On Wednesday, May 2, the Civil Court of the Swiss District of Sarin (Canton of Freiburg) began public hearings on the suit of the EBRD against Roman Abramovich, his partner Evgeny Shvidler and Gazprom Neft. Abramovich personally appeared in court and gave evidence, reports AP. The amount of claims today reaches 46 million Swiss francs (about $ 46.8 million) excluding interest.
Public debate began 13 years after the filing of a lawsuit that resulted from a conflict between the EBRD and Runicom. The latter in the late 1990s was the exclusive export agent of Sibneft (72.7% of the company was sold at the end of 2005 to Gazprom for $ 13 billion). The meeting is expected to be attended by 17 lawyers, and its conduct will require special security measures, the newspaper "24 heures" wrote.
How it all began
Prior to the financial crisis of 1998, the EBRD provided several loans to the Russian bank SBS-Agro for a total of $ 35 million. All of them were issued under the program of assistance to small and medium-sized businesses. The bank, which had the right to dispose of these funds, provided one of them, for about $ 15 million, to the Swiss Runicom SA. A few days before the August default, the bank ceased to exist. As a result of negotiations, the EBRD got the right to demand a loan from SBS-Agro of Runicom SA.
Not having received this money, in 1999 the EBRD filed a claim against the oil trader. The lawsuit ended in 2002 with the bank's victory in the Supreme Arbitration Court of Russia, which ordered $ 17.5 million to be paid. The court issued its decision, despite the fact that the defendant provided documents on the return of the debt back in 1998. At the same time, the positive decision of the Supreme Arbitration Court was passed, as Evgeniy Tannenbaum, the former head of Millhouse, stated, after a letter that was allegedly sent to the court on the eve of the meeting by the EBRD. It said that a decision in favor of the bank would help improve the investment climate in Russia.
But the EBRD has not been able to recover these funds. In 2003, the process of liquidation began with respect to Runicom SA. As the Financial Times wrote, Sibneft "for tax reasons" changed it to another oil trader - Gibraltar-registered Runicom Ltd.
In 2004, the FT, citing Yevgeny Tannenbaum, wrote that when taking the rights to the Runicom loan, the EBRD did not conduct due diligence. This did not allow the bank to learn that the loan to "SBS-Agro" was already closed. The Forbes source, who is familiar with the details of the case, stressed that the EBRD "has always been extremely serious about verifying all loan agreements and doing high-quality due diligence when no one has heard these words in Russia yet." "Representatives of the bank, managing the money of European taxpayers, have always been very careful about checking all documents," Forbes said. "The amount of claims, although small for the Russian economy, but its return is principled for the EBRD."
Chances for success
When considering a new lawsuit in Switzerland, the court will proceed from the fact that the Russian court has sided with the bank and confirmed the indebtedness, says Julia Romanova, the head of the group of law firm Bryan Cave Leighton Paisner Russia.
"It is much more difficult to prove the fact that Runicom was controlled by Abramovich and Shvidler both before and after 1998, although for this reason they are the defendants in the case in Switzerland," Romanova said. "In this respect, the proceedings in Swiss jurisdiction are convenient, firstly, by a long period of limitation of actions, and secondly by the fact that the court takes seriously and takes into account, among other things, indirect evidence of control." The whole question is, exactly what evidence was found during the entire preparation of the case, she adds.
Previously, as indirect evidence, EBRD representatives quoted copies of payment documents for the cosmetology services of Roman Abramovich's former wife Irina, sent from Sibneft's fax on Runicom SA in 1997. In 1999, according to the EBRD, Runicom SA partially paid the hotel bill for Abramovich and his partner Alexander Mamut F 42.
The lawsuits against controlling persons and de facto directors with the goal of imposing responsibility for bringing the company to bankruptcy are provided for by most legal systems, including Swiss law, says Alexander Pakhomov, Managing Partner of the UK Law and Business Company. "It is interesting that information about the presence of control by Roman Abramovich was published back in the early 2000s, and Runicom appeared in the trial of Abramovich and Berezovsky in 2007," he notes. "There is a lot of evidence in the press that the defendants are affiliated with Runicom SA, but their direct relationship to the company's management and the issuance of compulsory orders must be proved in court, which will not be easy given the prescription and liquidation of the main borrower, the SBS-Agro bank."
When filing a lawsuit, there is a theoretical opportunity to seize some of the defendants' assets, Yulia Romanova draws attention. "But the whole question is which assets it can be distributed to. Not the fact that the decisions of the Swiss court will automatically be recognized in the EU, "she concludes.