Cover Story

Oiling up to the oligarchs

8 October 2005

Dominic Midgley on how Britain’s service industries are busy separating London’s free-spending New Russians from their cash

The legal profession — a group of people who have even fewer scruples about the nature of their clients than the banking community — is cashing in too. Given the number and scale of the squabbles that divide the oligarchs, and their willingness to throw money at lawyers in an attempt to obtain satisfaction, they are clients made in heaven. As they often conduct their battles in London rather than in Moscow, where political pressure can be as significant as learned argument in winning cases, it’s happy days for our lawyers. Perhaps the biggest beneficiary of oligarchical largesse in this area is the wonderfully named Skadden, Arps, Slate, Meagher and Flom. Bruce Buck, the American head of its European arm, had been a Chelsea fan for more than 20 years when Abramovich came calling, and he ended up being made club chairman. Now Buck’s company handles much of Abramovich’s legal work including the preparation for Sibneft’s defence in a $1 billion battle with the AIM-listed Sibir Energy that has been rumbling on for months in courts as far afield as London, Moscow and the British Virgin Islands.

It takes two to do the courtroom tango, of course, and Ashursts, who act for Sibir and its oligarch, Chalva Tchigirinski, are also racking up handsome fees. So are the translators working for both sides, who, in a nice cloak-and-dagger touch, are never permitted to translate any entire document for fear that they will learn too much.

Peter Carter-Ruck & Partners are getting a look in, too, thanks to Boris Berezovsky’s determination to sue Abramovich for billions following his sale of Sibneft to Gazprom for £7.4 billion. Berezovsky and his friend Badri Patarkatsishvili were offered just £735 million for their 50 per cent stake in the business less than five years ago and were told that Putin would ‘destroy’ Sibneft if they didn’t take it. At the end of September, those same shares were valued at £3.7 billion and so Carter-Ruck’s Andrew Stephenson is running the rule over his chances of mounting a plausible case.