Boris Abramovich Berezovsky (Claimant) Roman Arkadievich Abramovich (Defendant) Boris Abramovich Berezovsky (Claimant) Hine & Others (Defendants)
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE GLOSTER, DBE,Mrs Justice Gloster,MRS JUSTICE GLOSTER |
| Judgment Date | 31 August 2012 |
| Neutral Citation | [2012] EWHC 2463 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2007 Folio 942 |
| Date | 31 August 2012 |
[2012] EWHC 2463 (Comm)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Mrs Justice Gloster, DBE
Case No: 2007 Folio 942
Claim Nos: HC08C03549; HC09C00494;
HC09C00711
Laurence Rabinowitz Esq, QC, Richard Gillis Esq, QC, Roger Masefield Esq, Simon Colton Esq, Henry Forbes-Smith Esq, Sebastian Isaac Esq, Alexander Milner Esq, and Ms. Nehali Shah (instructed by Addleshaw Goddard LLP) for the Claimant
Jonathan Sumption Esq, QC, Miss Helen Davies QC, Daniel Jowell Esq, QC, Andrew Henshaw Esq, Richard Eschwege Esq, Edward Harrison Esq and Craig Morrison Esq (instructed by Skadden, Arps, Slate, Meagher & Flom LLP) for the Defendant
Ali Malek Esq, QC, Ms. Sonia Tolaney QC, and Ms. Anne Jeavons (instructed by Freshfields Bruckhaus Deringer LLP) appeared for the Anisimov Defendants to the Chancery Actions
David Mumford Esq (instructed by Macfarlanes LLP) appeared for the Salford Defendants to the Chancery Actions
Jonathan Adkin Esq and Watson Pringle Esq (instructed by Signature Litigation LLP) appeared for the Family Defendants to the Chancery Actions
Hearing dates: 3 rd– 7 th October 2011; 10 th– 13 th October 2011; 17 th– 19 th October 2011; 24 th & 28 th October 2011; 31 st October – 4 th November 2011; 7 th– 10 th November 2011; 14 th - 18 th November 2011; 21 st– 23 November 2011; 28 th November – 2 nd December 2011; 5 th December 2011; 19 th & 20 th December 2011; 17 th– 19 th January 2012.
Further written submissions: 26 th January 2012; 1 st February 2012; 2 nd February 2012; 7 th February 2012; 6 th March 2012; 13 th March 2012;
| Section I—Introduction | 11 |
| The Sibneft claim | 11 |
| The RusAl claim | 13 |
| Summary of Mr. Abramovich's defence in relation to the Sibneft claim | 15 |
| Summary of Mr. Abramovich's defence in relation to the RusAl claim | 16 |
| Connection between the two claims | 17 |
| Procedural chronology of the Commercial court action | 18 |
| Section II—The issues which the court has to determine in the Commercial court action | 19 |
| Agreed List of Issues | 19 |
| Liability issues only to be determined | 19 |
| The liability issues | 19 |
| A.Sibneft | 19 |
| B.RusAl | 20 |
| Section III—The Chancery actions | 21 |
| The claims made in the Chancery actions | 21 |
| The Overlap Issues | 22 |
| Section IV—Representation | 24 |
| Section V—Documentation and case materials | 24 |
| Section VI—Factual background | 25 |
| Russian context | 25 |
| Relevant events in Russia from late 1980s to May 2000 | 26 |
| Krysha | 28 |
| Mr. Berezovsky's personal and business history up to 1994—the relevant corporate entities and associates involved | 32 |
| Mr. Berezovsky's personal background | 32 |
| LogoVAZ | 32 |
| Anros and Forus | 33 |
| Consolidated Bank | 33 |
| Andava | 34 |
| Mr. Berezovsky's political career | 34 |
| Mr. Berezovsky's business and political contacts | 35 |
| The LogoVAZ club | 36 |
| ORT | 37 |
| Mr. Berezovsky's public profile | 38 |
| The alleged joint venture between Mr. Berezovsky and Mr. Patarkatsishvili | 38 |
| Additional relevant events in relation to Mr. Berezovsky and Mr. Patarkatsishvili not directly connected with the issues in the case | 39 |
| Section VII—Approach to the evidence | 41 |
| Significant features of the case | 41 |
| Credibility of the principal witnesses | 43 |
| Mr. Berezovsky | 43 |
| The evidence of Mr. Berezovsky's witnesses | 51 |
| Mr. Abramovich's evidence | 52 |
| Mr. Abramovich's witnesses | 54 |
| Allegations of non-disclosure | 55 |
| The absence of certain witnesses | 55 |
| Mr. Anisimov | 56 |
| Mr. Anisimov's witnesses | 56 |
| Executive Summary and conclusion on credibility | 56 |
| Section VIII—Determination of Issue A1 | 56 |
| Were agreements made, in 1995 and 1996, between Mr. Abramovich on the one hand and Mr. Berezovsky and Mr. Patarkatsishvili on the other in regard to a 50:50 share in the interests of Sibneft? | 56 |
| Introduction | 56 |
| Common ground in relation to the 1995 arrangements, and areas of dispute | 57 |
| Executive summary of my conclusion on Issue A1 | 58 |
| Mr. Berezovsky's pleaded case about the making of the alleged 1995 Agreement | 60 |
| Mr. Berezovsky's pleaded case about the making of the alleged 1996 Agreement | 61 |
| Mr. Berezovsky's evidence about the making of the alleged 1995 Agreement | 62 |
| The alleged partnership allegation | 63 |
| The alleged share of "the profits" | 65 |
| Alleged terms in relation to future business | 66 |
| The alleged term in relation to restrictions on sale of Sibneft shares | 67 |
