Berezovsky v Abramovich (Rev 1) [2012] EWHC 2463 (Comm)

“And this story, too, I received without comment in my character of a mute witness of things Russian, unrolling their Eastern logic under my Western eyes”. “, it has to be careful about applying what it might regard as conventional Western European business standards to judge the conduct of businessmen operating in the very different, and largely unregulated, commercial and political environment of Russia at the material times. As I remind myself: “… this is not a story of the West of Europe”

“During the transition from a socialist economy to a market economy, Russia struggled to pass and implement comprehensive and consistent legislation governing business activities. There were gaps in the law, sometimes filled in a stop-gap way by Soviet-era law; there were widespread problems with poor drafting, caused by inexperience and incompetence; and the legislative and administrative process was bedevilled by bitter political fights and intense lobbying that produced unpredictable and inconsistent outcomes. This meant that there was widespread lack of knowledge and certainty about the proper methods of behaviour and documentation.”

“Businessmen operated in the same environment. They could see that due legal process and constitutional rights counted for little in the brutal economic transformation that was occurring in Russia. Courts were notoriously venal and subject to political manipulation. Policemen were often corrupt. The official legislation on ownership, enterprise registration, arbitration and trading was slow in being formulated and refined.”

“… there were inconsistent laws, incomplete laws, missing laws, and (in the very early 1990s) regulations sometimes available only to bureaucrats, all of which led to uncertainty … … … the uncertain Russian legal environment, overly aggressive tax inspectors, outmoded tax regimes based upon turnover, unhelpful obstructionist governmental agencies and bureaucrats, potentially unreliable courts which could be exploited by aggressive competitors, and political uncertainty ….”

“Russian law is made up of federal legislation, presidential decrees, government decrees and ministerial regulations that at times are complemented by regional and local rules and regulations. These bodies of law can overlap and sometimes conflict with one another, with uncertain results. Furthermore, the application of Russian laws by Russian governmental authorities is often subject to a high degree of discretion, which can result in inconsistent stances being taken by different authorities or even within the same authority by different officials. The Russian judicial system is generally untested and may not be fully independent from outside social, economic or political forces. The course of litigation in Russian courts can be slow, and court decisions can be difficult to predict, in part because of limited judicial precedent and experience in free-market commercial matters. Accordingly, an investor may find seeking redress by pursuing an action in Russian courts difficult or impossible.”

“It was impossible to keep hold of the company without krysha. So we required both political and physical krysha protection”. . “Anyone with the ambition to flourish in Russian big business …” opined Professor Service, “… had to hire an apparatus of political and physical protection”

“… if an organisation or individual was known to be associated with a powerful provider of physical ‘protection’, there were great advantages in terms of protection from harassment by criminal elements”

“… in order to help to ensure the development of a stable democratic society and a secure political base for entrepreneurship and the free market in Russia, he would become active in politics Mr. Berezovsky’s written opening submissions, paragraph 173. .”

“34 In the spring of 1993 we completed the construction of the ‘LogoVAZ club’ in Moscow. This became the centre of my business operations and when I was not travelling, I spent almost all of my working time there and used this as the main venue for meetings with my business partners and associates as well as with friends and politicians. When I was working at the LogoVAZ club I would usually have meetings there all day. We had our own restaurant and so meetings would continue as we would move from our offices into the restaurant. I could often work for a period of twenty-four hours or more without leaving the club.”

“A. … again, it’s very important that you understand. I never can make millions, or ten millions, I can make just billions, and I explain you why: because all the time I thought about how to capitalise the country, not the company, yes? Impossible to capitalise oilfields or Sibneft without clear understanding that political situation is stable. And my point was that maybe I was one of the first who recognised that if you have political stability, the value of the company will increase enormously Day 4, page 30. .” ii) Again in cross-examination by Mr. Sumption: Q. Professor Fortescue gives three reasons for regarding you as one of the most politically influential oligarchs: I’m going to list them and then ask you whether you agree. First, your relationship with the so-called family advisers of President Yeltsin; secondly, your close relations with other oligarchs; and thirdly, your control of media interests. Would you agree that those three factors were the main reasons for your political influence? A. I think the main reason is not here mentioned at all: it’s my intellectual capacity Day 4, page 15. It was characteristic of Mr. Berezovsky that he had not bothered to read Professor Fortescue’s report prior to the trial. .”

“Q. I assume that you would accept that your Russian history expert knows about Russian history? A. Definitely he knows. Much less than me, but knows. Q. Would you look at paragraph 83 …. A. Because I made the history; he just learned the history Day 10, page 72. .”

“I changed my recollection many times Berezovsky Day 7, page 74. .”

“MR. SUMPTION: Right. Can you tell us: what other witnesses are due to be called by you in this action stand to gain financially if you win it? A. Witnesses, I don’t know anybody. I have obligation in front of my former wife, Galina, that she will be paid agreed amount of money. As far as witnesses is concerned, nobody, because it’s bribing of the witnesses as I understand.”

“Q. I just want to come back, if I may, to page 147 between lines 8 and 12 because there you say that none of your witnesses stand to gain financially if you win the action. Do you see that? A. Yes, I see that. Q. My question is this: is Mr. Lindley one of your witnesses? A. Yes. My Lady, I have read this transcript on the weekend and I am not correct here because my reflection was that did I give was that: did I pay money for witness, yes? Not witnesses. But it’s not my English, my English is okay. My reflection was wrong. And when I read that, I just -- and if you wouldn’t put me this question, I in any case arise this question. My -- now -- and I return to this point and try to recollect what’s happened. I have agreement with four people more as a beneficiary if I win against of not only Abramovich, against of anyone: Abramovich or Anisimov or Salford or family, yes? And, as I -- as we discussed now, that I have obligations to pay 5 per cent of this tape, for this recording. But additionally to that I have obligations in front of two witnesses and two who are not witnesses, the same obligation. And the reason why I have this obligation because those people participate in all my events which we’re discussing here.”

“… whilst undoubtedly a smooth and well-prepared witness, proved himself to be a thoroughly dishonest and cynical witness as well, willing to perpetuate a false case, not only by giving evidence which he knew to be untrue, but also by calling as witnesses his associates who again, as Mr. Abramovich well knew, gave, as they were intended to do, thoroughly untrue evidence designed only to mislead the court Day 41, pages 8-9. .”

