LONDON — In an epic battle between two Russian billionaires that became a riveting window on the murky and sometimes murderous business culture of post-Soviet Russia, a High Court judge rejected a $5.8 billion claim on Friday that pitted Boris A. Berezovsky, a London-based émigré, against Roman A. Abramovich, owner of London’s Chelsea football club.
The case, billed as the world’s largest private lawsuit, ended with a stunning victory for Mr. Abramovich and a harsh repudiation for Mr. Berezovsky, who was characterized by the judge in the case, Elizabeth Gloster, as a fundamentally unreliable and even dishonest witness during the four-month trial in London last year.
Mr. Berezovsky, hugely wealthy but still a financial minnow compared with Mr. Abramovich, emerged from the case with nothing to show for the lavish sums that he, like Mr. Abramovich, spent on recruiting some of Britain’s most expensive legal talent to fight their cases. The judgment Friday deferred a ruling on legal costs in the case, leaving Mr. Berezovsky exposed to the possibility of a fresh setback if the court penalizes him by having to pay Mr. Abramovich’s costs.
After the judge’s hourlong ruling, Mr., Berezovsky, in a gray suit, emerged into the sunlight outside the steel-and-glass Rolls building that houses the commercial division of the High Court. He was smiling but seemingly stunned by the harshness of the judgment against him.
“Perfect!” he said, in English, when reporters asked him how he felt.
But switching to Russian, he said that the judge’s ruling had shaken his “faith in the British justice system” — a reference to a pattern that has emerged in recent years of the superrich from Russia and other countries with highly politicized legal systems carrying their disputes into British courts.
The case seemed certain to have strong reverberations in the Kremlin, where Mr. Abramovich, 45, who remains at least formally a Russian resident, has strong political and personal ties to President Vladimir V. Putin that have been crucial to Mr. Abramovich as he has built a fortune that was estimated at more than $12 billion by Forbes earlier this year.
Mr. Berezovsky, 65, fled Russia a decade ago after the Kremlin connections that he built under former President Boris N. Yeltsin turned into a relationship of bitter enmity with Mr. Putin.
With a worth estimated recently by the Sunday Times of London at about $1.3 billion, Mr. Berezovsky has migrated from a position as a patron and business partner of Mr. Abramovich’s in the murky free-for-all that followed the collapse of the Soviet Union to the jealous rivalry laid bare in the London court, where Mr. Berezovsky claimed that Mr. Abramovich had cheated him of his share in the huge Russian oil giant Sibneft.
In Britain, Mr. Berezovsky has lived a reclusive life under close protection by a small army of bodyguards, and has claimed that he lives under permanent threat of assassination by Kremlin-assigned agents. Mr. Abramovich spends much of his time in London attending to his ownership of the Chelsea club, where his billion-dollar investment led in May to the club’s triumph in the European Champion’s League, the most coveted club trophy in soccer.
The two billionaires have become synonymous with the extravagant lifestyles of the Russian oligarchs who made their fortunes from the privatization of state assets, particularly in the oil, gas and minerals sectors, after the collapse of Soviet Communism in 1992. Both have maintained luxurious yachts in the Mediterranean, along with spacious mansions in the most upscale districts of London’s West End.
Both, too, have become talismen of an era when huge fortunes were made out of a singular period in Russian history — an era when men with few business scruples but powerful connections to the Kremlin capitalized on rampant lawlessness and corruption to commandeer vast industries, eliminate enemies and use their unbounded wealth to consolidate the power of Mr. Yeltsin and later Mr. Putin.
But it was Mr. Berezovsky, not Mr. Abramovich, who took the brunt of Justice Gloster’s verdict. Her 38-page ruling was unsparing of Mr. Berezovsky, calling him “an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be molded to suit his current purposes.”
She continued: “At times, the evidence which he gave was inherently dishonest; sometimes, he was clearly making his evidence up as he went along in response to the perceived difficulty in answering the questions in a manner consistent with his case; at other times, I gained the impression that he was not necessarily being dishonest, but had deluded himself into believing his own version of events.”
Evidence at the trial included fascinating insights into the career paths that took the two litigants to unimagined heights of wealth and, ultimately, to the empoisoned rivalry that precipitated the lawsuit.
