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Knights of the Vine RUSSIA

The Way It Is

In Court/On Court
– My Six Hours with Roman Abramovich at London’s Legal Wimbledon
Ian Mitchell

It is often said that the British government wants the City of London to replicate “the Wimbledon effect”. Britain has neither the best tennis players nor the richest banks in the world, but it undoubtedly stages the most prestigious tennis tournament and accommodates the most globally respected financial centre anywhere on the planet. Thanks in part to the Russian oligarchy, it is beginning to become apparent that Britain is gaining a similar ascendancy in a third form of organised, non-violent combat, namely the law.

The titanic fight between Boris Berezovsky and Roman Abramovich over the billions of dollars that the oil company Sibneft was worth perfectly illustrates this, being the biggest private individual law suit in the world today. Which is why, when I had a few days’ holiday in London recently, I spent every free moment sitting in Court 26 in the Rolls Building in New Fetter Lane watching “Mr Abramovich” being interrogated without stint or respect for his billions by Berezovsky’s cocky South African barrister, Laurence Rabinovitz. I only wished I’d had three months’ holiday because I would have been there every day, all day, and written a book about the case, which would have become a best seller after I was mysteriously murdered. Sadly, I only had about six hours in the company of Mr Abramovich, but that was fascinating enough.

The basic dispute is simple. Was the relationship between the two litigants one of client and protector or was it one of equal partnership? In 1995/6, at the time of the privatisation of Russian state assets by Boris Yeltsin, a company called Sibneft came into being apparently, though not indisputably, controlled by Abramovich. In 2005 he sold it to Gasprom for $13 billion, making him the richest man in Russia. Berezovsky claims half of that money should really be his as they were equal partners in creating the business.

Abramovich made many payments to Berezovsky over the years, usually at the rate of about $50 million annually, even though Berezovsky did not do any work in the company at all. The sums were sometimes larger than the whole profit of the enterprise, especially in the late 1990s when the price of oil dropped to $8 a barrel. But these were not dividends paid to a partner or investor, or loan interest, they were for “krysha” (meaning “roof”), or protection in murky world of Russian business. This word is at the centre of the case, and I must have heard it used fifty or sixty times in the short period I sat in court. It appears to be entering the English legal lexicon. But what exactly does it mean to an oligarch paying for it? This is what Abramovich wrote in his pre-trial witness statement:

“This is how krysha worked: so long as one’s protector provided the services necessary to maintain the particular business being protected, you were expected pay him whatever he asked, whenever he asked. The hierarchy of krysha is clear. It had nothing to do with ownership of the business… It does not make any sense to me to try to characterise krysha as giving rise to any form of legal obligation. Indeed there was a lot of krysha activity in Russia at that time which was well outside the law and was little more than criminal extortion (sic!). Krysha did not create legal obligations, but I was fully aware I had to pay, just like many others… For a period I had no objection if people believed that [Berezovsky] was closely connected with Sibneft, whether as owner, founder or otherwise. The whole point of securing his krysha was for other people to feel that Sibneft was ‘his’ so that the company would not be interfered with.”

Berezovsky (whose middle name is actually Abramovich!) claims that he “sold his interest” in Sibneft to Abramovich in 2002. He should have been paid much more than the “paltry” $1.3 billion he received, especially in the light of the massive price the company commanded just three years later. But Abramovich allegedly told him that if he did not agree to that figure, he would arrange for his share to be expropriated for nothing. Abramovich hotly denies this, saying that he paid the $1.3 billion to buy himself out of the krysha arrangement.

The problem is that there are no documents attesting to what was agreed, and very little paperwork even covering some of the big transfers from Abramovich to Berezovsky. Many of them were made in cash at the Moscow tennis club to which Berezovsky belonged—at least until he was forced to flee Russia after falling out with President Putin in late 2000. But in English law a verbal agreement is as binding as a written one, so the judge will have to decide on the basis of the evidence led what that agreement was: did it constitute partnership or was it mere krysha?

The arena in which this great battle is taking place—the case started in early October and is expected to last till the turn of the year—is the brand new Commercial Court building just off the Strand. The judge is the first woman to sit on the Bench in that court, Mrs Justice Gloster. She is a sharplooking, blonde (there were no wigs in court, and the judge wore the only gown), ex-Roedean and Girton lady who used to earn £2 million a year as one of London’s top commercial barristers, working incidentally from the same chambers as Laurence Rabinovitz.

On both the days I was in the public seats, 1st and 3rd of November, one of the richest men in Russia was sitting at a desk on a raised dais for all to see, with headphones on, replying to yet another of Rabinovitz’s intrusions into his private life. He did not look very comfortable.

“Now Mr Abramovich, could you tell the court how many times you attended Mr Berezovsky’s birthday party. And could you tell us who else was there. I think they were fairly small, rather intimate gatherings were they not?”