“88. Mr. Berezovsky observed of Mr. Abramovich that “He is good at getting people to like him, and good at psychology in that way. He is good at appearing to be humble”: Berezovsky 4 ¶239 …. Mr. Abramovich’s own Written Closing observed that he “gave careful and thoughtful answers”: at ¶5(4) … It was a highly controlled performance by Mr. Abramovich, who was meticulously prepared for the evidence he would give, and who had worked closely with his witnesses to put forward a story which he calculated would be accepted by the Court. It was also, however, a highly cynical and deceitful manipulation of the trial process.”

“Although all of the commercial relationships and agreements described above were oral and none of them was recorded in writing, I have a clear recollection of what was agreed.”

“I don’t remember the details; it’s a long, long time ago”

“… would work together as partners to acquire the company [that became Sibneft] and would then be partners in the company once we acquired it. The three of us discussed this on many different occasions between January and August 1995, mainly at the LogoVAZ club Berezovsky 4th witness statement witness statement, paragraph 95. .”

“96. Many different aspects of what was a complex project were discussed. Due to the passage of time, and the large number of meetings and discussions that we had, agreement developed through the first half of 1995, and the gist of the terms which were finalised between us.”

“50:50 between [Mr. Patarkatsishvili] and me on the one side and Mr. Abramovich on the other”

“99. It was also discussed and agreed early on that we would all be partners in the project and in the oil company if we acquired one. However, the exact shares which we would each have in the project were not agreed until later on, closer to the time of the decree, in July or August 1995. 100. In the last few weeks before the Sibneft decree, when it became clear that President Yeltsin would be issuing it, Badri proposed that the future company should be owned in equal shares, two thirds for him and me jointly and one third for Mr. Abramovich. I proposed that the ownership should be split 50:50 between Badri and me on the one side and Mr. Abramovich on the other. My reasoning was that Mr. Abramovich would be in charge of the management of the company. I knew that Mr. Abramovich might offer some of the benefits of his ownership of the company to his associates such as Eugene Shvidler. I made this decision on the same principle as I had proposed to share with Badri, 50:50.”

“It was not agreement, you’re absolutely correct. But agreement was that he organise everything and I did not care... which turned out that later on, when we start to buy 49 per cent step by step, it turned out that mainly Abramovich company own that shares. Because, as you understand, 51 per cent still was in management control. And only later on I decide, according to Abramovich again request, because of my dangerous political exposure, to give up to him to hold that Berezovsky Day 4, page 165. .”

“… Mr. Berezovsky and Mr. Patarkatsishvili would continue to be entitled to dividends and any other payments made by Sibneft to its owners on the basis of the percentage split referred to above.” [Emphasis supplied]

“we invest together through our dividends or through our profit generated everything connected to Sibneft”; and that he would be entitled to “whatever we will generate by the new company”; “in different ways, through the other companies but connected to the resources which Sibneft has” in the same proportions as his alleged interest in Sibneft; or to the “shared profit of Sibneft everything which lead to Sibneft generation”; or to “any profit which initially generate by Sibneft, which base of the profit is Sibneft”

“As far as Abramovich is concerned, it’s absolutely correct that it was a right of first refusal”

“We agreed that none of us could sell our shares in what was to become Sibneft without the agreement of the others Berezovsky 4th witness statement, paragraph 105. .”

“It’s absolutely correct, I checked the pleaded statement as well because I put my signature”

“… under the 1995 Agreement there had been no focus on which structures controlled by which of us would be used to acquire interests in Sibneft”

“165 Immediately after the Davos forum, Mr. Abramovich told Badri and me that he was uncomfortable with my active involvement in Russian politics. He said that he was concerned by the stance I had taken against powerful political factions, particularly the Communists, who were building strong public support in anticipation of forthcoming elections and who had re-nationalisation of key industries, including oil, firmly on their political agenda. Although my relationship with President Yeltsin had been key to creating the opportunity for us to acquire Sibneft, Mr. Abramovich considered that my political profile had the potential to have a detrimental effect on Sibneft’s interests. I acknowledged these concerns as having a reasonable basis and took very seriously Mr. Abramovich’s request that I should not publicly put myself forward as owner of Sibneft. 166 During a series of conversations which took place at the LogoVAZ club and at my home in Alexandrovka between March and June 1996 (that is, after the Davos forum and before the first round of voting in the presidential elections), Mr. Abramovich said that he felt very strongly that I should distance myself from the business because I was so involved politically. He also suggested that Badri should distance himself from Sibneft because he was heavily involved with the management of ORT which was to play a decisive role in the elections, was closely associated with me and was well known to be my partner. Although under the 1995 Agreement there had been no focus on which structures controlled by which of us would be used to acquire interests in Sibneft, Mr. Abramovich proposed that from now on he, or his companies, should own all of the Sibneft shares. Badri and Mr. Abramovich’s associate, Mr. Shvidler, were present during some of these discussions.”

“169. As part of our agreeing to what he was suggesting, Mr. Abramovich told us that he would continue to pay us the share of profits we would otherwise have received in respect of our share of Sibneft and that he would, upon request, transfer to us shares in Sibneft equivalent to our 50% interest. He said again to us that we could trust him and I recall him saying to me: “Boris, you understand that I will look after your interest. My interests are your interests, your interests are my interests”

