Roman Abramovich won a lawsuit seeking about $6.8 billion over claims he intimidated Boris Berezovsky into selling shares in two Russian oil and metal companies for far less than they were worth.
Judge Elizabeth Gloster in London ruled Friday that Abramovich didn’t make express or implied threats to force Berezovsky to dispose of interests in oil company OAO Sibneft. Both sides accused each other of dishonesty and greed during the three-month trial.
“I found Mr. Berezovsky an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept,” Gloster said.
“At times, the evidence which he gave was deliberately dishonest; sometimes he was clearly making his evidence up as he went along in response to the perceived difficulty in answering the questions in a manner consistent with his case.”
The trial exposed the business practices of a small group of extremely wealthy Russians who profited from the fall of the communism and privatization of a number of the country’s largest energy companies. Abramovich, the 45-year-old owner of the Chelsea Football club in London, sold his stake in gas pipeline giant Gazprom OAO in 2005 for about $10 billion.
Berezovsky said following the verdict that he was “amazed” by the ruling and that he hadn’t made up his mind about an appeal.
Gloster “tried to rewrite Russian history,” he said outside the courthouse.
During the trial, which ended in January, lawyers for Berezovsky said their client received hundreds of millions of dollars from Abramovich before a final payment of $1.3 billion in 2002. Berezovsky claimed the money was for his share of Sibneft, and aluminum assets which became part of United Co. Rusal Plc. Abramovich denied the 66-year-old Berezovsky owned a stake and said he was paying for political protection, or krysha.
Gloster said the $1.3 billion was a “final lump sum payment in order to discharge what Mr. Abramovich regarded as his krysha obligations.”
The former friends and business partners split when Berezovsky fled Russia in 2000 after a falling out with Prime Minister Vladimir Putin.
“Sometimes I think Putin himself wrote that judgment,” Berezovsky said.
The disputed verbal agreements were made in a series of meetings at luxury hotels and ski resorts.
Berezovsky, the co-founder of Logovaz News Corp. and former adviser to President Boris Yeltsin, received hundreds of millions of dollars from Abramovich.
Abramovich, whose current estimated net worth is $14 billion according to Bloomberg’s Billionaires Index, made much of his fortune through the privatization of Sibneft after the fall of the Soviet Union.
On top of settling a personal dispute between the two former business associates, the verdict issued by Gloster is the first by a British court to give guidance on dealing with the large, undocumented krysha payments by Russian businessmen.
The trial, which ended in January, took hundreds hours of court time, cost millions of pounds in legal fees and included Rusal founder Oleg Deripaska as a witness.
The case is: Berezovsky vs. Abramovich, High Court of Justice, Queen’s Bench Division, Commercial Court Case No. 09- 1080.