This sort of questioning went on for hour after hour: how many joint holidays did you take cruising in the Mediterranean? How often did you go skiing together? Did your wife meet Mr Berezovsky’s wife, and did your children play with Mr Berezovsky’s children? And so on. It was all designed to establish that the two men were close friends and therefore more likely to have been partners than client and protector.

When Rabinovitz put that point explicitly to Abramovich, he denied it saying that in Russia there were always understood to be at least two levels of “friend”, a close friend and an ordinary friend. There were sniggers in court at this apparently cavilling distinction. Few seemed to believe Abramovich when he said he counted Berezovsky as a “friend” but not a “close friend”. A cleverer man (and Abramovich did not look particularly smart) might have pointed out the difference between дкуг, приятель and знакомый. You do not have to be expert in Russian to understand that these words reflect gradations of friendship not adequately translated by the distinction in English between “friend” and “acquaintance”.

And in this lay a much larger problem. Law is all about language, and most of all when verbal rather than written agreements, in a foreign language, are under the microscope. Even in the short time I was in court I noticed half-a-dozen instances of this sort. Often the barrister and the witness appeared to be talking at cross-purposes. What I also noticed was that Abramovich sometimes tried to exploit the court’s inevitable lack of understanding of Russian to make a point

One example stands out. When asked by Rabinovitz why an associate of Berezovsky’s had talked about his connection with Sibneft saying “we” not “you”, as if they were all partners, Abramovich replied that the man concerned was Georgian. He spoke good Russian, but it was common for such people to confuse the Russian words for “you” and “we”! Half the people in court laughed, to the point where the judge had to call for order.

The atmosphere on the landing outside was interesting too. When I first tried to get in, I was stopped by a woman who said the public benches were full. She politely directed me to some other rooms nearby where they had installed massive television screens so that those members of the public who wanted to watch the proceedings but could not find a seat could still see what was happening. One screen in each room showed the scene in court and another recorded the stenographers official words as they were spoken, which was a remarkable way to accommodate the requirement that justice must not only be done but be seen to be done.

When I asked this lady who she was, she said she was one of Berezovsky’s bodyguards. She was a tall, slim woman wearing an earpiece. I told her she had no authority to stop anyone entering the court, which she immediately conceded. Irritated, I rather cheekily asked her if she were armed. She waved her arms meaningfully at me and said, “I have these.” Was Berezovsky in court, I asked? No but his family were and someone might try to attack them. Not inside this building, I suggested. No, but they might try to poison their food, she answered; look what happened to Litvinenko. For all that he was always accompanied by his own bodyguards, there seemed to be a lot less paranoia in the Abramovich camp than in the Berezovsky one.

Perhaps the strongest impression from seeing everything at first hand, and both litigants at close quarters (though Berezovsky only briefly), was Abramovich’s obvious air of personal discomfort. He sat by himself in the chairs outside the court during the tea breaks with everyone milling around but no-one talking to him. He looked sad, almost lonely.

I imagine the powers in the Kremlin are taking a close interest in this case. If one of the richest men in Russia can be forced to come to court and give such a minute account of his comings and goings fifteen years ago, then who is safe from the long arm of British justice? Vladimir Solvyov, a Russian journalist close to Putin, was recently quoted in a One Russia video release about the case entitled, “Russia is not an English colony”, as saying: “That they are talking about our government there, is that not a disgrace?”

He is right. It is a disgrace. Many wealthy Russians who are not intimates of the Kremlin circle really do feel they will get justice only outside Russia. Oleg Deripaska and Michael Cherny likewise have a long-running dispute over billions of dollars of “privatised” assets, and their case will be heard in London next year. They are not alone. Any court system is a “disgrace” when litigants prefer to use foreign tribunals.

As space is limited, I will say about the evidence I heard only that Abramovich gave me the impression that he was unlikely to convince the judge that his relationship with Berezovsky had been based on krysha rather than some form of partnership. Whether or not Mrs Justice Gloster will find that way after hearing all the evidence, I would not like to guess, but I would be surprised if she does not also take account of the fact that the dispute concerns money that many feel neither party is fully entitled to.

But even if Her Ladyship awards Berezovsky a small portion of what he claims, that might still be, by ordinary standards, a vast sum amount of money. Many Russians have asked me, “What happens if Abramovich simply refuses to pay?” That such a question can seriously be asked by intelligent, experienced people shows just what a disgrace the Russian legal system actually is, and therefore why more cases like this are going to come to London in the future.

There are huge sums to be made by Chancery Lane lawyers from rich Russian litigants, and the irony is that they are doing so at a time when the English government (the situation is somewhat different in Scotland) is trying to reduce the amount of Legal Aid available to ordinary people so that fewer claims end in formal court hearings, and more are settled by informal arbitration. It is rather like Wimbledon, where the hoi polloi have to make do with Henman Hill, while the Centre Court is largely reserved for celebrities and rich foreigners— which in a wider sense is rather like Russia. No wonder oligarchs feel at home in London!

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