Scarred by the aluminium wars, Oleg the oligarch steels himself for a new battle

He's gone from Siberia to Belgravia, but now Russia's second-richest man faces a $300m lawsuit over a joint venture that turned sour

Russia's second-richest man, Oleg Deripaska, is being sued for $300m (£156m) by Britain's billionaire Reuben brothers over a disputed aluminium trading venture, The Independent on Sunday has learnt.

The long-running dispute will revive fading memories of Russia's bitterly fought "aluminium wars", at a time when Mr Deripaska, who is partially based in London, is seeking legitimacy in Britain and an eventual Stock Exchange listing for his giant RusAl aluminium corporation.

The claimant Trans-World Metals - a business formed by David and Simon Reuben and their former Russian business partner, Lev Chernoi - last week requested jurisdiction in a British Virgin Islands (BVI) court to sue Mr Deripaska and his associates for allegedly breaking a joint-venture agreement and illegally diverting assets. Trans-World's claim for lost profits, damages, interest and costs totals $300m.

The dispute dates back to an aluminium trading business venture formed in 1995 in the heady days of Russia's privatisation process. At that time the Reuben brothers, ex-scrap-metal traders who had their own meteoric rise, allegedly brought in the young Mr Deripaska as an agent to buy up shares in the privatisations of Russia's giant Bratsk and Sayansk smelters. But Mr Deripaska rapidly grew powerful in his own right and soon was strong enough to join a 50/50 partnership with Trans-World in an Irish-registered aluminium company Tradalco, which operated "tolling" companies trading at huge profits.

According to the claim, by January 1998 Mr Deripaska "wrongly repudiated" the joint venture with Trans-World - with immediate effect.

The claimants alleged that they subsequently discovered that Mr Deripaska and his associates had diverted assets illegally into "shadow" companies - Alucor Trading SA and Sayana Foil SA - that replicated the BVI companies already operating for Tradalco in the Bahamas. These "mirror" companies, set up without Trans-World's knowledge, had the same names but different registrations and bank accounts. According to the claim document, these companies were "used as part of an unlawful scheme wrongfully to divert joint venture assets".

Since 2000 the Reubens have extricated their business from Russia and now maintain a mere 1 per cent share in the Bratsk smelter. The brothers, said to be worth £2.2bn, instead turned their attentions to high-profile UK property acquisitions such as the Millbank Tower.

Mr Deripaska's lawyers maintain that Tradalco was a jointly owned company and not the outcome of a joint venture agreement. Trans-World admits that the alleged joint venture was agreed orally, but lawyers for Mr Deripaska point out that if there had been a joint-venture agreement, it would have been in writing.

Mr Deripaska's lawyer, Paul Hauser, denied that assets had been diverted, and claimed that Tradalco's assets - currently in provisional liquidation in Ireland - have been "fully accounted for" by liquidators PricewaterhouseCoopers. He claimed that Trans-World was unhappy with the outcome of the case in Ireland and launched another case in the BVI. "It is a case of forum shopping," said Mr Hauser.

If the case goes to a full hearing it could prove an uncomfortable ride for Mr Deripaska, given what it may reveal about his meteoric but turbulent rise to riches.

Like his close friend and ex-business partner Roman Abramovich, Mr Deripaska has sought strong British ties, and is thought to be seeking respectability in English society and a possible haven from Russia's political vicissitudes.

His Anglophile credentials are already good. Mr Deripaska is believed to "weekend" regularly in London, to improve his English. In 2003, the billionaire sponsored the lavish Art of Chess exhibition held at Somerset House, featuring beautiful Fabergé chess sets. His wife, Polina, a member of the Yeltsin clan, was educated at Millfield school in Somerset. Mr and Mrs Deripaska recently bought a £25m grade-I Regency house in Belgravia.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Operations Manager

£30000 - £38000 per annum: Recruitment Genius: They are a financial services c...

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Day In a Page

Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk
Nepal earthquake: One man's desperate escape from Everest base camp after the disaster

Escape from Everest base camp

Nick Talbot was sitting in his tent when the tsunami of snow and rock hit. He was lucky to live, unlike his climbing partner just feet away...
Adopting high fibre diet could dramatically cut risk of bowel cancer, says study

What happened when 20 Americans swapped diets with 20 Africans?

Innovative study in the US produces remarkable results
Blake Lively and 'The Age of Adaline': Gossip Girl comes
of age

Gossip girl comes of age

Blake Lively is best known for playing an affluent teenager. Her role as a woman who is trapped forever at 29 is a greater challenge
Goat cuisine: Kid meat is coming to Ocado

Goat cuisine

It's loved by chefs, ethical, low in fat and delicious. So, will kid meat give lamb a run for its money?
14 best coat hooks

Hang on: 14 best coat hooks

Set the tone for the rest of your house with a stylish and functional coat rack in the hallway
Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?