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London High Court returns to Cherney case in £2.3b. trial

July 15, 2012 03:21

The case is about a dispute over a shareholding stake in Rusal, the world’s largest aluminium company.

Court (illustrative) 370

Court (illustrative) 370. (photo credit:REUTERS/Michael Kooren)

LONDON – The High Court in London began hearing evidence last week in a £2.3-billion battle between Israeli tycoon Michael Cherney and Russian oligarch Oleg Deripaska.

The case is about a dispute over a shareholding stake in Rusal, the world’s largest aluminium company.

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Cherney, who was born in Uzbekistan but now lives in Israel, says he is owed 20 percent of Deripaska’s shares in Rusal after allegedly agreeing to buy his share in the company.

Deripaska, who paid Cherney $250 million as part of an agreement, “vehemently” rejects the claim.

He claims that Cherney was never a business partner and that he imposed “krysha” on him – a Russian term for extortion protection rackets that were prevalent in post-Soviet Russia.

The Russian oligarch says he only paid Cherney the $250 million as protection money, not as a partial payment for a buyout of the shares Cherney alleges he held in the company.

Last year, the High Court ruled that Cherney can give evidence via video link to the London court while a Spanish arrest warrant exists against him.

In 2009, Spain issued a European arrest warrant against him on alleged money-laundering charges.

Cherney accused Spain of “politically motivated behavior” and said he was applying to the European Court of Human Rights to contest the charges.

The trial, which is expected to last a year, will first need to establish whether Deripaska is liable toward Cherney. Only if he is successful will the amount of this claim be considered.
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