Abramovich case told ‘rule of law had disappeared’

CHELSEA Football Club owner Roman Abramovich operated in a Russian state in which the “rule of law” had disappeared, police were “corrupt”, courts “open to manipulation” and businessmen needed access to a “political godfather”, a judge in London has heard.

Counsel for the billionaire Russian businessman told Mrs Justice Gloster that “quite extraordinary conditions” prevailed in Russia following the collapse of communism in 1992 and said it was “not easy” for English lawyers to assess the behaviour of people who lived in “such a world”.

Jonathan Sumption was describing Russia in the 1990s as he summarised Abramovich’s defence in a multi-billion pound legal battle at the Commercial Court in London.

Abramovich is being sued for more than £3 billion (€3.5bn) by fellow Russian oligarch Boris Berezovsky.

Berezovsky is claiming Abramovich “intimidated” him into selling shares in Russian oil company Sibneft at a fraction of their value — and alleging breach of trust and breach of contract.

Abramovich denies the allegations. Both men were at yesterday’s hearing.

“There was no rule of law,” said Sumption. “The 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.”

Sumption said Berezovsky was paid millions of pounds by businesses controlled by Abramovich for his services as a “political godfather”.

He said between 1995 and 2002, Berezovsky had received “two billion dollars” from “businesses controlled by Abramovich”.

Sumption also said that by the late 1990s, Berezovsky’s personal expenses were met by Abramovich’s companies.

He said they were on an “exuberant scale” — funding “palaces in France”, “jewellery for his girlfriend” and “valuable paintings”.

On Monday, Laurence Rabinowitz, counsel for Berezovsky, told the judge that both men had worked together to acquire Sibneft.

He said Berezovsky had been “betrayed” by Abramovich after falling out with Russian political leaders and leaving Russia in 2000 — after Vladimir Putin became president.

“Mr Berezovsky’s case in relation to Sibneft is that Mr Abramovich intimidated him into selling his very substantial interest in Sibneft to Mr Abramovich himself at a very substantial undervalue and that he did so in effect by making threats.

“The threats being… that unless Mr Berezovsky… sold those interests to him, he, Mr Abramovich, would take steps with a view to the interest being effectively removed from them by those in the Kremlin, led by President Putin, who had come to regard Mr Berezovsky as his enemy.”

But Sumption said yesterday that Berezovsky’s contribution had been “almost entirely political”.

Sumption said that, without Berezovsky’s “considerable influence”, Abramovich “would have got nowhere”.

The hearing continues.