Oil company threatens to sue Gouldens

Irish oil company Bula Resources has announced that it has threatened court action against City firm Gouldens over a failed venture with Russian company Aki-Otyr.

Gouldens advised on the Aki-Otyr transaction in 1994 and early 1995.

The move comes after Bula was forced to write off large sums due to legal problems over title to its 51 per cent interest in the Russian company.

Following a review of the deal by Clifford Chance, the company is claiming £8.2m as recoverable costs of the transaction plus interest and costs and/or the substantially larger lost value of the Aki-Otyr option, yet to be fully quantified.

The company has invited Gouldens to put forward proposals for settlement on or before 29 August, failing which, Bula has said, legal proceedings will be issued in London.

Bula announced the steps it has taken at its AGM, where angry shareholders demanded an investigation into how Bula lost more than £15m in Russia.

Gouldens senior partner Patrick Burgess refused to comment, saying that the firm never commented on client issues. Clifford Chance, which is dealing with the matter, also refused to comment.