Oleg Deripaska broke his promises in the Moscow land dispute, the court ruled

Russian metals tycoon Oleg Deripaska “deliberately” breached legal obligations and must therefore face contempt of court, the High Court in London said on Thursday.

British-based lawyers for Vladimir Chernuhin, the husband of a Conservative Party donor and former deputy finance minister of Vladimir Putin, alleged that Deripaska broke a promise to Chernuhin in 2018 to keep his stake in a Moscow land dispute.

The Supreme Court was asked to find Deripaska in contempt of court, which carries a prison sentence of up to two years or a fine.

Deripaska, who founded metals group En+ and is under US and UK sanctions over alleged close ties to the Kremlin, denies breaching commitments and is defending the case.

The High Court heard that in 2018 Chernukhin, whose wife Lubov is a Tory party donor, asked Deripaska for a legal undertaking over a stake in En+ to give him assurances the metals magnate had enough assets in the UK to pay a potential $95 million. legal judgment from the Moscow Land Court case. The $95 million fee has since been paid in full.

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Chernuhin asked for the commitments after the American government hit Deripaska and En+ with sanctions. This caused the value of En+ to fall and raised fears that the metals magnate was moving his assets to Russia beyond the reach of English courts, the High Court said on Thursday.

Jonathan Crow KC, representing Chernuhin, told the High Court there was “a significant degree of animosity” between his client and Deripaska. Crow claimed that in 2018 there were concerns that Deripaska would return his assets to Russia because he “enjoyed a status in the Russian Federation that necessitated execution. [of the legal award ] against it is difficult or impossible”.

The oligarch is one of the few prominent Russian elites to speak out against Vladimir Putin’s invasion of Ukraine, although his criticism has been guarded and he has not directly criticized the Russian president.

Earlier this month, Deripaska warned an audience that Russia could run out of money by 2024 if it doesn’t find new investment to replace Western companies forced out of the country by sanctions.

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But Deripaska’s criticism earned him a rebuke from the Kremlin and weakened his position among the elite, according to people familiar with the matter. Earlier this year, an influential school run by a close Putin aide seized a $1 billion Black Sea hotel complex and port from Deripaska after he lost a court battle last year.

But the High Court heard that months after Deripaska took over, En+ was moved from Jersey to Moscow as part of an action plan drawn up by its British chairman, Lord Barker, who resigned from the company in March last year as the US its sanctions were lifted on En+. Under the plan, Deripaska also resigned as a director and sold his controlling stake.

Deripaska testified in his defense via video link from Moscow this week and denied breaching the undertaking. The metals magnate said that after stepping down as a director of En+ in May 2018, he was “not involved in the business of the company” and “trusted management and Lord Barker” to come up with a plan to save En+. He agreed that his wealth had been “massively reduced” due to US sanctions.

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During cross-examination, Deripaska repeatedly denied claims that he was “not telling the truth” about his knowledge of preparations for En+’s relocation to Russia.

On Thursday, Thomas Grant KC, representing Deripaska, told the High Court his client had dealt with legal obligations with “respect and care”.

In his written argument, Grant argued that Deripaska did not commit the alleged breach of commitments. “Strictly secondarily, and if he did commit a violation, Mr. Deripaska did not know about it. He certainly had no intention of breaking his promises,” Grant said.

Grant claimed that Chernuhin was “aware of the proposal to move EN+ from Jersey to Russia” and argued that every step of the En+ transfer was “highly publicised”.

The judge will rule on the application for the foreclosure in the coming weeks.

Source: https://www.ft.com/content/902a6ce1-1d2c-480d-b76f-a18b5f505392