Court Reopens $13 Bln Minority Holder Claim Against BP

A Siberian court has ordered the reopening of a $13.6 billion lawsuit filed by minority shareholders in BP’s Russian venture TNK-BP against the British oil major BP, over its failure last year to finalize a $16 billion share swap deal with Rosneft.

The Federal West-Siberian Commercial Court ruled on Monday a repeal of previous rulings which dismissed as unfounded the claims by TNK-BP minority shareholders that their interests were infringed by BP’s failed Arctic shelf development deal with Rosneft, as TNK-BP could have participated in the projects.

The decision comes at a time of intensified shareholder conflict between the TNK-BP core shareholders and BP’s announced plans to sell its 50 percent stake in Russian joint oil venture, which could lead to the divulging of confidential information on the venture, including operational data, sales contracts, capital expenditure plans and other information.

BP has denied causing any damage and said the court decision could be the result of “corporate news,” Kommersant business paper reported on Tuesday.

TNK-BP CEO Mikhail Fridman resigned from his post in late May over what he said was “management paralysis” in the joint venture.

BP and the Russian partners in the AAR consortium have been locked in a long-running dispute over management of their Russian joint venture, which included the replacement of the former TNK-BP CEO Robert Dudley in 2008.

That conflict, which went on for three months, and ended with Dudley resigning and leaving Russia, was followed by another spat over whether BP was entitled to participate in a joint venture with Russia’s biggest crude producer, Rosneft, to explore and develop Russia’s Arctic shelf deposits.

BP lawyer Konstantin Lukoyanov said the court’s latest decision could damage Russia’s investment climate.

“Today’s judgment … casts doubt on the ability of the domestic judicial system to create a predictable and effective legal environment,” he said.

Dmitry Chepurenko, a lawyer representing the interests of TNK-BP minority shareholders, said he was satisfied with the court’s decision, as “the case has been sent for a new hearing.”

 

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