Dmitry Magonya comments on the situation with Tatneft's lawsuit against I. Kolomoiskiy and other beneficiaries of the Privat Group filed with the High court of London
On March 23, 2016, Tatneft filed a lawsuit against Gennadiy Bogolyubov, Igor Kolomoiskiy, Pavel Ovcharenko, and Aleksander Yaroslavskiy, the company's representative said to the Vedomosti. The lawsuit was filed with the High Court of London. The lawsuit says that in 2009 the Ukrainian businessmen fraudulently laid their hands on the funds which were due to Tatneft for the oil supplied to the Kremenchug Refinery (KNPZ, JSC Ukrtatnafta), he said: “Tatneft claims damages in the amount of $334.1 million and interest”.
Ukrtatnafta's representative did not respond to the Vedomosti's inquiry. The telephones of Kolomoiskiy and Ovcharenko did not answer. Any attempts to contact Bogolyubov and Yaroslavskiy failed.
Ukrtatnafta was established in 1994 on the basis of the Kremenchug Refinery by decrees of the Presidents of Ukraine and Tatarstan. Tatneft, its affiliated structures, and the government of Tatarstan had 55.7% of shares, with 43.054% held by the state company “Naftogaz Ukrainy”, and 1.2% by a structure of Kolomoiskiy's Privat Group. In 2007, 18.296% of shares were written off from Tatneft's structures in favor of Naftogaz by decision of the Ukrainian courts (with the equity stake subsequently falling to the lot of Privat's structure). In 2014, an international arbitration court in Paris ruled that Ukraine owed $112 million plus interest to Tatneft, but Ukraine filed an appeal (with consideration on the merits on October 18).
Bogolyubov and Kolomoiskiy are co-founders and co-owners of the Privat financial and industrial group which controls, in particular, Privatbank, Ukraine's largest private bank. In March 2016, Kolomoiskiy, former Governor of the Dnepropetrovsk Region, was second in the rating of 100 richest Ukrainians according to the Ukrainian Forbes, with his wealth totaling $1.3 billion. Bogolyubov was the third in the rating ($1.3 billion) and Yaroslavskiy the eighth ($721 million). In 2003-2004, Ovcharenko was the Chairman of the Management Board of Ukrtatnafta.
The proceedings in Paris and London are related to different conflicts, says Dmitriy Magonya, the Managing Partner of the ART DE LEX law firm: in the first case, the lawsuit is based on the illegal alienation of Ukrtatnafta's shares by the Privat group, with Ukraine being the respondent; in the second case, failure to pay for the oil products supplied by Tatneft to KNPZ. Only now have they applied to London. Apparently, they decided at first to establish a violation of the international agreement on investments and then to hold liable Privat's beneficiaries and their related persons, explains the lawyer.
Tatneft will have to prove the respondents' close links with England in order for the court to consider the lawsuit, adds Rustam Kurmayev, Goltsblat BLP Settlement of Disputes Practice Partner. For example, they must have any property or business in the territory of the country. The Telegraph wrote in January 2016 that Kolomoiskiy lives in Switzerland and Bogolyubov in Belgravia, London (one of the most fashionable districts of the city).
In many respects, the outcome of the case will depend on whether or not the claimants will be able to prove that KNPZ did not pay for the oil supplied exactly under the influence of the respondents rather than for any other reasons (no money, existing outstanding disputes, etc.), continues Magonya. The lawyers say that it is difficult now to evaluate the prospects for the case in London. Magonya believes that the proceedings will continue for at least one or two years.