“53. I remember explaining to Mr. Berezovsky [on a Caribbean cruise] that I wanted to combine the Omsk Oil Refinery and Noyabrskneftegaz into a single company, whose management I would control. I explained that there was the potential to make a lot of money by consolidating control over these companies and directing their sales through my Trading Companies. At that time, I thought it was necessary first of all to get management control of the new company and only once that was achieved to then start preparations for the auctions to acquire its shares. I am absolutely certain that at the time he and I did not discuss any ‘loans-for-shares’ programme, because I knew nothing about this at the time, since the idea for such programme itself arose only in the spring of 1995, which I describe below. Although I gathered from our conversation that Mr. Berezovsky knew little about the oil industry, he was clearly excited by the prospect of a business which had excellent potential for the creation of substantial and regular cash flows. For myself, I considered that once I got access to the flow of products and ·could introduce efficiency to the management, I would be able to improve my trading income and so be able afford to pay for protection services rendered to my business. I appreciated from the outset that if he were to provide me with any assistance in relation to the creation of the new company, Mr. Berezovsky would expect a substantial financial reward in return. This was not something I relished but I was realistic enough to know that without krysha my idea of creating a vertically integrated oil company would remain just an idea. We absolutely did not discuss either during the Caribbean cruise or subsequently the idea of Mr. Berezovsky owning half of the company. That frankly did not interest him since our discussion did not assume that the integrated company itself would produce profit, at least not in the short term, and he was only interested in cash flow. I was also certainly not offering to make Mr. Berezovsky a 50% owner in my Trading Companies since I had built my trading business without him. I recall that during the cruise Mr. Berezovsky flew to Moscow and then came back to the Caribbean and we continued our communication. He was then full of talk about OAO Obshestvennoye Rossiyskoe Televidennie (“ORT”), which owned the central Russian television channel, and the importance for him of being able to fund his ORT project. Mr. Berezovsky and I agreed to continue our discussions once we had returned to Moscow. The Understanding with Mr. Berezovsky [as discussed in Moscow] 55. Having explained to Mr. Berezovsky my plan to bring Omsk Oil Refinery and Noyabrskneftegaz together and to direct their sales through my Trading Companies, I asked Mr. Berezovsky if he would be able to assist me with having necessary documents prepared and adopted for the formation of the new oil company. Mr. Berezovsky agreed to provide the so-called krysha in return for payments towards his substantial ‘expenses’. We had a discussion about what these ‘expenses’ were likely to be. He explained that he required money to fund a company which he actually regarded as ‘his’ company, ORT. I was aware from our discussions that Mr. Berezovsky regarded it as a key tool for furthering his political ambitions. I understood from him that one of the conditions of his acquisition of ORT shares from the Russian Government was that he would secure financing for ORT. Some time after Mr. Berezovsky’s purchase of shares, ORT’s management had declared a temporary moratorium on advertising. Without the revenue from advertising, Mr. Berezovsky had an even stronger need for cash for ORT in particular. 56. I recall that Mr. Berezovsky indicated that he would require approximately US$30 million per year for ORT and his personal expenses. That number was discussed during our meetings at Aleksandrovka. I also remember that Mr. Berezovsky inquired how much I could make per year if my idea of creation of a vertically-integrated company succeeded. I understood the inquiry as addressing the total income I could generate from my Trading Companies since at the time that was my only source of income. I formed the impression that Mr. Berezovsky was making his own judgment about which of the many projects he was being offered at around that time would be worth agreeing to support. I knew he needed to be satisfied that I could pay his fee, particularly if the new business was not the success I had hoped. Accordingly, I informed him that I currently generated around US$40 million per year through my Trading Companies and that I expected to be able increase that to around US$100 million per year, assuming I could secure control of a new company comprising both the Omsk Oil Refinery and Noyabrskneftegaz. I am absolutely clear· that he did not fix his fee by reference to 50% of my anticipated trading income or otherwise make any reference to sharing profits. Rather, he told me the approximate fee and asked about my likely income the following year in order to see if I could afford him. 57. His proposed fee was already approximately my entire annual business earnings so I hoped that I would have to cover Mr. Berezovsky’s expenses only after the new integrated company had been created and when I would be receiving additional revenue. However, already in March 1995, he demanded that I make the first payment, which I assumed at the time was his way of both indicating that our krysha relationship had started and also letting me know where the balance of power lay. It was clear to me that he wanted to receive money from me up front, before actually providing any service. 58. Nothing about our arrangement was written down and there was no specific agreement over which of the Trading Companies would provide funds for the payments or for how long the arrangement would last. Nor did we have an agreement as to what particular amounts would have to be paid other than for the first year, and I assumed that this would depend each year on the nature of services to be provided during particular time periods and what the expenses of Mr. Berezovsky and ORT would be. Mr. Berezovsky showed no interest in the Trading Companies or their names, never required me to furnish him with accounts or financial statements for the Trading Companies, and we did not consider formalising what we discussed. Our agreement was a practical arrangement where each party had to prove his worth as events developed and the participants would be bound by mutual understanding; moreover, breaking such an understanding would not only end the relationship but entail certain negative repercussions as well. There were too many uncertainties at that time in Russia about what the future business and political climate would be. We certainly never discussed or agreed about plans to acquire jointly (in any proportions) the oil company. Moreover, there was no discussion about Sibneft cash flows ever becoming the source of funding for Mr. Berezovsky. Nor did we discuss then or afterwards forming a partnership for any such purpose, as I understand Mr. Berezovsky now alleges. No discussions of share acquisition in any proportion 59. When I initially discussed my ideas for creating a vertically-integrated oil company with Mr. Berezovsky in late 1994 and early 1995, we did not talk about his obtaining title to the shares of the new company. When loans-for-shares auctions did come on the scene, which I describe below, I realized that this was exactly the method of obtaining management control over the company without acquiring ownership of the shares. 60. As I have also said above, at that time ownership of companies was not regarded as important and what was typically sought was control over the flow of goods and cash, for which purpose in turn it was necessary to control management.”

