litigation in london between russian
TRANSCRIPT
Forum shopping why wealthy Russian entrepreneurs prefer litigating in London?
Prepared by Ksenia Udovitskaya and HSE MIB student
Abramovich vs. Berezovsky
1 version (Mr Berezovsky):
• 90th years – Berezovsky, Abramovich and Patrokacishvily were business partners (95 % shares of Sibneft – 50% Abramovich, 25% - other participants) - oral agreement
• Purchase of Rusal (25 % Abramovich, 12,5 % other participants) - trust agreement with Abramovich (Berezovsky was deputy of State)
• Conflict with Putin – authority critics about the sunken submarine Kursk by ORT TV channel (49% shares Berezovsky)
• Sale of shares ORT and Sibneft by pressure to Abramovich by Abu Dhabi sheikh (written agreement with sheikh, oral agreement with Abramovich).
• Sibneft value $18 bln, share of Berezovsky – $4 bln plus share in Rusal $1.5 bln
CLAIM AMOUNT: $5.5 bln
2 version (Mr Abramovich):
• Abramovich and Berezovsky have never been business partners
• Abramovich was novice businessman and Berezovsky and Patrokacishvily were his political protection
• Abramovich bought 100% shares of Sibneft and 50% of shares Rusal
• Berezovsky never owned Subneft and Rusal shares • Money that Abramovich paid Berezovsky were the
price of protection racket• He never heard about sheikh agreement
Source: Forbes
Cherney vs. Deripaska
• The Claimant - Mr Cherney• The Defendant - Mr Deripaska, The Russian aluminium tycoon, RusAl
• According to Cherney, there was an oral agreement (10 March 2001) - Mr Deripaska agreed to hold 20% of the shares in RusAl on trust for him
• According to Deripaska, the arrangement was "krysha" with Deripaska paying Cherney and his mafia partners huge sums of money in return for physical and political protection
Reasons to trial in London claimed by Mr Cherney• Mr Cherney’s well-founded fear• Likelihood of prosecution• ”Distinct possibility that the charges would be
trumped up“• Deripaska's connections with Boris Yeltsin in
the 1990s and currently with Vladimir Putin
Why do claimants want to appeal to English court rather than to Russian one?
Why Russian entrepreneurs are suing in occasion of its Russian commercial relations in England rather than in Russia?
Why does the English court accept their claims for consideration?
What will claimants do with the decision of the English Court if the defendant's assets
are located in Russia?
Why do Russian billionaires, who are not frankness in the Russian courts, go
obediently to a London court and provide detailed evidences that could be called as
“confession”?
1. Where the money – there the courtUK is one of the most popular offshore jurisdictions for oligarchs. Placing a managing company on British Virgin Islands or Isle of Man offer Russian businessmen more attractive tax and registration conditions• Abramovich vs. Berezovsky case: UNITED COMPANY RUSAL PLC (Incorporated under the laws of
Jersey with limited liability) (Stock Code: 486) – Jersey is an island in strait of the English Channel Deripaska and Leonid Blavatnik are also prefer UK offshore legislation. The last one made investment in oil production and copper production
2. Safety place to liveA fifth of all real estate objects in London worth more than 5 million has been bought by Russian clients. Oligarchs feel that accusations will not be taken into account by courts and authorities. If you are in London and you are rich, you will never be extradited back to Moscow Сhichivarkin: «I’ve decided not to go back because I did not want to spend time in prison»
Sources: Fortune.com Jersey: The richest offshore tax shelter of them allKnight Frank report on real estate
3. Plaintiffs problems with Russian law enforcement systemFiling a complaint in a Russian court may be inconvenient
4. Trust to British justice- Due to the fact that English law is a precedent law it can be possible nontrivial
decisions- These decisions enable enforcement in many countries
Litigating reasons in
Interesting factLegal proceedings in the United Kingdom have enriched the English legal vocabulary with new terms like "KRYSHA» and «PONYATIYKA»
• During the dispute with Mr Berezovsky, Mr Abramovich personally and properly explained to the court the term «krysha»
• According to Mr Abramovich, he paid Mr Berezovsky tens of millions of dollars just for a "roof"
• However, Mr Berezovsky has explained to the court in details the meaning of the verb «kinut» that characterizes, in his opinion, the actions of Mr Abramovich
In a similar dispute between the Israeli businessman Mr Cherney and Russian billionaire Mr Deripaska• Legal speeches and documents are full of such terms as
«krysha», «dolya», «obschak», «avtoritet», «vor- v-zakone» and «ponyatiyka»
Other examples
• Yukos vs. Rosneft• BTA Bank vs. Ablyazov• Antonio Gramsci vs. Recoletos• VTB vs. Nutritek • Slutsker vs. Haron Investments
