Businessman
Victor Pinchuk was due to bring a $2 billion dispute against two other
oligarchs over the 2004 purchase of a mining company in the Ukraine
Feuding
Ukrainian oligarchs who launched what promised to be one of the most expensive
court cases in English legal history over a disputed business deal, amid allegations of murder,
bribery and political intrigue,
have reached an out of court settlement.
Victor
Pinchuk, a flamboyant businessman who befriended former prime minister Tony
Blair, launched the $2 billion claim against two other oligarchs over the 2004
purchase of a mining company in their native Ukraine.
A
spokesman for Mr Pinchuk announced the case has been settled just three days
before a marathon eight and a half week trial was due to begin at the High
Court in London.
The
court heard in a preliminary hearing last month extraordinary allegations that
one of Mr Pinchuk's opponents in the case, Igor Kolomoisky, was involved a
series of murders and beatings in relation to another previous deal.
Lawyers
for Mr Pinchuk, who once owned London’s most expensive houseand counts Bill Clinton, Sir Elton John and Damien Hirst among his close
friends, argued they should be allowed to
introduce evidence about how Mr Kolomoisky made "extremely vulgar and
strongly expressed" threats of physical violence to a business contact.
Testimony
from a Ukrainian lawyer, Sergei Karpenko, claimed Mr Kolomoisky threatened him
at a meeting in 2003.
Four
days later Mr Karpenko's assistant was badly beaten in the street and the following
month Mr Karpenko himself was attacked with an iron bar and repeatedly stabbed,
the court heard.
Mr
Pinchuk's lawyers said the gangsters who carried out the attack were linked to
Sergei Nikitin, who had been Mr Kolomoisky's personal bodyguard and later ran a
private security company, BOG, owned by Mr Kolomoisky and the other defendant
in the current case, Gennadiy Bogolyubov.
Mr
Nikitin was found dead in a river in Dnipropetrovsk, central Ukraine, just
weeks later on August 30, 2003, having been stabbed 10 times.
The
gangster who carried out the murder was also found dead in what was initially
claimed to be a suicide.
However,
further examination after his body was exhumed showed he had been shot under
the chin, the court heard.
Mr
Kolomoisky "strenuously denies" the claims of any illegal activities.
Although
Ukrainian prosecutors passed a resolution to charge him with ordering Mr
Karpenko's murder in 2005 it was never proceeded with, the court heard.
Mr
Pinchuk's lawyers said a Ukrainian prosecutor had "admitted in a recorded
conversation" that he was promised money by Mr Kolomoisky in exchange for
shutting down the investigation of his alleged role in the murder plot,
although he was in fact never paid.
They
also argued the series of allegations about Mr Kolomoisky were relevant to the
current dispute over ownership of an iron ore mining company, KZhRK.
"Mr
Kolomoisky thinks nothing of making serious physical threats to his opponents,
as well as perverting the criminal process,"Jonathan Crow QC, for Mr
Pinchuk, said at last month's hearing.
"These
are hardly the actions of a man who would hand over the management of KZhRK to
Mr Pinchuk because he was afraid of Mr Pinchuk's ability to stir up false
allegations."
Laurence
Rabinowitz QC, for Mr Kolomoisky, said: "The allegations are hotly
contested and are of the most serious nature conceivable, including ...
allegations that [Mr Kolomoisky] conspired to commit murder."
Mr
Justice Males in the High Court ruled that evidence about the "Karpenko
episode" will not be allowed in the full trial, which was due to begin on
Monday.
The
case - in which legal fees alone are likely to exceed £50 million -
demonstrates how English law courts have become highly popular in the
international business world for the resolution of disputes.
It
comes after another so-called mega-case in which Boris Berezovsky, an oligarch
who had fallen out with the Kremlin in the Nineties, sued Roman Abramovich, the
Chelsea Football Club owner, seeking £3 billion in damages.
Berezovsky
was humiliated in court, lost the case and was found hanged at his home in
Berkshire in March 2013.
The
latest High Court cast a spotlight on what Mr Justice Males described as the
"rough and tumble" world of Ukrainian business dealings at the time.
Mr
Pinchuk, 54, made his fortune through a series of deals, many of them struck
when his father-in-law, Leonid Kuchma, was president of Ukraine.
Mr
Pinchuk began a relationship with Mr Kuchma’s glamorous daughter, Elena — 10
years his junior — in 1997 and married her in 2002.
His
connections have led the defendants in the case to claim he was able to exert
political influence in the country and potentially secure "trumped up
charges" against them, the court heard.
Mr
and Mrs Pinchuk have worked hard to build their reputation on the world stage,
spending large sums on philanthropy but also on one of London’s finest houses -
bought for a record £80 million in 2008 - and an expensive art collection,
including several works by Damien Hirst.
Mr
Pinchuk, worth between £1 billion and £2.5 billion, has befriended both Mr
Blair and Mr Clinton, helping to bankroll the Tony Blair Faith Foundation
with a donation of £320,000 while
giving a further £700,000 to the Clinton Foundation in 2011.
"To
spend money is much more exciting than to make it,” Mr Pinchuk once said.
His
opponents — Mr Kolomoisky and Mr Bogolyubov, both 52 — are estimated to be
richer than their rival, and are more discreet.
Mr
Kolomoisky lives in Switzerland, and Mr Bogolyubov lives in Belgravia, central
London.
Both
men, with a net wealth of about £5 billion, have given large amounts to
charities.
The
central issue of the current case was Mr Pinchuk's claim that he brokered a
deal with his former business partners to buy KZhRK, a former Soviet
nationalised industry, on his behalf but the two men did not deliver on the
agreement.
Mr
Pinchuk has been seeking up to $2 billion in damages plus his original £90
million investment.
Lawyers
for Mr Kolomoisky have previously said Mr Pinchuk's claim "lacks all
credibility".
They
also told the court last month that Mr Pinchuk's lawyers had made a
"startling admission" in previous legal documents that he had hired
private investigators to follow Mr Kolomoisky.
Details
of the settlement were not made available.
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