Roman Abramovich's explanation 'incoherent'

Chelsea Football Club owner Roman Abramovich offered "incredible and incoherent" explanations for paying a Russian oligarch 1.3 billion US dollars, lawyers told a High Court judge.

The Russian billionaire's explanations for paying the "huge sum" to oligarch Boris Berezovsky were "contradictory" and "obviously insufficient", it was alleged during a trial at the Commercial Court in London.

Mr Berezovsky, 65, is suing Mr Abramovich, 44, for billions of pounds and was today giving evidence on the fifth day of the trial.

He says the Russian billionaire businessman "betrayed" him and "intimidated" him into selling shares in Russian oil company Sibneft for a "mere 1.3 billion" dollars (£800 million) - "a fraction" of their true worth".

Mr Berezovsky alleges breach of trust and breach of contract and is claiming more than £3 billion in damages.

Mr Abramovich denies the allegations and denies that Mr Berezovsky is entitled to damages.

He says Mr Berezovsky was paid millions of pounds for his services as a "political godfather" but was not a business partner.

A lawyer representing Mr Abramovich suggested to judge Mrs Justice Gloster that on one occasion "five million in dollar bills" was delivered to Mr Berezovsky - an allegation Mr Berezovsky denied.

In written submissions presented to the judge, Laurence Rabinowitz QC said Mr Berezovsky's claim was that he and Mr Abramovich - plus a third businessman - agreed to create Sibneft out of two "state enterprises" in 1995.

He said Mr Berezovsky guaranteed the repayment of a 100 million dollar loan used to secure the acquisition.

Mr Rabinowitz said Mr Berezovsky left Russia in 2000, after falling out with then president Vladimir Putin, and claimed that Mr Abramovich "threatened and intimidated" him into giving up his interest in Sibneft for a "mere 1.3 billion" United States dollars - "a fraction of its true worth".

He said the judge would be able to consider Mr Abramovich's case - that "Mr Berezovsky (and the third man) were no more than gangsters offering him 'krysha', protection" and "never really businessmen" with whom he had been friendly and in partnership.

"Mr Abramovich provides a range of explanations for his decisions to make this payment," said Mr Rabinowitz. "Mr Abramovich suggests that some on-going fear of Mr Berezovsky caused him to pay out 1.3 billion dollars to which (he) had no entitlement in law or in honour."

He added: "The explanations offered by Mr Abramovich as to why he paid this huge sum of money are incredible, and incoherent, contradictory and obviously insufficient."

Mr Rabinowitz told the judge: "Mr Berezovsky's case is that Mr Abramovich has lied about Sibneft and lied about intimidation. Mr Abramovich's response is to seek to brand Mr Berezovsky the liar. The court will have to determine where the truth lies."

Mr Rabinowitz, for Mr Berezovsky, said there were "various categories of evidence" which supported Mr Berezovsky's case and "demonstrate Mr Abramovich's attempts to rebut that case to be incredible".

Jonathan Sumption QC, for Mr Abramovich, has told the court that Mr Berezovsky was paid millions by businesses controlled by Mr Abramovich for his services as a "political godfather".

"Mr Berezovsky complains that the word krysha implies that he is being characterised as a gangster," Mr Sumption has told the judge. "This is not the sense in which the word is being used here. What Mr Berezovsky provided was not mob violence but political influence and patronage."

By the late 1990s Mr Berezovsky's personal expenses were met by Mr Abramovich's companies, said Mr Sumption.

They were on an "exuberant scale" - funding "palaces in France", "private aircraft", "jewellery for his girlfriend" and "valuable paintings".

But he said Mr Berezovsky's contribution had been "almost entirely political".

He said Mr Berezovsky, who controlled a "powerful media empire", in Russia had a "close relationship" with people in the "immediate circle" of then President Boris Yeltsin.

Questioning Mr Berezovsky today, Mr Sumption suggested that Mr Berezovsky had asked for payments before Sibneft was created and expected 30 million dollars a year for his political services.

Mr Sumption said: "The person who handled payments to you from Mr Abramovich's Russian trading companies will say that she handled sums paid to you or to your order in 1995 of between 20 million and 30 million dollars. Do you deny that?"

Mr Berezovsky replied: "Completely".

Mr Sumption asked: "Do you remember that in March 1995 (a woman) delivered five million in dollar bills to you..?"

Mr Berezovsky replied: "I never asked Abramovich to pay anything before Sibneft was created. It's absolutely ridiculous."

The hearing continues on Monday.