Another Setback for Deripaska

deripaska073109.jpgIt’s been a tough year for the Russian billionaire Oleg Deripaska.  Today he lost a major decision in the big case he is fighting in London against his former business partner Michael Cherney, who is claiming that he owns a stake in the metals group Rusal.  Deripaska’s counsel sought to have the case moved back to Russia for arbitration, but the British court ruled that the risk of government interference in the trial was too high.  Go figure – the country’s lack of rule of law can also negatively impact those eternally faithful to the Kremlin.

This ruling, plus the recent Council of Europe report on Russian justice, makes for a real “wake up and smell the coffee” moment.  Could Europe be coming around?

From the Financial Times:

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.

Thejudgment represents a further blow to Mr Deripaska, who is battling torestructure $17.3bn (€12.1bn, £10.4bn) in debt after seeing his fortunehit by plunging commodity prices.

A spokesman said Mr Deripaska was “disappointed” by the rulingand did not believe it was the English court’s place to make”pejorative claims about other countries’ legal systems”.

“Webelieve it sets a dangerous precedent that could leave the Englishcourts swamped with spurious claims from around the world,” he said.”We vehemently reject the vexatious claims made by Mr Cherney and willcontinue to contest them.”