Key Facts
- •Revetas Capital Advisors LLP (RCA) is a limited liability partnership with members including the Claimants, Kiril Klaturov and KMKH EOOD.
- •The Claimants claimed unpaid compensation and a share of RCA's profits.
- •The Claimants' claim for unpaid compensation was based on alleged agreements outside the LLP agreements.
- •The Defendants argued that member remuneration was solely governed by the LLP agreements and conditional on sufficient profits.
- •The 2016 and 2020 LLP Agreements contained clauses defining profit and loss allocation and member entitlements.
- •The Claimants relied on several documents (Supporting Documents) as evidence of a contractual agreement for unconditional compensation.
Legal Principles
LLPs are governed by statute (LLP Act 2000) and their members' rights and duties are determined by agreement or default rules (LLP Regulations 2001).
Limited Liability Partnerships Act 2000, Limited Liability Partnerships Regulations 2001
In the absence of a contrary agreement, a member's rights, including profit sharing, end upon ceasing to be a member.
Reinhard v Ondra LLP [2015] EWHC 26 (Ch)
Generally, partners are not entitled to remuneration for services rendered to the firm unless expressly agreed; such agreements should clearly state whether remuneration is payable irrespective of profitability.
Lindley & Banks on Partnership
Gestmin is not authority for disregarding witness testimony; findings of fact must be based on all evidence.
Kogan v Martin [2019] EWCA Civ 1645
Where a contract is silent on the time for performance, the law implies performance within a reasonable time, but this does not apply to conditional obligations.
Marks and Spencer Plc v BNP Paribas Securities Service Trust Co (Jersey) Ltd [2016] A.C. 742; The Interpretation of Contracts
Outcomes
The Claimants' claim for unpaid compensation was dismissed.
The court found that the only contractual terms governing remuneration were those in the LLP Agreements, specifically clause 8, making compensation conditional on sufficient distributable profits and a decision to distribute.
An account is to be taken of the Claimants' profit share under clause 8 of the LLP Agreements.
A genuine dispute exists regarding the determination and distribution of profits, requiring an account to determine the Claimants' entitlement.