Berezovsky v Abramovich

JurisdictionEngland & Wales
JudgeTHE HONOURABLE SIR ANTHONY COLMAN,SIR ANTHONY COLMAN
Judgment Date31 March 2010
Neutral Citation[2010] EWHC 647 (Comm)
Docket NumberCase No: 2007 Folio 942
CourtQueen's Bench Division (Commercial Court)
Date31 March 2010

[2010] EWHC 647 (Comm)

IN THE HIGH COURT OF JUSTICE

Royal Courts of Justice

Strand, London, WC2A 2LL

Before: The Honourable Sir Anthony Colman

Case No: 2007 Folio 942

Between
Boris Abramovich Berezovsky
Claimant
and
Roman Arkadievich Abramovich
Respondent

Laurence Rabinowitz QC, Richard Gillis QC, Andrew George and Simon Colton (instructed by Addleshaw Goddard) for the Claimant

Andrew Popplewell QC, Helen Davies QC and Andrew Henshaw (instructed by Skadden) for the Respondent.

1

Hearing dates: 20–24 July and 2–12 November 2009

2

Final Judgment

3

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE SIR ANTHONY COLMAN
4

JUDGMENT OF THE HON

SIR ANTHONY COLMAN
5

SITTING AS A DEPUTY

6

JUDGE OF THE HIGH COURT

7

Introduction

8

1. There are before the court two applications. The Defendant, Mr. Roman Abramovich, to whom I shall refer throughout as “RA”, applies (1) to strike out the claim against him by Mr. Boris Berezovsky, to whom I shall refer as “BB”, under CPR 3.4(2)(a) ? “the statement of case discloses no reasonable grounds for bringingthe claim” ? and under CPR 3.4(2)(b) ? “the statement of case is an abuse of the court's process” ? or (2) for summary judgment against BB on the whole of his claim under CPR 24.2 on the grounds that (a) BB has no real prospect of succeeding on the claim and (b) there is no other compelling reason why the case should be disposed of at a trial.

9

2. The Claimant, BB, applies for permission to amend his Particulars of Claim and Reply in various distinct respects. He does so ? as so frequently occurs in the face of a defendant's strike out or summary judgment application ? in order to attempt to improve upon his case, as originally advanced, by addition or clarification in the light of the defendant's criticisms. In the present case the amendment application is partly opposed on the grounds that it seeks to introduce new causes of action which are time-barred and/or that some of the proposed amendments are intrinsically lacking in any real prospect of success and/or that the attempt to introduce them at such a late stage is an abuse of process.

10

3. Where, as in this case, a claimant applies to amend his case in the face of a strike-out or summary judgment application the usual approach is for the court to decide whether to give permission for those amendments and then decide the defendant's applications with reference to the statement of case amended to the extent, if any, permitted by the court, but subject always to such special orders as to costs as may be appropriate in view of the late introduction of those amendments which have been permitted.

11

4. Accordingly, since the issues as to strike out and Summary judgment have to be determined on the basis of the Statement of Case and Reply amended to such extent, if any, as the amendment application may succeed, it is necessary first to decide that amendment application and then to determine the strike-out and summary judgment applications. Since a major ground upon which RA challenges BB's amendment application is the lack of any realistic prospect of success of the allegations in their amended form ? a ground also mainly relied upon in respect of the original pleadings before introduction of the amendments, it will first be necessary to explain in some detail the factual basis which has given rise to the disputes between the parties.

12

The Factual Background as relied upon by BB.

13

5. According to BB, until 30 th October 2000, he was a businessman in Russia with extensive commercial interests. These included a company ? ZAO LogoVaZ ? carrying on the business of servicing and selling motor vehicles, a 50 per cent interest in ZAO ORT-KB which in turn owned 38 per cent of OAO-ORT ?a Russian Public Television company, another channel ? TV6 ? three Russian newspapers and a 21.5 per cent interest in OAO Siberskaya Neftyanaya Kompaniya, a Russian oil company, to which I refer as “Sibneft.”

14

6. In addition to his business activities, BB had been heavily involved in Russian politics. He had been a strong supporter of and on good terms with President Yeltsin and had been Deputy Secretary of the Russian Security Council (October 1996 to November 1997), Executive Secretary of the Commonwealth of Independent States, the CIS, which was the successor umbrella organisation to the Soviet Union (April 1998 to April 1999) and an elected member of the Duma from 1999 until July 2000.

15

7. The television Company, ORT, had been part-privatised by Presidential Decree in December 1994, as a result of which 49 per cent of that company was sold to the private sector, including a substantial proportion to BB with the result that Mr Arkadi Patarkatsishvili (to whom I shall refer as “AP”), who was a close business associate of BB, became First Deputy General Manager. ORT's television channel was the leading Russian television channel. By 1998 BB and AP had acquired control of the entire privatised 49 per cent of ORT through ZAO ORT-KB and LogoVaZ. BB to some extent used Channel One operated by ORT as his political mouthpiece.

16

8. Following the resignation of President Yeltsin (31 st December 1999), Vladimir Putin, then Prime Minister, took over control of the country and, having won the presidential election, was inaugurated as President on 17 th July 2000. Although BB had supported Mr Putin for the Presidency, he subsequently openly criticised the government's policies in the media and in August 2000 publicly declared his intention to form a movement of “constructive opposition” to President Putin's administration.

