It was the clash of the oligarchs. On one side of the courtroom was Boris Berezovsky, Kremlin critic, political exile, and sworn enemy of Vladimir Putin. On the other, Roman Abramovich, the billionaire owner of Chelsea football club, and a man known for his fondness for yachts.
In the middle a lot of bodyguards wearing very dark shades.
Once close friends, and alleged beneficiaries of Russia‘s controversial privatisation programme, the two men have been locked in an ugly public feud for more than a decade and have steadfastly avoided each other. But on Monday they came face to face at the high court in London in a case that could set a multibillion-pound record for private litigation in the UK.
The court heard that Abramovich “blackmailed and betrayed” Berezovsky, his former mentor, and put “wealth and influence” above “loyalty and friendship”. Berezovsky claims Abramovich “intimidated” him into selling his shares in the Russian oil company Sibneft at a fraction of their true value.
Berezovsky is claiming in excess of $5bn (£3.2bn) in damages from Abramovich over the Sibneft deal, his barrister Laurence Rabinowitz QC said. Berezovsky, who fled Russia in 2000 after falling out with Putin, who was then president, also wants at least $564m in compensation for another deal involving the Russian aluminium company Rusal.
The case was being heard in the gleaming new Rolls building of the commercial court in Fetter Lane, before Mrs Justice Gloster. Both Russians sat at opposite ends of the packed courtroom number 26, with Abramovich listening to the proceedings in Russian via headphones.
They ignored each other. Their entourages included supporters in shiny suits, Russian assistants dressed in black, relatives, friends, and so many lawyers that some were forced to sit at the back of the court.
Scheduled to last 12 weeks, the case has attracted some of the bar’s biggest names, including Jonathan Sumption QC, acting for Abramovich. Berezovsky is likely to give evidence on Thursday. Abramovich will take the stand, speaking in Russian, in early November.
The case promises to shed light on Russia’s murky privatisation programme in the 1990s, during which a small group of well-connected businessmen – subsequently dubbed oligarchs – became fantastically rich. It is also likely to illuminate the opaque connection between money, politics and power in Russia, both in the court of former president Boris Yeltsin, and in the more sinister era of Putin, the current prime minister who now looks set to return to the Kremlin next year.
Rabinowitz told the judge that both men had worked together to create Sibneft in 1995 and they had become good friends.
The partnership had also included the businessman Arkady “Badri” Patarkatsishvili, Georgia’s wealthiest man. “This is a case about two men who, and this is common ground, worked together to acquire an asset – that is Sibneft – that would make them wealthy beyond the wildest dreams of most people,” Rabinowitz said. The relationship continued until Putin, whom Berezovsky helped propel into the Kremlin, became Russia’s leader.
In the process they became and remained good friends, said Rabinowitz, until “Berezovsky, who had adopted a high political profile in Russia, not least through his control of certain media outlets, fell out with those in the Kremlin and was forced to leave his home and create a new life abroad.”
The barrister said Abramovich was left with the choice of remaining loyal to his old friend or seeking to “profit from his difficulties”. He said that Abramovich picked the latter route, and told Berezovsky that he had to sell his interests in Sibneft at a knockdown price. If he refused, people in the Kremlin led by Putin would expropriate them, Abramovich allegedly warned. “Mr Putin had come to regard Mr Berezovsky as an enemy,” Rabinowitz said.
Abramovich denies that Berezovsky or Patarkatsishvili were ever his business partners. He insists that he was the sole owner of Sibneft, plus had a sole share of Rusal, subsequently sold on to another Russian tycoon, Oleg Deripaska. He says he merely “hired” Berezovsky, a key figure in Yeltsin’s entourage, to provide political cover – known by the Russian word krysha (roof) – essential to any businessman wishing to survive in the lawless 1990s.
Berezovsky provided services “basically criminal in nature”, Abramovich’s lawyers allege. These included “corrupt political patronage” and protection from “Chechen criminal gangs”.
Berezovsky’s barrister conceded that the case was “incredibly complex”. He said that many of the crucial agreements had been made verbally – the preferred method, he said, for blackmailers. Another layer of difficulty stems from the fact that several of the protagonists are dead. Patarkatishvili died of a heart attack in 2008, prompting a bitter continuing legal battle between his relatives and Berezovsky.
The British lawyer Stephen Smith, meanwhile, who took notes of a crucial business meeting in the Georgian capital Tbilisi, died in a mysterious helicopter crash in 2004. There was enough material, however, to illustrate that Abramovich had “whitewashed” Berezovsky from the picture, the barrister said. He added: “The case is rather lacking in contemporanous documents. But some documents stand out like a beacon.”