He was a mentor and long-standing business partner, but for the last three months, exiled Russian billionaire Boris Berezovsky battled old friend Roman Abramovich in the largest private court battle in history — and lost.

When British High Court judge Elizabeth Gloster sat down in the commercial court Friday morning she said, almost from the outset, that she was dismissing Berezovsky’s $5.6 billion lawsuit against younger oligarch Abramovich, and his claims of cheating “in their entirety.”

Berezovsky, who is 65 and has been living in the U.K. since he won asylum here in 2003, had been an “unimpressive, and inherently unreliable, witness” during court proceedings, she said. “I gained the impression that he was not necessarily being deliberately dishonest, but had deluded himself into believing his own version of events.”

Berezovsky, who sat in a large court room lit by rows of halogen lights, put his head in his hands after he heard the verdict. For the next hour as Gloster read out her judgement, he remained almost expressionless, occasionally sipping from a glass of water or speaking quietly to his lawyer. He wore a grey suit and white shirt, with no tie.

When the court adjourned, the normally media-friendly Berezovsky met a large group of photographers and dozens of journalists outside the High Court to give his reaction, saying he was “absolutely amazed” by the decision to dismiss his case. “I’m surprised completely, particularly because Lady Gloster took responsibility for rewriting Russian history,” he said, adding that he would consider appealing.

Abramovich, 45, wasn’t present at the hearing, with reports saying he was in Monte Carlo to watch a Friday-night match by the English soccer team he owns, Chesea Football Club. But he did release a statement through his spokesman, saying he was “pleased and grateful for today’s outcome.”

In contrast to Berezovsky, Judge Gloster had mostly praise for Abramovich’s appearances in the courtroom, calling him a “truthful” and “reliable witness.” While Berezovsky would depart from his previous statements, sometimes “within minutes” of giving it, Abramovich “gave careful and thoughtful answers.”

The London-based trial, which has reportedly cost millions of dollars in legal fees, has laid bare a string of details about the life of a billionaire Russian oligarch, revealing the details about the yachts, planes and expensive estates in France that Berezovsky was alleged to have been given as protection payments from Abramovich.

Berezovsky had brought two claims against Abramovich, whose formulation, the judge said, had “changed over time”:

1) He said that Abramovich had coerced him into selling a stake in the Russian oil behemoth Sibneft for $1.3 billion — an enormous sum for mere mortals but not enough for Berezovsky, who claimed it was undervalued and that he had been cheated out of $5 billion.

2) That Abramovich had reneged on oral agreements made over the ownership and division of aluminium giant RusAl. Berezovsky claimed that his loss in relation to RusAl was at least $564 million.

The problem with these claims, particularly over the RusAl deals, was that they were often based on oral contracts. Most of the agreements about RusAl were said to have been made during discussions between a few men, including Abramovich, Berezovsky and nickel billionaire Oleg Deripaska, in London’s Dorchester Hotel between 1998 and 1999. That’s almost 14 years ago.

Judge Gloster pointed out that most witness would struggle to remember specific details from conversations from such stale evidence. With the burden of proof laying on the apparently-unreliable Berezovsky, there were no notes, memoranda or any documents recorded during the alleged meetings as evidence of their terms.

Abramovich had also contended that $1.3 billion he’d paid Berezovsky wasn’t for any stake in Sibneft — which he claimed the older oligarch didn’t even own — but protection money, known as “kryshin” in Russian (the literal translation is “ roof”) to afford him influence with then-president Boris Yeltsin. Berezovsky is firmly out of favor with Vladimir Putin now, but back in the late 90?s he was said to be a powerbroker within the Kremlin who had the ear of Yeltsin. He was thus a useful friend to have for anyone, like Abramovich, who was trying to build a big business out of the chaotic dissolution of the Soviet Empire.

Gloster suggested that Berezovsky had, over the years, dramatically misinterpreted facts. After offering political influence to Abramovich during the Yeltsin era, he may have regarded himself as entitled to “a piece of the Sibneft action,” or to have even “owned” Abramovich. ie. translating that into the belief that he owned a stake in Sibneft.

“That, in a very loose sense, was the nature of the deal with Mr. Abramovich, and the nature of many payments under so-called patronage or ‘protection’ arrangements,” she added. “But that does not translate in the complicated contractual agreement for which Mr. Berezovsky contended.”

The harsh lesson for Berezovsky is that in his world of powerful oligarchs and shifting empires, multi-billion dollar oral contracts aren’t worth the paper they’re written on.



ref: http://www.forbes.com