“… if [Mr. Berezovsky] were to provide me with assistance in relation to the creation of the new company [i.e. Sibneft], Mr. Berezovsky would expect a substantial financial reward in return.” iii) However, according to Mr. Abramovich, Mr. Berezovsky was not interested in acquiring Sibneft shares, and their discussions were not concerned with share ownership entitlement. In his evidence he pointed out that he and Mr. Berezovsky arrived at their understanding at a time when the oil assets were under State ownership and the loans-for-shares scheme had not yet been proposed, let alone adopted. The possibility that the two Siberian businesses might be wholly or partly privatised was not mentioned at that stage. Mr. Berezovsky’s interest was in obtaining immediate funds or “cash flow” from Mr. Abramovich to finance ORT. Mr. Abramovich observed that this interest in cash flows as opposed to share ownership was typical of Mr. Berezovsky’s modus operandi and, indeed, of the way business was commonly done in Russia at that time. For his part, Mr. Abramovich said that he always envisaged that he might eventually acquire a controlling stake in the company. But his main interest at this stage was in the creation of Sibneft and in getting a substantial degree of management control over it within the state sector. iv) In his oral evidence, Mr. Abramovich accepted that as the project developed, and it became clear that there would be a loans-for-shares auction for management control of 51% of Sibneft’s share capital, and privatisation of the remaining 49%, he discussed with Mr. Berezovsky the acquisition of management control; he said that by October 1995 it was agreed that Mr. Berezovsky would help him in relation to the loans-for-shares auction Abramovich Day 24, page 19-20. . In re-examination, in clarification of a somewhat confused The confusion arose largely because of translation difficulties. passage of evidence given in cross-examination Abramovich Day 17, pages 21-26. , he said that there had been no discussion with Mr. Berezovsky that the latter would help him in connection with the auctions whereby the 49% holding was sold off. v) Mr. Abramovich’s evidence was that Mr. Berezovsky agreed to provide his protection, or krysha in return for payments; Mr. Abramovich’s immediate need was for political krysha, but he was happy to have physical krysha also Abramovich Day 17, page 63; Day 17, page 65. , which the people around Mr. Berezovsky, including Mr. Patarkatsishvili, were in a position to provide; but the latter was not something which Mr. Abramovich discussed with Mr. Berezovsky Abramovich Day 17, pages 70-71. . Mr. Abramovich said: “Indeed krysha was required. It was impossible to keep hold of the company without krysha. So we required both political and physical krysha protection”

“He was interested in the cashflows that I was able to provide”

“I did not know, however, any details about their relationship, It was not something they discussed with me”

“Mr. Berezovsky has said that there was a time when I was his trusted and close business colleague. With the benefit of hindsight, I hesitate to call him a former close ‘friend’, although I felt a strong emotional bond to him and I had previously respected him. For the reasons I explain below, our relationship may not qualify as friendship or regular business association. He did not regard me as an equal. Our relationship was a peculiarly Russian relationship typical for a particular time in Russia’s post-communist history. The Russian word to describe the nature of his relationship with me is ‘krysha [roof]’. A person providing krysha to another was a person who acted as a protector. Krysha could take the form of political protection or physical protection. During the 1990’s and 2000’s, I needed both kinds of protection in order to ensure a sufficiently stable environment in which to build my businesses.”

“The main way in which I was able to persuade President Yeltsin and the government to agree to the creation of Sibneft was by emphasising the importance of ORT for the re-election of President Yeltsin in the following presidential elections, and the need to secure a new business venture which could provide the funding to support ORT ... I discussed with President Yeltsin ORT’s support of the democratic reforms in the upcoming election. I explained that ORT continued to be loss-making and short of funds and said that alternative funding would have to be found in order for ORT to maintain its influence and stage a strong television campaign in favour of the re-election of Mr. Yeltsin, a democratic candidate against the communists.”

“Roman Abramovich (whom you know) will come to you today and explain everything. You can trust him”

“It seems that the public at large have got the impression that the companies are sold. While in fact the companies by no means are sold, the companies are transferred to management for a very limited period.”

“Yes, I shake him [Mr. Smolensky’s] hand and he said, ‘Boris, you are person who I trust’”

“You don’t claim to have had any interest in it [FNK], do you?” he replied: “Interest, definitely. Interest means that Abramovich hold my shares and pay me my interest as dividends or profit from our activity. It depends in general what sense means “interest”

“Accordingly, by the end of 1997 Mr. Abramovich had acquired (as the parties intended) control of a large majority of the shares in Sibneft, 88% in total. In doing so, the only funding actually put in by Mr. Abramovich was the $17.3 million put in by Runicom SA in 1995 – which was re-used in 1997 to fund FNK’s outright purchase of the state’s 51% stake – and $1.5 million in the January 1996 auctions: a total of just $18.8 million in return for obtaining approximately 90% of Sibneft. All other funds used to acquire shares were therefore a result of the efforts of Mr. Berezovsky and Mr. Patarkatsishvili in 1995, in securing support from SBS; in securing control of Noyabrskneftegaz and Omsk oil refinery; and (after January 1996) in enabling Mr. Abramovich to acquire shares in Sibneft.”

“All other funds used to acquire shares were therefore a result of the efforts of Mr. Berezovsky and Mr. Patarkatsishvili in 1995.”

“35. In addition, if I had entered into an agreement such as that described by Mr. Berezovsky, I would have recorded it in writing. My usual practice at that time was to arrange for any acquired assets to be added to my holdings and, if there were partners in the project, to draw up legal agreements in writing in the form of shareholders’ agreements, protocols or memoranda. Mr. Berezovsky seeks to excuse the lack of what would obviously be necessary documentation by making the false claim that I insisted that the agreement between us with regard to Sibneft and all other agreements remain in oral form (Berezovsky 4, paragraph 106). In fact, the only arrangement between us was in the nature of ‘protection’, and we did not discuss any formalising. By virtue of its non-legal nature, ‘krysha’ could not have been the subject of compulsory performance through а court petition. Mr. Berezovsky’s claim that I did not want to formalise our relations in written form, since I was afraid of association with him, is contradicted by my particular efforts during this time to advertise my connection with Mr. Berezovsky and his patronage for my undertakings, including the future Sibneft, as I described in my previous statement. I had no use for Mr. Berezovsky’s ‘secret’ patronage.”

“… would decide in consultation with Mr. Patarkatsishvili what profits from control of Sibneft were free for sharing among the partners, and what profit should be retained or reinvested in the business”

“Such an arrangement would have been simple enough for a document to be unnecessary, and embarrassing enough for it to be undesirable. It is hardly conceivable that the parties could have intended that an understanding which it is common ground required Mr. Berezovsky to use his influence over the President to his own financial advantage and that of Mr. Abramovich, should have been intended as a binding agreement on which recourse might be had to the Russian courts in case of dispute. It is obvious that the arrangement was intended to be binding in honour, not in law.”

“The main way in which I was able to persuade President Yeltsin and the government to agree to the creation of Sibneft was by emphasising the importance of ORT for the re-election of President Yeltsin in the following presidential elections, and the need to secure a new business venture which could provide the funding to support ORT. … I discussed with President Yeltsin ORT’s support of the democratic reforms in the upcoming election. I explained that ORT continued to be loss-making and short of funds and said that alternative funding would have to be found in order for ORT to maintain its influence and stage a strong television campaign in favour of the re-election of Mr. Yeltsin, a democratic candidate against the communists Berezovsky 4th witness statement, paragraphs 111, 115, and cf. paragraphs 117-119, 153. .”