17

9. On 12 th August 2000 the Russian submarine KURSK was tragically lost in the Barents Sea and all the crew perished. Channel One was highly critical of the government's handling of the disaster. At a meeting in Moscow with one Alexander Voloshin, Chief of the Presidential Administration, which took place later in August 2000, BB was informed that President Putin wished to take control of the management of ORT and that BB should therefore surrender or procure the surrender of ORT-KB's and LogoVaz's shareholdings to the state or to an acceptable body and if he failed to do so, he “would end up like Vladimir Gusinsky.” The latter, who controlled a private television network (NTV), had on 13 th June 2000 been arrested and imprisoned having been charged with fraud. Three days later he was released and the charges were dropped upon his signing an agreement to sell his shareholding in the company controlling NTV against a promise by the Minister for Press, Television, Radio Broadcasting and Media Communication that the charges would be dropped. In the European Court of Human Rights in Gusinsky v Russia, Application 70276/01, this conduct of the Russian Government was subsequently not surprisingly condemned as a serious violation of Articles 5 and 18 of the European Convention on Human Rights.

18

10. In the course of that meeting with Mr. Voloshin, BB asked to meet President Putin. This meeting took place on the following day. President Putin repeated the demand for the transfer of the shares, confirmed that he wished to manage ORT personally and confirmed that BB would be imprisoned if he did not agree.

19

11. Shortly after this meeting AP was required to meet President Putin by whom he was told that the President wished BB and AP to “clear out” of ORT and that he must negotiate to sell the shares. A price was subsequently offered to AP but BB refused to sell and in September 2000 he made a public announcement that in order to preserve the independence of ORT from the government, he would put the shares into a trust. His relations with the President got worse and on 30 th October 2000 he left Russia for France. In the event the trust was not created.

20

12. On 7 th December 2000 one Nicolai Glushkov, a close personal friend and business associate of BB and AP, was arrested. From 1996 to 1998 he had been First Deputy Director General of Aeroflot. He subsequently helped BB and AP to set up LogoVaZ, as part owner of ORT, and became its first financial manager. He was not in good health but was imprisoned in the harsh environment of Lefortovo Prison operated by the Federal Security Service. He has, it is alleged, consistently denied the charges regarding his administration of Aeroflot.

21

13. In December 2000, according to BB, there took place a meeting at BB's home in Cap d'Antibes, France, between BB, AP and RA. These three had an existing business relationship relating to the oil and gas company called Sibneft, referred to above. In the course of that meeting RA stated that he had come on the orders of the President and Mr Voloshin, that BB and AP had to sell their interests in ORT immediately, and if they did so, Mr Glushkov would be released from prison and they would be paid US$175 million but, if they refused to do so, Glushkov would remain in prison for a very long time and the President would seize their interests in ORT. BB says that he and AP had no alternative but to sell their interests for that price which represented a substantial undervalue. That is what they did, but Mr Glushkov was not released.

22

14. I interpose that RA denies that any such conversation took place. He says that some time before 25 th December 2000 at a venue which he cannot remember he met with BB and AP and was told by BB that he wanted to sell his interests in ORT and that BB invited RA to purchase them for a price of US$150 million which RA assumed also to cover AP's interests. RA says that he eventually agreed to pay them $175 million ? an amount in excess of the true value of those interests and that the interests of BB and AP were sold to companies controlled by RA. It is denied by RA that the Russian state was operating...

To continue reading

Request your trial
14 cases
  • Yukos Capital S.a.r.L (a company incorporated in the Luxembourg) v OJSC Rosneft Oil Company (a company incorporated in the Russian Federation)
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • June 14, 2011
    ...only arises where that embarrassment has been certified by the Foreign and Commonwealth Office. 150See, for these distinctions, Berezovsky v Abramovich [2011] EWCA Civ 153 at [87] and [100]. 151 “Pure” Act of State principle 152 114. The development of the principle of Act of State was con......
  • Yukos Capital Sarl v OJSC Rosneft Oil Company
    • United Kingdom
    • Court of Appeal (Civil Division)
    • June 27, 2012
    ...v National Westminster Bank plcELR [1991] 2 AC 93. Banco Nacional de Cuba v Sabbatino (1964) 376 US 398. Berezovsky v AbramovichUNK [2010] EWHC 647 (Comm); [2011] EWCA Civ 153; [2011] 1 CLC 359; [2011] 1 WLR 2290. Blad v BamfieldENR (1674) 3 Swans 604; 36 ER 992. Buck v A-GELR [1965] 1 Ch 7......
  • Berezovsky v Abramovich
    • United Kingdom
    • Court of Appeal (Civil Division)
    • February 23, 2011
    ...Boris Abramovich Berezovsky Respondent and Roman Arkadievich Abramovich Appellant [2011] EWCA Civ 153 [2010] EWHC 647 (Comm) & [2010] EWHC 1511 (Comm) The Honourable Sir Anthony (Sitting as a Deputy High Court Judge) Before: the Right Honourable Lord Justice Laws The Right Honourable Lord J......
  • Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Ioannis Kent (Aka John Kent)
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • February 22, 2018
    ...(nor in any other authority cited) did the question whether duress is actionable as a tort actually arise for decision and in Berezovsky v Abramovich [2010] EWHC 647 (Comm), para 191, Colman J described this as “a difficult but developing area of law”. The editors of Chitty on Contracts (3......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT