British court dismisses suit brought by oligarch Cherney

Israeli billionaire had accused his former lawyers of negligence and a breach of duty and trust in connection with real estate deal.

By JONNY PAUL, JERUSALEM POST CORRESPONDENT
August 10, 2011 05:27
2 minute read.
A gavel strikes at the issuing of justice

311_gavel. (photo credit: Ariel Jerozolimski)

LONDON – The British High Court has dismissed a case in which Michael Cherney, the Russian-born oligarch now living in Israel, accused his former lawyers of negligence and a breach of duty and trust.

Cherney began proceedings in 2008 against his former solicitors, Pettman Smith, which since merged with London law firm Child and Child, and four other business partners, including American businessman Frank Neuman, over property deals done in London between 2004 and 2008.

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The Israeli billionaire said that Neuman had reneged on business arrangements in which Cherney would acquire prime real estate in the UK with the American businessman taking legal possession of the properties.

Cherney accused Neuman of selling the properties without his consent, though he repaid the amount Cherney paid for the property, and keeping the profits, said to be around $10 million.

Last year, they agreed on a settlement shortly before the High Court was to rule on cross applications for committal.

On Friday the High Court dismissed all claims against the lawyers and their claim against Neuman.

“I believe that I have now dealt with all of the claims against the firm,” Justice Henderson, who presided over the case, said in his judgement. “For the reasons which I have given, I hold that each claim fails. It follows that the action against the Firm must be dismissed.

“It also follows that the firm’s claim against Mr. Neuman must be dismissed, because the firm has not been held liable in respect of any damage suffered by the claimants,” he added.

In another case involving Russian oligarch Oleg Deripaska, the High Court ruled last month that Cherney would be able to give evidence to the London court via video link. This follows a Spanish arrest warrant issued against him in 2009 on alleged money-laundering charges.

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

Also last month – in a case involving Alexander Gliklad, a Ukrainian-born Israeli living in New York, and a disputed $270 million – the New York Supreme Court granted Gliklad an antisuit injunction barring Cherney from prosecuting the case in Israel.

“Allowing Mr. Cherney to prosecute in Israel would result in a serious waste of the court’s scarce resources and time. Mr.

Cherney has proceeded in a way that is not conducive to the timely resolution of this case. A parallel lawsuit in Israel would result in duplicative litigation and may interfere with the court’s adequately enforcing this jurisdiction’s policies and resolving the issues before it,” the judge presiding over the case said.


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