“A. It is correct. Q. So your argument was: in order to fund ORT and support the president’s re-election campaign, I need to have these two Siberian businesses separated from Rosneft and partially privatised so that I can use them as a source of funds for financing ORT’s operations. That was the argument, wasn’t it? A. It was the argument. Q. And it was the argument that succeeded, wasn’t it? A. It was succeeded. Q. Now, the deal therefore, in summary, that you made with Boris Yeltsin was this, wasn’t it: “You, Mr. President, get the support of my television network and I get put in a position where I can extract large sums of money from these two Siberian businesses”? That’s the deal, isn’t it? A. It’s correct.”

“… not to enter into a partnership agreement with Mr. Abramovich under which they would share ownership of shares acquired in Sibneft, and the profits of ownership and control”

“… the acquisition of Sibneft was a unique instance unlike any other loans-for-shares deal, in which control of the company was acquired solely by an individual (Mr. Abramovich) who did not have the political connections to secure the privatisation and acquisition himself, was not either an oligarch or a Red Director of Sibneft, and relied for political support on another individual (Mr. Berezovsky) who, uniquely, elected to take no interest in the company he was expected to secure. Mr. Abramovich also contends that the Sibneft acquisition was unique in that the group which controlled the lender under the loans-for-shares auction (Messrs Abramovich, Berezovsky and Patarkatsishvili) did not acquire ownership of those shares when they were sold, but allowed them to pass to Mr. Abramovich alone.”

“I explained that there was the potential to make a lot of money by consolidating control over these companies and directing their sales through my Trading Companies …. Although I gathered from our conversation that Mr. Berezovsky knew little about the oil industry, he was clearly excited by the prospect of a business which had excellent potential for the creation of substantial and regular cash flows”

“35. This ownership interest in Sibneft was acquired in summary as follows: (1) The original issued share capital of Sibneft was 4,516,396,20 shares. (2) By Decree Number 972 of the Government of the Russian Federation, dated 29 September 1995, the Russian Government approved a privatisation plan whereby 51% of Sibneft’s shares would be issued and transferred into state ownership for three years, and the remaining 49% of the shares would be sold by commercial tender at auction. (3) By a Decree made on or around 30 October 1995, the Russian Government proposed to auction the right to enter into a ‘Loans for Shares’ agreement in respect of the 51% of Sibneft shares retained in state ownership, under which a creditor would loan money to the state and manage the state’s shareholding, and at the end of a period of three years the share would, if the state failed to repay the loan, be transferred to the lender. (4) A company owned and controlled by Mr. Berezovsky, Mr. Patarkatsishvili and Mr. Abramovich, Neftyanaya Finansovaya Kompaniya (‘Petroleum Financial Company’) (‘NFK’), made a bid of $100.3 million in conjunction with Stolichny Savings Bank, and this bid was announced as successful on 28 December 1995. (5) The remaining 49% of the shares were sold by auctions commencing in January 1996. The majority of these shares were acquired by entities owned or controlled by Mr. Berezovsky, Mr. Patarkatsishvili and/or Mr. Abramovich. (6) In May 1997, NFK transferred its rights to manage the shares to Finansovaya Neftyanaya Korporatsiya (‘Financial Petroleum Corporation’) (‘FNK’), another company owned and controlled by Mr. Berezovsky, Mr. Patarkatsishvili, and Mr. Abramovich. (7) In about October 1998, the State failed to repay the loan, and its 51% shareholding was transferred to FNK as envisaged in the Decree pleaded in subparagraph (3) above. (8) On 16 December 1998, Sibneft issued another 224,093,389 shares to various minority shareholders of Sibneft’s subsidiary companies. (9) At all material times after December 1998, the share capital of Sibneft was 4,741,229,639 shares. Approximately 86% of the issued share capital had been acquired by entities on behalf of Mr. Berezovsky, Mr. Patarkatsishvili and Mr. Abramovich.”

“Mr. Berezovsky made it clear that it was his understanding that his entitlement to Sibneft profits extended to profits derived from owning Sibneft, however and by whatever corporate vehicle Mr. Abramovich caused them to be earned.”

“do[es] not accept … that those particular sums that Mr. Abramovich asserts were paid were in fact the sums that were paid”

“… clearly untrue. It was evidence which was (1) the product of collusion between witnesses; (2) reconstructed, following disclosure, from documents without any genuine recollection; and (3) in parts, demonstrably false.”

“129. However, before long, Mr. Berezovsky began to widen the scope even further and there was a sense of ‘ORT Project’ or rather ‘Project Boris’ i.e. we were expected to meet all the expenses that went along with elevating and maintaining Mr. Berezovsky’s position as a powerful and wealthy man. This was supposed to be our ‘insurance policy’ to make sure that we retained our control of Sibneft. We paid for his house in the South of France as part of Project Boris. Mr. Abramovich told me at the time that Mr. Berezovsky had asked for money for a house in the South of France, which Mr. Berezovsky had said he needed for entertaining consistent with being the controller of a major TV company. Mr. Berezovsky would regularly send us invoices related to other businesses or for personal items, on the basis that it was necessary to enhance his standing.”

“I think whatever Mr. Berezovsky says was ORT was ORT”

“Payment under Settlement Agreement”

“Q. This document does indeed show a payment from Runicom SA to LogoVAZ in September 1995 but it refers, Mr. Abramovich, to payment under a settlement agreement. Are you suggesting that Runicom SA was issuing false invoices that misrepresented what the payments were being made for? And my question to you, if you’re suggesting that this was not a payment being made under a settlement agreement, is whether your suggestion is that Runicom SA were issuing false invoices that misrepresented what the payments were being made for? A. Now, if I understand you correctly, this settlement agreement - or that name, it’s a very broad term, and I’m sure that that document was executed at that time because otherwise the bank, the paying bank, would not have accepted this payment and would not have made the payment. So there is nothing false about it. Q. So is your evidence now that this payment was made as a result of some agreement called the settlement agreement between Runicom SA and LogoVAZ? A. I can only speculate. It’s been a long time and it’s very hard for me to recall. But if it says what it is, then this is what it is. But I can comment why that money was needed. Q. What I’m interested in is why it was paid, Mr. Abramovich, because if you say there was a settlement agreement and it was paid as a result of a settlement agreement, then I suggest to you that is not consistent with this being paid as krysha. A. If I recall correctly, Mr. Berezovsky demanded that that payment be made and he needed this in order to pass it on to Mr. K[h]orzakhov Alexander Korzhakov, Head of the President Yeltsin’s Security Service, 1993-1996. later on. Part of it was paid in hard cash and part of it was in non-hard cash, i.e. bank transfer.”

