Russian billionaires Oleg Deripaska and Michael Cherney reached an 11th-hour settlement in a dispute over a billion dollar slice of aluminium giant RUSAL, shortly before they were due to give evidence in a drawn-out London court case. The case, which had been expected to run well into 2013, was due to dwell on allegations of broken promises, criminality and mob rule while shining a light on the murky carve-up of lucrative smelters in the 'wild east' of post-Soviet Siberia.
"Mr Deripaska announces that Mr Cherney's litigation in London against him has been terminated," a spokesperson for Deripaska said in a brief statement. "Neither party will be making any further comment in relation to the litigation or matters raised therein."
Cherney's team released a nearly identical statement. Cherney, born in Ukraine, raised in Uzbekistan, Jewish by creed and living in Israel since leaving Russia in 1994, alleged that metals mogul Deripaska reneged on a deal to buy him out of their joint aluminium business, RUSAL.
Well-connected Deripaska, who controls RUSAL and is a survivor of President Vladimir Putin's crackdown on oligarchs who once wielded great political power, denied having had any such business relationship with Cherney. He alleged he was the victim of a protection racket Cherney helped orchestrate - an accusation Cherney denied. Cherney, who in 2008 won the right to bring his case against Deripaska in London's respected courts - the venue of choice for the warring Russian wealthy - was due to be cross-examined next Tuesday via video-link from Israel. An outstanding arrest warrant relating to a separate money laundering investigation prevents him from travelling to London.
Lawyers were intrigued at the last-minute deal. "The experience in most of these cases is that they do go to trial because no one is willing to back down," said Philippa Charles, a litigation partner at law firm Mayer Brown. "So it's interesting that the level of publicity has perhaps focused the minds of both parties on whether or not it is actually worth having their dirty linen washed in public."
The Russian aluminium industry, like much of Russia's raw materials sector, came under the control of a few powerful oligarchs during the huge selloff of state assets that followed the collapse of communism and of the Soviet Union in 1991. The brutality of the business rivalry over aluminium smelters gave birth to the term 'aluminium wars'. Cherney's case against Deripaska had overtones of a recent battle between Russian oligarchs Boris Berezovsky and Roman Abramovich, which in August helped ensure the concept of "krysha", or roof, was established in English courts.
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