:14 40:21 41:6 95:15
105:11 106:16,17 121:21 134:11 totally (1) 90:2 113:7,20,22 114:3
141:17 174:21 149:10 173:13 touch (1) 60:17 114:9 117:4 164:18
191:3,15 176:17 189:11 touching (1) 83:16 170:6 172:21,22
things (27) 60:15 191:2 194:8 tourist (1) 161:6 true (11) 15:24 22:24
68:15 72:6 74:14 thoughts (1) 34:6 town (1) 130:10 25:21 74:18 80:11
77:12 86:9,20 94:4 thousands (1) 88:15 track (2) 194:2,4 86:7 91:7 97:13
96:20 98:6 100:17 three (23) 13:5 15:3 tracks (1) 162:17 115:16 119:9
112:18 113:7 15:11,16 18:21 trade (78) 39:8,13,15 122:10
137:10 142:13,15 21:9 27:5 29:10 40:16 41:9,13,18 truly (2) 74:15 126:17
149:20 150:22 51:12,22 76:2 84:8 42:5,6 43:9,21 44:3 try (11) 12:7 27:4
152:1,3 156:17 92:12 101:13 44:19,25 45:9,11 45:10 75:14 79:25
174:10 175:1 185:3 109:24 131:23 45:11 55:16,20,24 142:23 148:6

177:13 184:13 186:4 194:2

trying (14) 3:19,21 4:3 26:18 32:15 36:1 39:14 47:2 81:15 99:21 146:15,18,21 189:10

Tsvelodubovo (13)

1:13 8:3 9:3,9,18 10:21 11:1,23 12:12 27:2 28:15 29:5 147:4

Tuesday (8) 1:1 182:7 182:8,9,13,20 183:4,12

turn (8) 33:20 41:10 52:16 63:3 154:13 173:2 190:24 192:10

turning (1) 65:17 two (58) 5:6 19:13

21:3 30:21 31:5,6 34:9 37:7,10,25 52:12 54:13 61:8 66:13,18,20 74:4 74:14 84:9,9,12,13 92:12 93:15 98:12 99:22 101:13 103:21 104:21,22 104:25 110:6 111:21,25 112:3,4 112:5 113:7 114:3 115:13 125:13 126:25 138:17 142:13,14 158:25 161:16 163:10 164:12,16 167:4,7 169:20 174:1 185:11,12 187:18 194:11

two-thirds (1) 159:22 type (8) 10:8 57:21,22 58:11 74:25 88:8 151:10 173:17

types (6) 22:4 58:25 86:12 109:11,15 160:18

typical (2) 74:24

183:22

typically (2) 81:6

134:24

U

UK (1) 64:7

Ukraine (3) 15:18

25:24 26:6 ultimate (3) 97:16,20

146:3 ultimately (6) 39:11

82:12 114:14,15,17 119:16

un-clarity (1) 188:23 unappealing (1)

130:20 uncertainty (1) 189:4 uncommon (1) 151:9 underestimated (1)

92:7

underground (5)

34:16,21,22,24

35:4

underlying (4) 173:7 173:14,25 174:16 underneath (1) 166:8

understand (33)

24:21 25:25 30:10 37:7 41:21,22 42:16,17 74:19

82:14 95:20 98:6,7 98:8,13 99:11,13 100:18 108:2 113:16 114:9 132:21,25 166:13 167:24 168:25 170:15 171:5 181:15 182:22 183:9 188:19 189:25

understanding (9)

50:4 99:17 129:6 142:25 153:5 166:22 168:1 179:15 189:12

understood (8) 38:4 38:24 40:19 44:1,7 54:7 169:6 190:25

undertake (1) 177:6 undertaking (2) 51:5

179:22 undervalue (1) 120:14 undoubtedly (1)

55:20

unduly (1) 152:23 unfortunate (2) 153:2

153:16 uninformed (2)

146:10,13

United (2) 190:15,18 unloading (11) 67:20

108:24 109:6 110:1 110:12 166:23 167:14 168:4 170:3 170:8 172:13

unpleasant (1) 131:9 unpredictable (1)

149:1 unrealistically (1)
118:15 unreasonable (1) 97:5 unreliable (2) 85:9,11 unscientific (2) 145:8