“… had been able to locate the employment records for ‘Ivan’ - Ivan Surov - who worked at the LogoVAZ club.”

“Mr. Surov was first employed on 4 December 1996, very much later than the time when Ms. Goncharova claims to have interacted with him there” and accordingly “her recollection was false”

“Q. Sibneft didn’t make a single penny of profits in 1996, did it? A. Mr. Sumption, I explain you again and I agree again -- explain to you again: they use all company, all oil company, the same way. Company itself was not profitable but they make money trading oil abroad and selling for the other price. Nothing changed that time. Q. You have no knowledge, do you, of what the trading terms were between Sibneft and those to whom it sold export oil? You have no personal knowledge of that at all, do you? A. About how they deal -- how the -- what is technology of this deal? Q. No. As I understand it, the last answer that you gave was talking about transfer pricing. Right? A. It’s different terminology. Some use transfer pricing, some use different pricing, but I learned that only after. I didn’t know these words before. Q. You still have not got the faintest idea, have you, of what the terms of trading were between Sibneft and those to whom it sold oil? A. Mr. Sumption, I am sorry for this example. When I present my PhD, I try to explain it to my mum -- she doesn’t have this education like me -- because the sense of the problem I understand well, anyone in the world. I heard by TV that you have the greatest mind in England, I accept that; but believe me this is not your level, a little bit less, to understand what means to get profit from abroad when you sell in the country. Q. Do you actually know anything about the terms of trade between Sibneft and those to whom it sold oil? A. I don’t know anything about the terms I know how it was done. Q. How do you know how it was done? A. Because it was common knowledge. Every oil company, they have done the same, and Khodorkovsky is in jail because of that. Q. You don’t know at all? A. It’s common knowledge for everybody who knew a little bit. It’s known, it’s common knowledge. Q. You say that other companies engaged in transfer pricing and therefore you assume that Sibneft did, but you don’t know at all, do you? A. Mr. Sumption, I knew that at all. Excellent. I knew -- I don’t knew any details but I knew the construction. It’s very simple and you know that See Berezovsky Day 5, page 118 et seq. . … Q. Now, you have just suggested, in the answer that you last gave, that the profits generated by Sibneft ended up with Runicom. That’s what I understood you to suggest. A. ‘Ended up’? (Consults interpreter) Sibneft itself that time did not generate the profit. Sibneft that time generate oil and refinery of oil and sell it to Runicom and then Runicom generate the profit because Sibneft -- it was exactly what happened in Soviet Union when Sibneft was vertical-integrated company: one company produce oil, the second company refinery oil, the third company sell oil. The company which produce oil didn’t get anything because they just produce oil; that’s it. It’s expensive, it’s not a profit. The company that refine it, they also don’t produce the profit: they produce the product which is profitable. And then only on the last stage it was -- the company who sell all that, this company generate the profit. It’s happened at the beginning that all oil company tricked. What does mean ‘tricked’? They sell oil and product which produced refinery company with low price, then sell this -- produced price, then sell it to another Russian company and companies sold abroad and after that it generated profit. It’s what Abramovich has done and all other oil company have done See Berezovsky Day 6, page 31. .”

“… as Sibneft prospered and Mr. Abramovich was in a position to pay more, Mr. Berezovsky demanded more” that meant that Mr. Abramovich accepted that there was a correlation between Sibneft profits (in the expanded sense used by Mr. Berezovsky) and payments to Mr. Berezovsky; and ii) second, that because Mr. Abramovich’s own case was that, in 1995, he expected to make about $60 million from his influence gained over the companies to be placed into Sibneft, by increasing his profits from $40 million to $100 million, and expected to pay about $30 million to Mr. Berezovsky (i.e. 50% of $60 million), that demonstrated the relevant correlation; and although it was controversial whether any such payments were actually made in 1995, the expectation that Mr. Abramovich would pay 50% of his generated profits to Mr. Berezovsky was plainly consistent with the 1995 Agreement. Indeed Mr. Berezovsky’s written closing submissions asserted See paragraph 358(1). : “Mr. Abramovich’s evidence is also that it was agreed that Mr. Berezovsky’s reward for performing his side of the bargain would be 50% of this profit, i.e. in the first year $30 million.” [Emphasis supplied]

“He was interested in the cashflows that I was able to provide. Abramovich Day 17, page 51. ”

“69. Mr. Berezovsky was never interested in the activities of my Trading Companies or Sibneft. He was concerned only about my ability to pay and he just assumed that I would pay whatever he asked and that, if I had a cashflow problem, I would let Mr. Patarkatsishvili know there would be a slight delay in making payment. … 131. For the larger payments, it was generally Mr. Shvidler who, after discussing them with me, supervised the logistics, often communicating with Mr. Patarkatsishvili to make sure Mr. Berezovsky received them. Mr. Shvidler sought to protract and delay payments where possible, as well as source them from alternating Trading Companies in such a manner that they would not disrupt their cash flows and activities. 132. Mr. Berezovsky’s demands were not tied to any notion of a ‘share of profits’ - be it of Sibneft or any other company. Mr. Berezovsky never asked me to provide to him any official profit and loss position for either Sibneft or any other company under my control. 133. He only seemed to be interested in whether I had sufficient cash available to afford his demands for payment. I would sometime refer to limitations in cashflow in different companies as a reason to defer payment or negotiate a proposed amount. By the end of 2000, he and Mr. Patarkatsishvili seemed to have made their own back of the envelope calculations of what I was earning from my different businesses as a basis upon which to suggest that I had enough cash to pay their demands but again this was all about access to cash and not about profit. 134. For example, when in 1998 the oil prices hit the all-time-low of about $8 per barrel, and I was losing money in the oil business, Mr. Berezovsky still expected me to pay his demands, and I had to do so. 135. I never got involved in the details of payments and I do not remember the specifics of the 1997-1999 credit agreements alleged by Mr. Berezovsky but from the amounts and the currency, these could relate to the French property he asked me to purchase for him. I have some recollection that the idea for providing Mr. Berezovsky loans instead of cash payments might have originated from his desire to avoid French transaction taxes.”

“Q. Now, you say that these payments represented your share of Sibneft’s profits. How do you know that? A. I don’t know that at all. Mr. Abramovich told me that he has obligations to hold my shares and to pay me according of profit which these shares generate finally. Q. What steps -- A. I didn’t have any idea how much company generate and so. Again, mainly -- not mainly -- Badri was responsible to cooperate with Abramovich for checking how is everything going and time to time Badri put me that, ‘Boris, everything is going well’”

“MRS JUSTICE GLOSTER: My question for you is this: was there any formal or informal process whereby Badri or you, or staff on your behalf, would audit the profits that were being generated by Sibneft? A. I don’t know anything about formal process. I just know about regular meetings Badri with Roman and maybe with Shvidler as well, as I understand, when they present him report what happened in the company. And that is as money is concerned. MR. SUMPTION: What steps did you understand that Mr. Patarkatsishvili had taken to ascertain what were the profits of Sibneft? A. I don’t have any idea. I don’t have any idea. I think as we agreed in our agreement as we agreed in ’95, we trust Abramovich and we didn’t have time to manage the company and to send audit and so. It’s not -- already not trust at that time in our understanding.”

“The stronger Mr. Berezovsky became, the more money he required to maintain his position. Typically, around the beginning of each year, we would discuss with Mr. Patarkatsishvili the amount that Mr. Berezovsky expected to receive from me that year given his political expenses, such as the financing of ORT, maintenance of his political image, financing of various mass media, and also his ‘expenses’. In 1996, I recall that I paid him approximately US$80 million (this large amount was attributable to the elections held that year), though that year was difficult for me as considerable funds were spent on privatisation. Then in 1997, I paid around $50 million and around the same amount in 1998, despite the shortage of cash caused by the financial crisis. In 1999, I also paid about US$50 million.”

“A. It’s almost always we had agreed in advance how much would be paid on an annual basis. Sometimes we were not able to pay the whole amount and then there was a spill-over for the next year. … A. What I mean is that we never had an arrangement whereby, for instance, we would let them -- all the $50 million -- let them have the 50 million together. The arrangement was that they issued requests and then in response to their requests we made the payments.”

“I never calculate numbers and my relations was absolutely simple: I made request directly to Abramovich or Shvidler or indirectly through Badri. If Abramovich was able to pay, calculating what is our interest, Badri and me together he paid that. If he was not able to do, he said ‘Boris, we don’t have money now to spend because we invest if to buy something or because company didn’t generate this money’ Berezovsky Day 6, pages 86-87. .” “I told Badri, ‘Badri, we need that and that, for reason of ORT or for reason of charity or personal reason to buy jewellery for Elena’, and Badri calculate with Roman what is opportunity to pay or not”

“My understanding is that the way Boris received this money was very ad hoc. There was no single arrangement by which he would always receive money. Rather, he would identify some personal asset which needed to be paid for and would inform Badri or Mr. Abramovich or his team what it was and who the money needed to be paid to, and they would arrange it. This could, for example, be for jewellery for Elena Gorbunova, for real estate or whatever Nosova 2nd witness statement, paragraph 203. .”

“Q. That is a correct description, isn’t it, of how this worked? A. This is partially correct description but it doesn’t mean -- Q. It’s not partially correct -- A. Sorry -- but it doesn’t mean that it’s incorrectly what I said before: that Badri and Roman calculate the balance all the time. This is the point, and this is a key point.”

“131. As I have already explained, one of my key roles was to monitor the cashflow position in Mr. Abramovich’s various businesses. I needed to know the state of our cash flow online. I recall that I asked Ms. Panchenko at the end of 1999, to have her team prepare for me a global cashflow balance and have it updated monthly. I wanted to be able to see at a glance the cash position of all the various projects. I remember explaining how I wanted the information presented. This cashflow information was known as the ‘Bolshoi Balance’ (literally the ‘big’ balance). I am aware that Ms. Panchenko regarded the presentation of the information in this way as ‘accounting heresy’ but it was a management and not an accounting tool. The Bolshoi Balance was not intended to provide information on profits and losses relating to specific projects but it did enable me to track cash effectively. 132. I understand that in the course of reviewing computers for the purposes of disclosure in this action, the Bolshoi Balance for 2000 plus similar information produced in 2001 and 2002 were located. As the Bolshoi Balance also contains a complete record of the payments made to Mr. Berezovsky and Mr. Patarkatsishvili in 2000-2002, we have disclosed the entirety of the documents, even though much of the information is unrelated to Mr. Berezovsky. This was not a document prepared for him. We did, however, extract some of the information on this Bolshoi Balance into a separate table called the Fom table (short for ‘Fomichev’, a reference to Mr. Ruslan Fomichev) which summarised the payments made to Mr. Berezovsky and Mr. Patarkatsishvili. The Bolshoi Balance does not explain the sources of payments to Mr. Berezovsky and/or Mr. Patarkatsishvili but shows the availability of funds at a specific point in time within the companies relating to a given project. … 146. It can be seen from the Fom table that in 2000, Mr. Berezovsky and Mr. Patarkatsishvili were paid a total of $491 million. This was a vastly different level of payments to that made in previous years but the year 2000 was different in a number of key respects. In previous years, Mr. Berezovsky was paid around $50 million each year (although in 1996 it was around $80 million). In 2000, I recall that the intention was to pay Mr. Berezovsky around $50 million but, as matters developed through the year, this amount increased. To the best of my knowledge, Mr. Abramovich did not fix the annual amounts according to any partnership share or accounting process because I am certain that he would have been asked me to obtain the relevant figures. I was never asked by Mr. Abramovich or Mr. Berezovsky/Patarkatsishvili at any time to provide them with a summary of Sibneft profits or trading group profits or profit from any other ‘situation’, project or group of assets belonging to Mr. Abramovich for the purpose of calculating what Mr. Berezovsky should be paid. My understanding was that from 1995 to 1999 all agreements regarding payment totals were made by reference to what Mr. Berezovsky needed to maintain ORT and his own status. 147. Things were different in 2000. At the beginning of 2000, Mr. Berezovsky was one of the most powerful men in Russia. His close friend Mr. Putin was the new President. By June/July 2000, however, I recall that Mr. Abramovich indicated that Mr. Berezovsky was going to need around $150 million for the year as I was asked to review whether we had available cash. I was not, however, asked by Mr. Abramovich or anyone else to ‘account’ for profits or provide any financial information for any other company or business owned or controlled by Mr. Abramovich in agreeing any increase in the figure. 148. Around September/October 2000, things changed again with respect to Mr. Berezovsky’s position following his public reaction to the Kursk submarine tragedy and I discuss this further below.”

