Russian retribution

A handful of warring Russians continue to feed London’s litigation boom.


Chelsea FC owner Roman Abramovich
Chelsea FC owner Roman Abramovich

Earlier today the Court of Appeal (CoA) rejected a bid by Chelsea FC owner Roman Abramovich to have £1.8bn of claims brought against him by Boris Berezovsky thrown out because, his legal team argued, they were unlikely to succeed.

The CoA said it found the first instance decision handed down by Mr Justice Coleman to be “meticulous” and told Abramovich he would need to answer allegations of coercion in London’s High Court (see story).

With all other avenues for a strike-out cut off to Abramovich, it seems both sides are set for one of the hardest fought litigation battles of the last decade. But getting to this point has been no mean feat.

Berezovsky told the world of his plans to sue his former business partner back in 2005. Yet it was more than two years before the claim was actually served and that incident alone has become synonymous with the case.

Getting the claim into Abramovich’s hands was always going to be difficult. It is understood that, flanked by a group of minders, Berezovsky drove around Mayfair with the documents sealed inside the glove compartment of his Maybach limousine so he could hand it over personally.

Berezovsky finally got his chance when he spotted his rival heading into Sloane Square’s Hermes store. A scuffle broke out as Abramovich’s bodyguards moved to protect him, but it was no use and the claim was formally launched in 2007.

Abramovich, not short of a bob or two, instructed Skadden Arps Slate Meagher & Flom partner Paul Mitchard QC, who is widely regarded as one of the best litigators in the world, to represent him. Mitchard brought in Brick Court’s Andrew Popplewell QC to lead the advocacy.

Meanwhile, Addleshaw Goddard secured Berezovsky as a client, instructing One Essex Court’s Laurence Rabinowitz QC.

At the centre of the spat are allegations from Berezovsky that Abramovich coerced him  into selling his 21.5 per cent share in Russian oil company Sibneft at a significantly reduced price.

According to Berezovsky, in the 1990s the pair had teamed up with Georgia’s richest man, Arkadi “Badri” Patarkatsishvili, to buy Sibneft. They agreed that Abramovich would own half of the business while Berezovsky and Patarkatsishvili would share the other half, with Abramovich holding their shares in trust.

Abramovich disputes this and argues that in fact any payment to Berezovksy, his former mentor, was in recognition of his “political assistance and protection” during the creation of Sibneft. He denies that Berezovsky or Patarkatsishvili ever had an interest in the business.

The first attempt to have the claim struck out failed last March when Mr Justice Coleman stated: “Weak as some of BB’s [Boris Berezovsky’s] case certainly appear the complexity and multiplicity of issues makes this exactly the kind of claim which is unsuitable for applications under CPR3.4.”

The fight continued to the CoA and, in November, The Lawyer revealed that Addleshaws had agreed to share the risk on the case by acting on a conditional fee arrangement (CFA) for Berezovsky.

The gamble has paid off so far. The CoA’s ruling in favour of Berezovsky will see the first instalment of fees handed over to the firm just before the financial year-end.

Addleshaws is not the only one to feel the financial boost. According to a source close to the case, the brief fees secured by barristers’ clerks for the counsel involved are “eye watering” and run to several million. One Essex Court, Brick Court and Fountain Court, which has several juniors involved in the matter, will all get their millions out of the matter.

Many observers believed that because the case was being carried out on a CFA basis it would most certainly settle before the 12-week hearing in October. However, such is the intensity of the row that those close to the case believe it will almost certainly be argued out in court.

Russian retributions may wreak havoc, but for the lawyers involved it is time to bloom.