146:11 unsensible (1) 144:17 unusual (1) 49:24 update (1) 191:1 upgrade (1) 65:20 upgraded (1) 70:1 upgrading (1) 62:18 uplift (2) 108:6 175:17 upper (1) 78:10

ups (1) 49:8 upset (1) 130:25 upwards (2) 141:21

146:1

usable (4) 107:19 108:18 109:4,16

use (128) 2:18 12:7,9 12:11 17:7 18:19 19:2 25:7 26:20,22 36:1 40:23 41:10 41:11,15,17,19,20 41:20 42:7,8,10 43:10,16,17,18,19 43:19,21,24 44:5,6 44:14,15,19 45:6 53:15,16,17 55:22 55:23,25 56:9 58:12,15 59:18,18 59:19,22 60:2,20 61:18 62:7,8,20 65:3,3,11 66:6 67:13,17,19,24 68:12,19,20,25 69:19 70:18 71:9 71:14,16,19 72:1,2 72:3,5,5,8,11,15 73:24 76:10 86:24

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208

April 12, 2016 Day 37

91:14,15,16,18 99:23 109:11 110:15,16 114:5,6 117:6,6 118:3,7,13 121:22 123:9,22 124:12,22 125:1,11 126:6 135:1 139:20 141:3,4,9,23 142:20 147:6 150:14,21 151:2 152:1,25 154:14 155:7 167:2,16 169:15 171:13 172:20 175:14

useful (3) 80:19 110:10 125:10

user (1) 41:7 users (1) 58:19

uses (4) 17:18 109:13 109:15 159:21

uslugi (1) 26:13 Ust (1) 90:18 usual (3) 13:9,9,10 usually (12) 3:17 4:1

5:23 22:2,7 27:25 58:13 61:22 95:16 98:12 139:4 175:23

utilised (1) 171:4 utilities (11) 22:20 23:3,6 27:18

133:20 137:5,14 148:7 155:17 156:2 156:19

utility (3) 169:3,7,8

V

vacation (2) 194:9,11 valid (9) 12:4 64:9
66:9 75:2 77:4 85:5 89:13 123:13 129:24

validity (1) 130:2 valuable (2) 72:5

120:7

valuation (99) 16:21 16:23 17:10,21 18:10 20:2 23:20 23:24 26:16 29:14 38:6 39:3,3,5 40:4 46:17 51:9 52:18 53:11,14,16,21,24 54:10 57:16 71:8 73:6,7,9 74:10 76:16 77:1,3,7 80:22 83:19 84:22 85:11 87:8,15 93:5 94:17,17,19,21,24 94:25 95:6,7,10,14 95:15,17,18,21,24 96:15,15,21 99:13 100:24 104:1,3 105:6 107:11,20 110:4 112:4 114:12 114:22 121:3 122:8 123:13 124:1,5,16 127:4,7 129:17 131:12 140:14,21 142:13 143:22 145:11 146:3,8 147:3 166:2 169:17 169:25 170:6 185:6 185:8,13,15,15,21 186:20

valuations (2) 46:15 112:10

value (139) 2:10 11:4 11:22,24 12:2 14:24 17:4 30:16

34:8,9 38:7,11,11 38:11,12,12,16,17 39:2,3,14,25,25 40:2,3 42:4 43:22 45:5,5,15 51:13,16 51:17,23 52:2,16 53:2,3,3,9,22,23 54:2,2,23,25 57:23 58:13,15 59:11,11 59:25 60:5,10 61:11,23 62:2,2,4 62:11,14,15 63:14 65:6 66:2 67:3,5 71:1,21 72:17,21 73:10,25 76:12,13 77:15,19 79:25 80:1 81:19 85:25 86:21 87:18 88:5,5 89:1,24 90:2,6,6,11 91:24 92:7 93:25 96:4,21 97:4,5,9,16 97:21 98:15 101:11 102:2 103:21 104:19 105:13,16 105:17,21 106:6,25 107:3,13,25 108:4 110:21 113:11 114:3 117:10,11,12 117:15,19,23 118:4 118:15,22 119:18 119:19,22,25 120:5 120:9 121:5,11,12 142:15 166:3

valued (18) 9:9 10:14 51:5 53:7 56:2,15 61:19,20 63:8 64:14,22,25 87:16 118:25 121:8 129:15 147:12 159:7

valuer (1) 61:6 valuers (1) 98:13 values (5) 76:9 91:24

93:17 97:11,19 valuing (21) 31:18

38:16,17 44:9 52:24 53:20 56:5 62:12 66:9 70:5 73:4 74:3,7 75:21 117:4 118:5 119:12 121:7,17 128:4 159:2

variables (2) 87:5 177:15

variations (2) 88:12

88:12

varies (1) 134:18 variety (1) 4:10 various (6) 39:10

51:13 117:8 134:22 173:10 179:7

vary (3) 26:25 87:8,10 vast (1) 88:24 vendor (1) 42:4 ventilated (1) 32:16 venture (4) 81:20