| Mr. Berezovsky's evidence about the making of the alleged 1996 Agreement | 67 |
| Mr. Abramovich's pleaded case about the making of the alleged 1995 Agreement | 69 |
| Mr. Abramovich's pleaded case about the making of the alleged 1996 Agreement | 70 |
| Mr. Abramovich's evidence about the making of the alleged 1995 Agreement | 70 |
| Mr. Abramovich's evidence about the making of the alleged 1996 Agreement | 76 |
| The circumstantial evidence alleged by each side to support their case | 76 |
| Circumstantial evidence – the relevant topics | 78 |
| Analysis of the circumstantial evidence | 79 |
| i)The relationship between Mr. Berezovsky and Mr. Abramovich | 79 |
| The Early Meetings | 79 |
| Mr. Abramovich's history prior to 1995 | 80 |
| The ongoing relationship between the two men | 82 |
| ii)The conduct of the parties between 1995 and 2000 | 84 |
| (a)the creation of Sibneft | 84 |
| The first stage – the formation of Sibneft | 85 |
| The second stage – the loans-for-shares programme applied to Sibneft | 87 |
| The third stage: the auction of the right to manage a 51% Shareholding in Sibneft in 1995 | 88 |
| The extent of Mr. Berezovsky's contribution to the financing of the bid | 93 |
| The fourth stage—the first cash auction in late 1995/early 1996 | 96 |
| The fifth stage – the second cash auction in September 1996 | 97 |
| The sixth stage – the third cash auction held on 25 October 1996 | 98 |
| The seventh stage—the auction of the State's 51% holding in Sibneft in 1997 | 99 |
| The percentage of Sibneft owned by the public | 102 |
| The transformation of Sibneft | 102 |
| Conclusion in relation to the conduct of the parties between 1995 and 2000: (a) | 102 |
| iii)The timing of the arrangements between the parties | 105 |
| iv)The absence of any written record | 108 |
| Conclusion as to the absence of a written agreement | 110 |
| Mr. Berezovsky's claim that it was at Mr. Abramovich's insistence that there was no written agreement | 114 |
| v)Mr. Berezovsky's purpose at the time of the alleged 1995 Agreement | 114 |
| Conclusions in relation to Mr. Berezovsky's purpose | 119 |
| vii)The alleged 1996 Agreement | 119 |
| Conclusion on the alleged 1996 Agreement | 125 |
| (viii) The conduct of the parties between 1995 and 2000 (b): whether any payments were made to Mr. Berezovsky and/or Mr. Patarkatsishvili prior to 1996 | 127 |
| The conduct of the parties between 1995 and 2000 (c): the nature of the payments of the payments made to Mr. Berezovsky and/or Mr. Patarkatsishvili between 1995 and 2000 | 127 |
| General evidence about the payments made from 1995–2000 | 129 |
| Conclusion as to whether any payments were made to Mr. Berezovsky and/or Mr. Patarkatsishvili prior to 1996 | 131 |
| Conclusion on whether the payments made to Mr. Berezovsky and/or Mr. Patarkatsishvili between 1995 and 2000 were referable to 50% of Sibneft's profits or the profits of Mr. Abramovich's Trading Companies | 136 |
| My conclusions on calculation and correlation | 137 |
| No correlation to Sibneft's profits | 137 |
| No proof of improper transfer or diversion | 138 |
| No actual correlation to 50% of the profits of Mr. Abramovich's Trading Companies | 142 |
| Lack of certainty as to which profits Mr. Berezovsky was entitled | 144 |
| No attempt to conduct any correlation exercise | 145 |
| No correlation in timing, amounts or methods of payment | 147 |
| No correlation demonstrated by the Bolshoi Balance | 151 |
| The fact that payments were made to both Mr. Berezovsky and Mr. Patarkatsishvili not persuasive as support for Mr. Berezovsky's case | 154 |
| x)The Le Bourget transcript | 155 |
| Background | 155 |
| Mr. Berezovsky's submissions | 158 |
| References to $30 million coming from "aluminium"—Box 29 and following | 158 |
| References to the possibility of Mr. Berezovsky and Mr. Patarkatsishvili being registered as shareholders in Sibneft and receiving dividends | 160 |
| Mr. Abramovich's references to 44% of the Sibneft shares being held "in trust with the management" | 165 |
| Conclusion on the Le Bourget transcript | 168 |
| xi)The belief of Mr. Berezovsky and others as to his entitlement to an interest in Sibneft | 168 |
| Introduction | 168 |
| Mr. Berezovsky's and Mr. Patarkatsishvili's belief and the alleged "concession" by Mr. Abramovich as to such belief | 170 |
| Public statements made by Mr. Berezovsky and others prior to 27 June 2001 | 175 |
| Mr. Berezovsky's formal position in relation to Sibneft | 176 |
| Media reporting prior to 27 June 2001 | 176 |
| The Eurobond Offering Circular issued on 14 August 1997 | 177 |
| Forbes litigation | 184 |
| Other statements made by Mr. Berezovsky in press interviews prior to 27 June 2001 | 187 |
| Press announcement made by Mr. Berezovsky on 27 June 2001 | 187 |
| Private statements made by Mr. Berezovsky and Mr.... |
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