British High Court to decide: Can Cherney testify by video?

Israeli oligarch originally from Uzbekistan suing Deripaska over a disputed shareholding stake in Rusal, the world’s largest aluminium company.

By JONNY PAUL JERUSALEM POST CORRESPONDENT
June 23, 2011 05:42
3 minute read.
MICHAEL CHERNEY

MICHAEL CHERNEY 311. (photo credit: Courtesy)

 
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The British High Court has this week deferred a decision on whether Israeli oligarch Michael Cherney should appear in the London court in a case involving Russian oligarch Oleg Deripaska.

Cherney, originally from Uzbekistan, now living in Israel, is suing Deripaska over a disputed shareholding stake in Rusal, the world’s largest aluminium company.

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However, following a European arrest warrant issued by Spain in 2009 – Spanish authorities are investigating alleged money laundering by several oligarchs who worked as partners in Russian metallurgic industry, among them Deripaska and Cherney – hence Cherney will not travel to the UK while his legal team is preparing an application to the European Union Court of Human Rights contesting the Spanish prosecution.

A spokesman for Cherney said the Spanish authority’s allegations him are “completely baseless” and ignored a ruling by a Swiss court last year.

“These allegations were investigated by the Swiss prosecution for 11 years and ended in the absolute exoneration of Mr Cherney. In 2010, the Swiss Federal Court awarded a record compensation to Mr Cherney for moral damage caused by that investigation and covered his legal fees,” the spokesman said.

Cherney’s spokesman accused the Spanish authorities of succumbing to behind-the-scenes political pressure from Moscow, as “the Spanish prosecution gave preferential treatment to Deripaska, an oligarch known to be favoured by the Kremlin.”

“Spanish investigators agreed to travel to Moscow to give a VIP interrogation to Oleg Deripaska, but have issued an arrest warrant against Michael Cherney and they refuse to travel to Tel Aviv to question Mr Cherney, who is eager to answer their questions and dispel all suspicions,” he said.

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Cherney’s spokesman said that pretext behind the issuing of an arrest warrant against Cherney is that the Spanish prosecution do not know his residential address.

“It is a ridiculous pretext, because his address in Israel is publicly open information. In particular this address is listed for the last four years in his lawsuit against Deripaska in UK High Court,” he said.

On Monday, the High Court decided that further evidence was needed on whether Cherney should be permitted to give evidence by video link from Israel rather than appear in person in the London court.

A further hearing on this issue is expected to take place in July.

The case was originally brought to the High Court in London by Cherney in 2006.

Cherney claims he is owed 20 percent of Deripaska’s shareholding in Rusal.

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

In 2007, the court ruled that it had no jurisdiction in the case as Deripaska was not a British citizen. However, the following year, the court said that although Russia was the “natural forum,” the case should be held in the UK because of “risks inherent in a trial in Russia.”

Deripaska is calling for the case to take place in Russia.

“Russia, not England, is the natural forum for this case,” a spokesman for Deripaska said on Tuesday. “Cherney obtained permission to bring his claim in the English courts, asserting that while he feared arrest in Russia, he could “come to England without difficulty” to give his evidence. Now Cherney says he cannot come to England to give his evidence because he fears arrest here too.”

Last month, Cherney lost personal jurisdiction in the US in a case involving Alexander Gliklad, a Ukrainian-born Israeli citizen living in New York, whom he accuses of owing $270m. over a 2003 signed agreement for a stake in the Russian coal-producing organization Kuzbassrazrezugol, a former state enterprise privatized in the early 1990s.

The Supreme Court of New York now has jurisdiction over the case.

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