128:16 145:24 146:23

verge (1) 134:19 verges (1) 134:25 verified (1) 119:9 verify (1) 4:12 vernacularly (1)

174:19

version (7) 5:12,17,21 6:15,20 119:2,6 vessels (2) 109:11,20

viability (2) 148:20 166:24

viable (5) 147:14 148:9,22 149:23 167:1

vicinity (1) 173:25 view (16) 33:2 60:19

61:25 65:17 67:10 101:7 122:9 123:16 132:22 148:2 154:9 160:6 179:3 183:10 183:14 193:7

viewing (1) 7:18 views (3) 33:14 61:10

68:9

village (4) 5:24 27:16 28:12,13

Vinarskaya (1) 19:19 visited (1) 185:23
Vodoslivnoy (1)

130:17 volt (1) 28:16

Vosstaniya (1) 161:13

Voyager (3) 84:13,14

84:15

VPGA4 (1) 58:4

Vyborg (23) 12:15

16:4 19:2,17 22:20 22:22,25 23:3,9,16 27:21 28:8,9,21 29:17 152:18,20 153:19 154:22 156:11,11,17 157:5

Vyborgsky (1) 8:11

W

wags (1) 71:20 waiting (3) 108:23,23
109:5

walls (1) 107:22 want (45) 4:2,7 5:3,12

6:18,19,20,25 13:3 13:6,19,21 17:6 22:8 26:23 33:24 34:7 45:2 51:8 54:12 62:15 64:12 69:17 70:11 72:7 78:2 92:21 96:5 99:23 123:4 152:9 158:1,11,17 165:6 174:24,25 175:4,5 175:20,25 176:6 183:3 185:20 187:19

wanted (8) 38:3 40:17 42:18 77:7 79:10 149:8 185:25 192:14

wanting (1) 118:14 wants (7) 4:1 78:22

79:16 118:3 132:12 190:6 192:23

warehouse (11) 55:1 67:13 79:16,18 143:4 174:20,24 175:4,25 176:5,10

warehouses (2) 118:5 175:18

warehousing (1)

