Billionaire battle: Russians take feud to UK court

[October 31, 2011]  LONDON (AP) -- They were once said to be like father and son, vacationing, signing deals, and socializing at the Kremlin together. But these days two of Russia's richest men can't stand each other -- and they're trading insults in a spectacularly expensive public feud.

At more than $6.5 billion, the lawsuit brought by Russian tycoon Boris Berezovsky against fellow oligarch Roman Abramovich is a financial drama of giant proportions.

"It's the biggest claim currently being litigated anywhere in the world," said Mark Hastings, one of the lawyers acting for Berezovsky in the case being heard at London's Commercial Court. "I haven't seen anything like it."

It's not just the money that sets the case apart; it's the larger-than-life cast of characters set against the murky backdrop of post-Soviet politics.

Berezovsky, 65, is a fabulously rich former Kremlin power broker turned enemy of the state who has sought refuge in Britain while remaining an outspoken critic of Russian Prime Minister Vladimir Putin.

Abramovich, 45, has gobbled up London institutions like Chelsea Football Club and spent part of his vast fortune on beautiful yachts and homes.

They are among the most visible members of the freespending Russian oligarchy that emerged after the collapse of the Soviet state.

Abramovich is scheduled to take the witness stand and undergo cross-examination on Monday.

At the core of the suit is the billions of dollars that Berezovsky claims Abramovich owes him. Berezovsky accuses his former friend and protege of betraying him when he fell out of favor with then-president Vladimir Putin.

The case has drawn large crowds of journalists, trainee lawyers and spectators, especially on days when Berezovsky was on the stand. The Commercial Court has opened another room video-linked to it for visitors who can't find a seat in court.

But many Russians in London seem to take a cynical view in this battle of the billionaires.

"I think the prevailing mood is that of apathy and the average person wants them both to lose the case somehow, or at least not to have further financial gains," said Natasha Chouvaeva, the London-based publisher of RussianUK magazine.

The oligarchs' feud is just the most visible of the huge number of big commercial fraud cases dealing with Russia and Central Asia that have found their way to London courts. Lawyers say that many wealthy Russians flock to English courtrooms because they believe they can find fairness there, compared with Russian courts.

"In modern Russia people who can afford it won't buy a pack of medicine in a local pharmacy or a bottle of wine for fear of it being fake, let alone trust the authorities," Chouvaeva said. "And of course, people do not trust the judicial system."

In the witness stand over the past few weeks, Berezovsky has called Abramovich a "gangster," describing him as a man who's "not so smart" but talented in manipulating people.

The lawyer for Abramovich -- a so-called "stealth oligarch" who has shied away from the media and hardly speaks in public -- has dismissed Berezovsky's claims as nonsense and accused him of lying.

In a witness statement published this weekend in advance of his testimony, Abramovich says he has already paid Berezovsky more than $2.5 billion for his political patronage and doesn't owe him any more.

"I am disappointed and surprised that he additionally asserts a legal claim to a further significant portion of my wealth," he says of Berezovsky. "This is wealth that I have generated through hard work and by taking risks associated with doing business in Russia. I am not part of his family; I am not his keeper and I have no obligation, legal or moral, to fund his lifestyle or attempt to indulge his fantastic demands."

Berezovsky and Abramovich, both self-made entrepreneurs, were said to have become friends after they met on a private cruise. Berezovsky, a mathematician who founded the first Mercedes dealership in the former Soviet Union, built his fortune during Russia's privatization of state assets in the early 1990s.

In return for backing former president Boris Yeltsin, he and others gained access to his exclusive inner circle -- called "the Family" -- as well as valuable state assets at knock-down prices.

According to Berezovsky, he had been "impressed" with Abramovich -- who was a 28-year-old oil trader when the pair first met -- but believed the younger man needed his political influence to get ahead in the lawless chaos of post-Soviet Russia.

He claimed he had treated Abramovich just like a son.

Together with a third partner, the pair founded Sibneft, the Russian oil and gas conglomerate. In 2005, Abramovich sold Sibneft to Russia's state-owned gas monopoly Gazprom in a multibillion-dollar deal.

The two men's fortunes reversed when Berezovsky fell out with Putin, with whom he said he had enjoyed "fantastical relations", shortly after he became president in 2000.

He testified that Putin decided it would be "helpful for him" to push Berezovsky out. In 2001, Berezovsky fled to Britain, which granted him political asylum.

Charged in Russia with fraud and embezzlement, Berezovsky has been living in London in self-imposed exile.

His lawyers claim that Abramovich sought to profit from his former mentor's difficulties, choosing to cut ties with him for wealth and influence. According to them, Abramovich "intimidated" Berezovsky into selling his shares in Sibneft at a fraction of their value, causing him losses of almost $6 billion. They also allege breach of trust and breach of contract when Abramovich sold Berezovsky's alleged stake in aluminium company Rusal without his consent.

Abramovich denies all the allegations. According to his account, Berezovsky's role in creating Sibneft was political, not monetary -- asserting that Berezovsky never had shares in either Sibneft or Rusal. Abramovich's net worth is valued by Forbes at $13.4 billion.

[Associated Press; By SYLVIA HUI]

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