Evidence showed that the two men met in 1994, while cruising the Caribbean together in a private yacht. Mr. Berezovsky had graduated from his earlier job as an academic to become the owner of Russia’s largest car dealership and an intimate of Mr. Yeltsin, a former Communist party stalwart who had become Russia’s first post-Soviet president.
The cruise led to the two men’s deciding to join forces in an audacious raid on the heart of Russia’s oil industry. Mr. Abramovich, a former Soviet Army conscript, garage mechanic and toy-duck importer, brought his business acumen and cash to the deal, while Mr. Berezovsky used his influence in the Kremlin to persuade the government to privatize two Siberian oil holdings and then sell a stake in the new business, Sibneft, to him, Mr. Abramovich and the richest man in Georgia, Arkady Patarkatsishvili.
The deal was also fashioned to help Mr. Berezovsky raise money to prop up his media company, ORT, which would in turn prop up Mr. Yeltsin’s political career.
Mr. Berezovsky told the London court, from the witness box and in court papers, that the deal meant that he owned part of Sibneft and that Mr. Abramovich later bullied and blackmailed him into selling his stake in 2001 for a mere $1.3 billion — only for Mr. Abramovich to turn around and sell his own stake in the company for $11.9 billion in 2005.
But Mr. Abramovich rejected Mr. Berezovsky’s account as a lie. Mr. Berezovsky never owned a stake in Sibneft, he said; instead, his role in that and other deals was to provide “krysha” — literally “roof,” or protection. “His political clout was necessary, and it was that clout I was paying for,” Mr. Abramovich said in the court papers.
Their maneuverings of the two men, including ventures in airplanes and aluminum, led to their meeting with their associates in exotic and exclusive places, including Mr. Berezovsky’s club in Moscow; on France’s Côte d’Azur; at ski resorts in the French Alps; at the luxury Dorchester Hotel in London; in private planes and super-yachts; and at various heliports and airports.
Throughout this period, Mr. Abramovich said, he was continually handing over huge sums of money to help finance what he called Mr. Berezovsky’s “exuberant lifestyle” — an arrangement that apparently included paying Mr. Berezovsky’s girlfriend’s credit card bills; chartering planes for Mr. Berezovsky; and buying him a house in Cap d’Antibes, France. In 2000, Mr. Abramovich said, he gave Mr. Berezovsky $305 million because “I wanted him to be able to establish himself properly abroad.”
Sarah Lyall contributed reporting.
The case, billed as the world’s largest private lawsuit, ended with a stunning victory for Mr. Abramovich and a harsh repudiation for Mr. Berezovsky, who was characterized by the judge in the case, Elizabeth Gloster, as a fundamentally unreliable and even dishonest witness during the four-month trial in London last year.
Mr. Berezovsky, hugely wealthy but still a financial minnow compared with Mr. Abramovich, emerged from the case with nothing to show for the lavish sums that he, like Mr. Abramovich, spent on recruiting some of Britain’s most expensive legal talent to fight their cases. The judgment Friday deferred a ruling on legal costs in the case, leaving Mr. Berezovsky exposed to the possibility of a fresh setback if the court penalizes him by having to pay Mr. Abramovich’s costs.
After the judge’s hourlong ruling, Mr., Berezovsky, in a gray suit, emerged into the sunlight outside the steel-and-glass Rolls building that houses the commercial division of the High Court. He was smiling but seemingly stunned by the harshness of the judgment against him.
“Perfect!” he said, in English, when reporters asked him how he felt.
But switching to Russian, he said that the judge’s ruling had shaken his “faith in the British justice system” — a reference to a pattern that has emerged in recent years of the superrich from Russia and other countries with highly politicized legal systems carrying their disputes into British courts.
The case seemed certain to have strong reverberations in the Kremlin, where Mr. Abramovich, 45, who remains at least formally a Russian resident, has strong political and personal ties to President Vladimir V. Putin that have been crucial to Mr. Abramovich as he has built a fortune that was estimated at more than $12 billion by Forbes earlier this year.
Mr. Berezovsky, 65, fled Russia a decade ago after the Kremlin connections that he built under former President Boris N. Yeltsin turned into a relationship of bitter enmity with Mr. Putin.
With a worth estimated recently by the Sunday Times of London at about $1.3 billion, Mr. Berezovsky has migrated from a position as a patron and business partner of Mr. Abramovich’s in the murky free-for-all that followed the collapse of the Soviet Union to the jealous rivalry laid bare in the London court, where Mr. Berezovsky claimed that Mr. Abramovich had cheated him of his share in the huge Russian oil giant Sibneft.
