Billionaires Must Face Suit Over Sale of BP Russian Venture

  • Leonid Lebedev claims he's owed $2 billion from Russian deal
  • Parts of suit against Blavatnik and Vekselberg can continue

Billionaires Leonard Blavatnik and Viktor Vekselberg must face a lawsuit by a Russian businessman who says they owe him more than $2 billion from the sale of an oil and gas producer, a New York state judge ruled.

The businessman, Leonid Lebedev, sued the two men in February 2014, saying he was entitled to 3.75 percent of the proceeds of the $55 billion sale of TNK-BP to Rosneft in March 2013. The sale marked BP Plc’s exit from a tumultuous nine-year relationship with its billionaire partners in the joint venture, and Russian President Vladimir Putin’s increasing efforts to stake his government’s claim to the nation’s oil and gas industry. Rosneft is Russia’s largest oil producer.

The two billionaires, who live in New York, had asked State Supreme Court Justice Saliann Scarpulla to throw out the suit, saying that any agreement was only a draft and that state law bars the oral contract Lebedev alleges he made with them unless it could have been performed within a year. Under the deal, Lebedev would have received payments for an indefinite period, the defendants said.

Scarpulla on Wednesday denied the billionaires’ request to toss out three of the four claims in the suit, ruling it was "entirely possible that the contract could be fully performed and terminated within one year." She granted their motion to dismiss a fraud claim and threw out an allegation that the two breached their fiduciary duty by failing to honor a promise to hold the shares of the company in a separate entity.

Lebedev claims the three men held a controlling interest in TNK, which formed the joint venture with BP in 2003 to combine their operations.

“We are pleased with the court’s decision,” Michael Miller, an attorney for Lebedev, said in a statement. “It means that Mr. Lebedev is now one important step closer to vindicating his rights against Messrs. Blavatnik and Vekselberg.”

Arbitration Allowed

Scarpulla turned down a bid by Lebedev to block the defendants from pursuing arbitration in London to determine whether a 2003 agreement extinguished his claims to the joint venture.

“We were pleased that the court yesterday dismissed a number of Lebedev’s claims and said that the document he cited as the principal basis for his claim is not an enforceable contract,” Michael Sitrick, a spokesman for Blavatnik, said in a statement.

Paul Carberry, a lawyer for Vekselberg, didn’t immediately respond to a voice-mail message seeking comment.

The case is Lebedev v. Blavatnik, 650369-2014, New York State Supreme Court, New York County (Manhattan).

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