Vannin Capital to fund £450m case against Credit Suisse

Litigation funder Vannin Capital has stepped up to fund a High Court battle between the owner of the largest oil and gas project in Azerbaijan and Credit Suisse International (CSI).

Private equity-backed Vannin is pumping some of its £100m litigation fund into the case launched by Dr Zaur Leshkasheli’s against CSI – a subsidiary of Credit Suisse – over breach of contract and negligence relating to the sale of Caspian Energy Group, a company with rights to an oil and gas field project.

The damages sought by Dr Leshkasheli add up to more than £450m. If successful Vannin would take a chunk of that sum.

The company is shouldering the financial risk by paying the legal fees for Caspian Energy Group, which is advised by Gordon Dadds partner Laurence Cartier who instructed Maitland Chambers’ Anthony Trace QC to lead 11 Stone Buildings Edward Cohen.

Caspian is the energy company owned by Leshkasheli put on the market by the bank in 2007. He claims that the bank failed to seek out the best price for the company, which had rights in a joint venture with the State Oil Company of Azerbaijan Republic for the largest onshore oil and gas project in the country.

The sale was completed for $245 million in February 2008. The claimants allege the price substantially below the true and proper market value.

Credit Suisse has instructed Herbert Smith Freehills (HSF) partner Damien Byrne Hill to defend the claim alongside Brick Court’s Helen Davies QC, who is leading Alec Haydon.

 The post-Jackson climate has seen a boom in third-party funders offering up cash and the prospect of risk-sharing in high-profile disputes.

Vannin launched in 2010 and by 2011 had just £8m to fund seven claims. By the end of 2012 Vannin had quadrupled its litigation fund from £25m to £100m to meet growing demand (6 May 2012).

Funders like Harbour Litigation Fund and Burford Capital have both ramped up their offering over the last year, with Burford launching a new hybrid Damage Based Agreement (DBA) fund in recent months.