137:13

warned (1) 190:20 wary (1) 190:8 wasn’t (10) 2:2 31:11

33:21 38:23 43:15 43:17 104:9 109:16 117:1 184:16

waste (2) 34:12 35:7 water (17) 23:14 46:8 128:10 129:14 131:23 132:16,17

135:14,19,22,24 willy (1) 154:6
136:4,9,13,15 wish (6) 33:5 34:1,4
137:7 166:21 184:10 186:10
waterfront (6) 68:9 187:1
127:16 128:8 129:9 wishes (2) 179:1
129:10,13 186:5
way (44) 9:5,6 11:5 witness (13) 1:10,21
12:20 25:6 28:8,9 2:19 3:3,9 4:17
28:22 32:14 36:12 32:23 33:11 118:24
44:1 56:7 61:6 120:18 121:4
64:25 66:7 68:1 148:14 181:17
76:13 92:8 95:21 wonder (2) 17:13
97:15 105:1,2 163:24
106:2 111:13 113:1 wonderful (1) 101:17
117:12,15 134:4,11 wondering (1) 17:8
137:9,11 139:16 word (2) 5:14 77:16
156:17 157:9,17 words (10) 7:8,8 15:7
171:7 172:11 177:1 38:19 44:10 158:3
177:18 180:14 165:25 166:5,15
189:10 190:10 180:24
191:8,11 work (10) 25:25 35:11
ways (4) 39:10 112:17 49:20 64:20 66:6
176:24 179:11 70:24 97:14 149:8
we’ll (2) 81:12 193:14 191:5 193:17
we’re (3) 24:12 117:1 worked (1) 128:20
128:5 working (7) 16:6
we’ve (3) 85:14 113:8 46:22 48:16 142:5
157:25 145:14 146:15
website (17) 1:15 2:2 151:22
2:11,13 3:6,10,12 works (1) 23:18
4:5 5:1 9:16,18 world (10) 21:23
10:22 11:19 17:7 31:13 76:19 86:4
144:20,23 145:17 88:14 90:11 100:25
websites (5) 3:22 4:11 102:7,14,15
11:17,18 24:14 world’s (1) 91:12
wedge (1) 172:6 worldwide (3) 102:5
Wednesday (1) 102:20,25
191:21 worried (1) 160:7
week (11) 83:2 85:12 worth (11) 38:19 39:9
179:2,6 189:21,23 39:10 75:10,12
189:24 190:1,17 82:7 83:16 118:2
191:21,24 170:4 184:14
weekend (1) 191:22 191:25
weight (4) 128:1 worthwhile (1) 80:22
155:4 172:20 wouldn’t (31) 7:21
181:11 9:18 63:25 66:1
welcome (1) 177:23 67:11,13 69:4
wells (1) 23:15 72:22 77:6,8 78:2
went (3) 144:4 176:16 79:5 82:2 90:9 91:8
176:23 92:1 95:20 113:3
weren’t (1) 117:25 125:3 126:5 129:9
west (1) 90:16 130:7 137:23 139:7
western (33) 41:18 148:25 164:20
43:12 44:2 49:2,6 170:21 174:22
50:5 53:25 57:12 180:19 181:2 189:7
66:12,12 72:11 wraps (1) 166:12
85:8 86:22 87:3 writing (1) 127:1
92:4 93:6 94:5 96:2 wrong (13) 9:5,21
97:2 99:7 100:10 36:11 37:15 115:20
101:7 102:1,18 123:21 124:1,13,15
103:14 110:23 129:18 131:13
113:20 114:23 148:3 149:5
123:1 164:9 172:23 wry (1) 40:15
193:5,19
wharf (3) 84:4,6,8 X
whatsoever (3) 67:22
68:12 79:8
Y
whichever (2) 53:13
yard (2) 111:20
111:7
112:12
whilst (3) 179:15
Yatvetsky (3) 183:24
184:7 185:19
192:15,23
wide (2) 3:22 4:10
year (22) 11:3 14:18
widely (1) 4:4
14:21,21 15:5
width (5) 131:21
20:22 21:5,13,20
132:14 134:16,19
64:18 83:19 90:17
135:24
90:19 100:13
willing (8) 42:3 51:18
138:25,25 140:10
51:19 62:3,4 71:2,2
140:14,15,19,24
101:3

141:21 yearly (1) 142:16

years (10) 15:3,13,16 20:23 21:14 49:8 115:13 143:8 158:9 174:5

yellow (1) 172:2 yesterday (9) 1:19 2:4

3:5 10:18,19 18:21 19:15 20:6 179:24

yield (1) 94:8 yoked (1) 179:10

Z

Zelenogorsk (1)

127:12

zero (3) 6:2 21:24 98:8

zone (6) 109:19 131:23 132:17 136:13,15 162:10

zones (3) 128:10 135:24 136:5

0

1

1 (12) 29:2 74:5 75:3 84:3 118:25 119:24 121:9,12 144:4 173:9 195:3,4

1,000 (1) 37:17

1.0 (2) 111:4,14

1.2 (1) 122:21

1.1 (2) 54:11 55:3

1.25 (1) 100:12

1.3 (1) 58:6

1.5 (1) 24:5

1.9 (1) 101:21

10 (14) 24:20,21 99:2 100:11 110:19 125:8 131:5 140:10 140:20,25 175:5,16 180:5 185:5

10-kilowatt (1) 28:16

10,000 (1) 152:15

10.30 (2) 192:23 193:1
10.49 (1) 16:10

10.5 (3) 142:9 143:17 144:25
100 (23) 54:20 55:4 67:2 77:24 78:10 79:17 83:12,24 84:19 85:16,20,23 87:11 96:9 97:9 102:19 106:7,24 115:11 116:1 159:6 159:17 175:9