In Britain, Mr. Berezovsky has lived a reclusive life under close protection by a small army of bodyguards, and has claimed that he lives under permanent threat of assassination by Kremlin-assigned agents. Mr. Abramovich spends much of his time in London attending to his ownership of the Chelsea club, where his billion-dollar investment led in May to the club’s triumph in the European Champion’s League, the most coveted club trophy in soccer.
The two billionaires have become synonymous with the extravagant lifestyles of the Russian oligarchs who made their fortunes from the privatization of state assets, particularly in the oil, gas and minerals sectors, after the collapse of Soviet Communism in 1992. Both have maintained luxurious yachts in the Mediterranean, along with spacious mansions in the most upscale districts of London’s West End.
Both, too, have become talismen of an era when huge fortunes were made out of a singular period in Russian history — an era when men with few business scruples but powerful connections to the Kremlin capitalized on rampant lawlessness and corruption to commandeer vast industries, eliminate enemies and use their unbounded wealth to consolidate the power of Mr. Yeltsin and later Mr. Putin.
But it was Mr. Berezovsky, not Mr. Abramovich, who took the brunt of Justice Gloster’s verdict. Her 38-page ruling was unsparing of Mr. Berezovsky, calling him “an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be molded to suit his current purposes.”
She continued: “At times, the evidence which he gave was inherently dishonest; sometimes, he was clearly making his evidence up as he went along in response to the perceived difficulty in answering the questions in a manner consistent with his case; at other times, I gained the impression that he was not necessarily being dishonest, but had deluded himself into believing his own version of events.”
Evidence at the trial included fascinating insights into the career paths that took the two litigants to unimagined heights of wealth and, ultimately, to the empoisoned rivalry that precipitated the lawsuit.
Evidence showed that the two men met in 1994, while cruising the Caribbean together in a private yacht. Mr. Berezovsky had graduated from his earlier job as an academic to become the owner of Russia’s largest car dealership and an intimate of Mr. Yeltsin, a former Communist party stalwart who had become Russia’s first post-Soviet president.
The cruise led to the two men’s deciding to join forces in an audacious raid on the heart of Russia’s oil industry. Mr. Abramovich, a former Soviet Army conscript, garage mechanic and toy-duck importer, brought his business acumen and cash to the deal, while Mr. Berezovsky used his influence in the Kremlin to persuade the government to privatize two Siberian oil holdings and then sell a stake in the new business, Sibneft, to him, Mr. Abramovich and the richest man in Georgia, Arkady Patarkatsishvili.
The deal was also fashioned to help Mr. Berezovsky raise money to prop up his media company, ORT, which would in turn prop up Mr. Yeltsin’s political career.
Mr. Berezovsky told the London court, from the witness box and in court papers, that the deal meant that he owned part of Sibneft and that Mr. Abramovich later bullied and blackmailed him into selling his stake in 2001 for a mere $1.3 billion — only for Mr. Abramovich to turn around and sell his own stake in the company for $11.9 billion in 2005.
But Mr. Abramovich rejected Mr. Berezovsky’s account as a lie. Mr. Berezovsky never owned a stake in Sibneft, he said; instead, his role in that and other deals was to provide “krysha” — literally “roof,” or protection. “His political clout was necessary, and it was that clout I was paying for,” Mr. Abramovich said in the court papers.
Their maneuverings of the two men, including ventures in airplanes and aluminum, led to their meeting with their associates in exotic and exclusive places, including Mr. Berezovsky’s club in Moscow; on France’s Côte d’Azur; at ski resorts in the French Alps; at the luxury Dorchester Hotel in London; in private planes and super-yachts; and at various heliports and airports.
Throughout this period, Mr. Abramovich said, he was continually handing over huge sums of money to help finance what he called Mr. Berezovsky’s “exuberant lifestyle” — an arrangement that apparently included paying Mr. Berezovsky’s girlfriend’s credit card bills; chartering planes for Mr. Berezovsky; and buying him a house in Cap d’Antibes, France. In 2000, Mr. Abramovich said, he gave Mr. Berezovsky $305 million because “I wanted him to be able to establish himself properly abroad.”
Sarah Lyall contributed reporting.