Roman Abramovich's defence: Russia was like a medieval state

 

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The Independent Online

Be it the blacked-out Maybachs, gargantuan bodyguards or billions of pounds at stake, there was no shortage of intrigue yesterday as the 'Battle of the Oligarchs' entered its second day at London's High Court.

Perhaps the most captivating element of all in the bitter dispute between Chelsea's billionaire owner Roman Abramovich and his former friend, the wanted businessman and politician Boris Berezovsky, was its promise to shed light on the shadowy gangland world of mid-90s Russia.

That light burst into brilliant luminescence as Britain's leading barrister, Jonathan Sumption QC – rumoured to be receiving an eight-figure fee – delivered his opening arguments in defence of Mr Abramovich.

The Chelsea owner, worth an estimated £8.6bn, and his former mentor Mr Berezovsky, whose fortune totals a meagre £500m, again sat on opposite sides of the courtroom, surrounded by lawyers, as Mr Sumption – a medieval historian in his spare time – said conditions in Russia after the collapse of communism "have not been seen in this country since the 15th century".

He told Mrs Justice Gloster that it was "not easy" for lawyers to understand those "quite extraordinary conditions" but added: "Your Ladyship must have read Shakespeare."

The QC then launched into a tale of threats, favours and intimidation between a cast of Russian billionaires and Presidents, either dead, imprisoned, sat in court or in one case still in high office in the Kremlin and expected to return to the presidency.

"There was no rule of law," he said. "Police were corrupt. The courts were unpredictable at best – at worst open to manipulation by major political or economic interest groups.

"Nobody could go into business without access to political power. If you didn't have political power yourself, you needed access to a godfather who did."

Mr Abramovich is being sued by Mr Berezovsky – who alleges breach of trust and breach of contract over the oil firm Sibneft and is claiming more than £3.2bn in damages. On Monday Mr Berezovsky's barrister, Lawrence Rabinowitz QC, portrayed the two oligarchs as friends and equal partners in Sibneft, before Mr Abramovich intimidated him into selling his shares at a knockdown price or face their being seized by the Kremlin.

The tale told by Mr Sumption yesterday was markedly different. He said Mr Berezovsky was paid millions of pounds by businesses controlled by Mr Abramovich for his services as a "political godfather".

"Mr Berezovsky was a highly controversial figure in Russian politics in the 1990s," he said. "Boris Berezovsky was a power broker."

Mr Berezovsky's lawyers shook their heads as Mr Sumption described him as a man with no knowledge or interest in the oil business – his only significant contribution to Sibneft being securing for Mr Abramovich valuable political introductions and his influence over then President Boris Yeltsin via his daughter Tatyana Yumasheva and her husband, Mr Yeltsin's chief of staff.

"He didn't contribute a single cent to the acquiring or the building up of the business," said Mr Sumption. "Nor did he contribute to its managerial success."

Mr Abramovich's acquiring of the controlling interest in Sibneft at a relatively modest price came in return, he claimed, for support for President Yeltsin from Mr Berezovsky's television station, ORT, in the 1996 Presidential elections. Mr Abramovich in turn acknowledged the "debt of honour" he owed Mr Berezovsky, and made regular payments to him totalling millons of pounds. These payments, known as "krysha", or "roof", we might recognise as "refuge, or protection" said Mr Sumption, a service Mr Berezovsky provided along with his associate, the Georgian billionaire Badri Patarkatsishvili, who died suddenly and unexectedly at his Surrey mansion in 2008.

Mr Berezovsky "demanded more and more," Mr Sumption said. "Expenses on an exuberant scale - palaces in France, private aircraft, jewels for his girlfriends, valuable painting at Sotheby's."

After Mr Berezovksy fell out with President Putin and was forced into political exile in 2000, Mr Abramovich at made a payment of £1.3bn to Mr Berezovsky, which he claims was his "debt of honour", and bore no relation to Sibneft's prosperity. Mr Berezovsky claims the money represented a forced sale of his share in Sibneft at a knockdown price. In 2005, Mr Abramovich sold his share in SIbneft for £7.4bn, at the time the largest transaction in Russian history.

The most significant problem for Mrs Justice Gloster over the coming 12 weeks will be that there is little proper documentation to support either party's claims.

As Mr Sumption pointed out: "The agreement to sell television support to the President of Russia in return for the sale of state assets could never be recorded in writing. Of course not."

Quite. Mr Berezovsky will give evidence tomorrow. Mr Abramovich is expected to do so in early November.

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