Oleg Deripaska, the Russian tycoon, has lost an attempt to block a legal claim against him in London over a disputed stake in his aluminium empire.
On Friday, three judges at the Court of Appeal in London backed a previous judgment granting jurisdiction for a legal claim for a stake in UC Rusal, his aluminium group, which was launched by Michael Cherney, a former business partner.
In what amounts to a stinging critique of Russian justice, the judges said they found no evidence to counter a previous ruling which found that Mr Cherney risked assassination or arrest on trumped up charges should he pursue the case in Russia.
One of the judges also said there was a significant risk the government could interfere if the case were heard in Russia.
The judgment represents a further blow to Mr Deripaska, who is battling to restructure $17.3bn (€12.1bn, £10.4bn) in debt after seeing his fortune hit by plunging commodity prices.
A spokesman said Mr Deripaska was “disappointed” by the ruling and did not believe it was the English court’s place to make “pejorative claims about other countries’ legal systems”.
“We believe it sets a dangerous precedent that could leave the English courts swamped with spurious claims from around the world,” he said. “We vehemently reject the vexatious claims made by Mr Cherney and will continue to contest them.”
The case centres on Mr Cherney’s claim that he is owed compensation for a 13.2 per cent stake in UC Rusal. Mr Cherney says he signed an agreement with Mr Deripaska in March 2001 in London’s Lanesborough Hotel ahead of the merger of the Sibal aluminium company with the metals empire of Roman Abramovich to form Rusal. Rusal later merged with rival Sual to form UC Rusal.
The first part of the agreement sets out a payment of $250m by Mr Deripaska to Mr Cherney for 17.5 per cent in Sibal, while the second part is alleged by Mr Cherney to oblige Mr Deripaska to hold a 20 per cent stake in the merged Rusal for Mr Cherney for five years, before paying him the value of the stake minus the $250m.
The case also risks shining a light on past business dealings between Mr Deripaska and Mr Cherney.
Mr Deripaska has said in a witness statement that he paid Mr Cherney $250m and does not owe him anything else, including any interest in Rusal. He claims that he drafted the second part of the agreement as an outline proposal for Anton Malevsky, not Mr Cherney. Mr Malevsky, former head of the Izmailovsky organised crime group, later died in a parachute accident.
Mr Deripaska has insisted he was forced into partnership with Mr Cherney and the late Mr Malevsky, who provided “protection” for plant managers under conditions that were difficult to refuse. Mr Cherney has denied any ties with organised crime.