Abramovich legal victory over Berezovsky provides a timely
reminder of the difficulties of bringing cases involving historic
evidence to trial
introduction
Roman Abramovich, the owner of Chelsea FC, has won his highly
anticipated legal battle with Russian dissident and oligarch, Boris
Berezovsky. We previously reported on the progress in this case
in our earlier briefing.
summary
Mr Abramovich, the one time richest man in Russia, faced the
possibility of losing £3 billion ($4.7 billion) in damages to the
former Kremlin power broker.
At the core of the dispute between the parties were four highly
contentious alleged oral agreements relating to substantial assets.
Virtually every aspect of the alleged agreements was in dispute,
including governing law. The formulation of Mr Berezovsky's claims
changed over time, but in broad summary, he claimed that he had
entered into oral agreements with Mr Abramovich in 1995 and 1996 in
relation to the Sibneft interest, and in 2000 in relation to the
RusAL interest. He claimed that Mr Abramovich coerced him into
selling the Sibneft shares to Mr Abramovich at a substantial
undervalue, and that Mr Abramovich reneged on their agreement when
he sold a 25% shareholding in RusAL to Mr Deripaska, without
consent of Mr Berezovsky and another associate, Mr
Patarkatsishvili.
The events of the case and the outcome are generally well known;
the court ruled against Mr Berezovsky, dismissing all claims in
relation to both Sibneft and RusAL in their entirety.
commentary on judgment
In giving her judgment, Gloster J highlighted some of the
difficulties in dealing with the evidence in this particular case,
which can arise generally in cases involving extensive disputes of
fact, particularly where an oral agreement is at the heart of the
action.
These were:
- all aspects of the alleged oral agreements were in dispute.
There were no contemporaneous notes, memoranda or other documents
recording the making of these alleged agreements or referring to
their terms. Here, such documents relied upon by Mr Berezovsky as
circumstantial evidence supporting his case were usually
considerably later in origin
- the oral evidence relating to the claims was extremely stale.
The court was effectively being asked to make findings based on
limited direct evidence relating to events that had taken place
many years previously. As well as it being difficult to remember
what had happened, witnesses can easily convince themselves that
their recollection of events is the correct one
- the judge found that the parties' evidence shifted or changed
throughout the history of the case to trial, because the case had
been heavily "lawyered" on each side, with lawyers carrying out a
microscopic examination of all aspects of the evidence. She felt
that the very lengthy witness statements relied upon were more
likely to be a reflection of this approach, rather than necessarily
the actual evidence of the witnesses
- the passage of time and the staleness of the claims meant that
some evidence was simply no longer available to the court, which
could have been, had the dispute been resolved nearer the time that
the alleged oral agreements had been made
- the burden of proof was on Mr Berezovsky as claimant to
substantiate his claims. He was the only witness on his side who
could give direct oral evidence as to the making of the alleged
oral agreements and the evidential burden on him was therefore
substantial
- The case turned almost exclusively on issues of facts as
opposed to law, so in the ultimate analysis, the court had to
decide which of the two parties it believed.
The judge found Mr Abramovich to be a truthful and on the whole,
reliable witness; even where there were occasions where his
evidence was inconsistent, or his recollection was incomplete, none
of this undermined his basic truthfulness and reliability as a
witness.
conclusion
Gloster J's comments provide a good reminder to the legal team
in approaching the preparation of a case of this nature. They also
give some insight into the risks in bringing cases involving oral
agreements and historic evidence to trial, and perhaps some
explanation as to why the costs of these cases can be extremely
high, and why such cases are not for the faint-hearted.