100/105 (1) 104:18

105 (3) 104:5 105:25 106:1
106 (1) 123:1

108 (1) 37:16

11 (10) 87:9,16 125:17,24 127:19 135:5 143:15 144:16 168:12 172:7

11-month (5) 113:16 116:10,21 167:19 169:13

11.7 (1) 46:2

11.16 (1) 46:4

11.85 (1) 54:23

110 (1) 106:7

113 (2) 167:18,19

114 (1) 167:18

115 (2) 122:1,5

11th (1) 180:6

12 (7) 1:1 131:15,25 132:19 134:6 146:4 174:15

12-foot (2) 135:5,7

120 (3) 16:25 17:2
104:22
125 (1) 87:7
127 (1) 188:11
12th (1) 180:7

13 (5) 12:23 29:10 47:6 143:5 164:9

130 (6) 102:2 103:20 105:2,20,24 106:1

14 (2) 87:9 194:21

14.76 (1) 10:13

140 (2) 87:8 104:4

148,650 (1) 35:14

15 (15) 22:21,22,24 23:2,9,13,14 29:2 49:8 100:11 108:24 138:4,5,10 156:12

159 (1) 103:22

16 (4) 108:22,24 109:19 123:2

163 (1) 195:10

168 (1) 195:11 16th (1) 1:9

17 (2) 47:1 164:4

178 (1) 195:12

18 (8) 20:22 21:1,5 37:3,5 43:8 47:11 167:19

195 (3) 140:1,3,4

2

2 (6) 47:16 75:25 119:6 126:24 146:8 163:1

2.00 (2) 122:20,23

2.2 (1) 132:6

2.21 (1) 109:13

2.5 (6) 2:12,14 9:19 10:22 11:2 24:10

2.8 (1) 16:22

2.848 (1) 2:11

20 (4) 21:19 146:10 146:25 185:10

200 (2) 98:8 175:7

2002 (2) 46:21 48:16

2007 (4) 80:24 83:18 85:13 95:10

2007/2008 (1) 149:22

2008 (5) 24:5,7 80:24 80:25 81:11

2009 (3) 54:24 128:24 150:21

2010 (2) 101:20

109:16

2011 (1) 193:20 2011/2012 (2) 81:1

151:3 2012 (5) 43:12 46:23

54:25 128:19 193:20

2013 (2) 189:2 193:20

2014 (2) 47:1 143:25

2015 (16) 2:10 21:20 23:21 24:4,8,10 47:11,16 127:9 140:21,22 143:15 143:21,22,23 144:4

2016 (3) 1:1 140:24 194:21

21 (4) 20:23 21:1,5 122:5

21.3 (1) 55:5

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209
April 12, 2016 Day 37

210 (4) 1:12 3:9 4:17 104:18
213 (2) 3:10 4:17

22 (3) 33:10 37:11 44:2

23 (1) 135:4 23/24 (2) 135:9,10

24 (2) 23:21 122:5

24-foot (1) 135:4

25 (10) 78:3 106:1 131:13 134:1 142:9 142:11,22 145:9 146:1,25

250 (1) 104:20

277,500 (1) 16:21

28 (3) 144:2 162:5 194:10

29 (3) 101:20,22 105:22

3

3 (5) 106:13 124:20 125:16 146:8 189:25

3.35 (1) 182:4

3.5 (4) 134:18 135:5,7 135:8

3.53 (1) 194:19

30 (27) 13:1,8 34:24 34:24,25 35:1,2 54:14 55:7 80:17 81:4,25 83:19 106:2,3 108:6 127:12 131:16 132:7,8,23 133:8 135:1 136:20,21,24 138:3

300 (1) 175:15

33.5 (1) 123:4

35 (3) 16:11 144:3,4

37 (2) 178:7 195:5

37,000 (1) 2:14

3rd (4) 180:6 190:22 192:3 194:6

4

4 (2) 119:11 189:25

40 (10) 13:21 43:6 75:18,19 96:12 97:6 105:1,15 106:2 108:7

40,000 (1) 2:16

42 (1) 149:20

43 (1) 195:6

431,266 (1) 35:17

44 (2) 97:1 106:11

46 (2) 195:7,8

48 (1) 195:9

4th (4) 180:6 190:22 192:3 194:6

5

5 (9) 27:16 81:13 100:15 118:25 119:24 121:9,13 136:19 189:25

5,000 (1) 152:15

5.6 (1) 95:12

50 (1) 176:4

50-metre (1) 136:2

500 (1) 175:15

500,000 (2) 100:14 173:10

529,000 (1) 23:21

5th (4) 180:6 190:22 192:3 194:7

6

6 (5) 36:22 37:2,11 87:9 166:5
60 (2) 81:7 87:7

65 (4) 101:23,25 102:17 144:5

68 (1) 55:2

7

7 (3) 135:8,10 166:6

7,500 (4) 132:2,5 133:24 134:14

7.5 (1) 134:18

70 (4) 81:7 87:7 102:18 144:5

74 (1) 35:11

76 (1) 188:14

8

8 (1) 152:16

8.5 (1) 96:8

80 (1) 144:4

800,000 (2) 54:17 55:6

860 (1) 96:7

8A (1) 29:11

9

9 (4) 38:4 132:9 172:2 194:12
9.1 (1) 168:10
9.30 (2) 1:2 183:21
9.36 (1) 1:4
9.45 (3) 192:19 193:2
194:20

950,000 (1) 74:5

98 (1) 163:19

9th (1) 180:6

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