Boris Abramovich Berezovsky (Claimant) Roman Arkadievich Abramovich (Defendant) Boris Abramovich Berezovsky (Claimant) Hine & Others (Defendants)

JurisdictionEngland & Wales
JudgeMRS JUSTICE GLOSTER, DBE,Mrs Justice Gloster,MRS JUSTICE GLOSTER
Judgment Date31 August 2012
Neutral Citation[2012] EWHC 2463 (Comm)
CourtQueen's Bench Division (Commercial Court)
Docket NumberCase No: 2007 Folio 942
Date31 August 2012

[2012] EWHC 2463 (Comm)

IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION

Before:

Mrs Justice Gloster, DBE

Case No: 2007 Folio 942

Claim Nos: HC08C03549; HC09C00494;

HC09C00711

Between:
Boris Abramovich Berezovsky
Claimant
and
Roman Arkadievich Abramovich
Defendant
Boris Abramovich Berezovsky
Claimant
and
Hine & Others
Defendants

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;

MRS JUSTICE GLOSTER, DBE

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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