“I mean, at that time again these issues of suspicion on the side of the foreign banks towards money-laundering operations of Russians was really widespread, so every time we were facing extreme level of control from the banks. So they had to be really satisfied in order to proceed with the money originated or belonged to wealthy Russians. And, you know, Berezovsky was an extreme case. Everybody knew that he is a - he just became an enemy of the state, left the country. So it was in the air, it was in the media at that time.”

“… one could say that they can’t demand from me more than the company can make. To some extent, yes, you can make this conclusion …”

“… In a case in which the terms of the contract are based upon conduct and conversations as well as letters, most people would find it very hard to understand why the tribunal should have to disregard the fact that Mr. Lovatt and Mrs. Carmichael both agreed that the C.E.G.B. were under no obligation to provide work and the respondents under no obligation to perform it. It is, I think, pedantic to describe such evidence as mere subjective belief. In the case of a contract which is based partly upon oral exchanges and conduct, a party may have a clear understanding of what was agreed without necessarily being able to remember the precise conversation or action which gave rise to that belief. As the Court of Appeal pointed out, the tribunal did not make any specific findings about what was said at the interviews or on any other occasion. But the terms of the engagement must have been discussed and these conversations must have played a part in forming the views of the parties about what their respective obligations were. The evidence of a party as to what terms he understood to have been agreed is some evidence tending to show that those terms, in an objective sense, were agreed. Of course the tribunal may reject such evidence and conclude that the party misunderstood the effect of what was being said and done. But when both parties are agreed about what they understood their mutual obligations (or lack of them) to be, it is a strong thing to exclude their evidence from consideration. Evidence of subsequent conduct, which would be inadmissible to construe a purely written contract (see Whitworth Street Estates (Manchester) Ltd. v. James Miller and Partners Ltd. [1970] A.C. 583) may be relevant on similar grounds, namely that it shows what the parties thought they had agreed. It may of course also be admissible for the same purposes as it would be if the contract had been in writing, namely to support an argument that the terms have been varied or enlarged or to found an estoppel.” [Emphasis supplied]

“Now, so far as Berezovsky is concerned and the mention of Berezovsky, the market has always believed that Sibneft belongs to Mr. Berezovsky and we have never tried to fight against those rumours inside Russia. The concept of krysha presupposed that it looked like the whole thing belonged to Berezovsky one way or another, in different shapes or forms That was the whole point of this arrangement. He was the ice-breaker who removed all problems, resolved all problems, and that’s what he was being paid for.”

“FNK, SINS, Refine Oil and RUNICOM Ltd are all privately held companies and have close connections with the current management of Sibneft. As such, more than 97% of the Company [Sibneft] is currently controlled by the Company’s managers and a small group of private Russian investors. An influential Russian figure, Boris Berezovsky, who is currently the Deputy Secretary of the Security Council of the Russian Federation, served on Sibneft’s Board of Directors until October 1996 and was chairman of NFK when it won the right to manage 51% of Sibneft’s shares in the loan-for-shares programme. Mr. Berezovsky does not own or control, or have any other interest in, any shares in Sibneft, directly or indirectly. He does, however, maintain a close relationship with certain members of the senior management and the Board of Directors of the Company.” [Emphasis supplied.]

“195 In the middle of 1997 Sibneft published an offering circular to raise money on the international markets by selling $150 million of Floating Rate Loan Participation Certificates. I was not involved in the preparation of this Offering Circular, but Boris told me that Mr. Abramovich consulted with Boris and Badri about it before it was published. 196 In the preparation of this Offering Circular, I was aware of the fact that Mr. Abramovich had agreed with Boris that there should be a statement in the document confirming the agreed public position which they were adopting: i.e. that Boris did not have an interest in the company. This reflected the aims of the 1996 Agreement, to distance Boris from the company. I believe it was probably also thought that including a statement like this would reduce the concerns of investors about political risk from Boris’s involvement. In the period before this Offering Circular was issued, it was very widely reported and well-known that Boris had an interest in Sibneft. 197 I was not particularly concerned about the inclusion of this statement in the Offering Circular. I believed that, as a result of the 1996 Agreement, the statement was technically correct since Sibneft was held by Mr. Abramovich. As I have explained, I was very against the whole notion that Boris and Badri’s interest in Sibneft should be held by Mr. Abramovich. The whole idea was one which I thought was dangerous. However, once that arrangement was in place, I did not think that one particular statement like this one was any more of a problem. It was agreed between Boris, Badri and Mr. Abramovich that Boris and Badri would keep their interest in Sibneft secret, and this was just one example of them doing that.”

“Although some of my colleagues had reservations about Mr. Berezovsky, at this early stage I considered my association with him to be an asset. For example, the offering circular for Sibneft’s $150 million Floating Rate Loan Participation Certificates in August 1997 stated that although Mr. Berezovsky did not have an ownership interest in Sibneft, ‘He does, however, maintain a close relationship with certain members of the senior management and the Board of Directors of the Company.’ This reflected my desire to keep my association with Mr. Berezovsky public at that time.”

“54. Contrary to what Ms. Nosova suggests (Nosova 2, paragraph 195-96), I did not discuss with Messrs Berezovsky and Patarkatsishvili the prospectus for the issue of Eurobonds prior to its publication. I also did not clear with Mr. Berezovsky the statement in that document confirming that Mr. Berezovsky did not have any interest in the company. This statement was not a deliberate act to distance Mr. Berezovsky from Sibneft. It was rather a true statement designed to clarify any false perception in the minds of potential investors that Mr. Berezovsky had any ownership or control over Sibneft. The statement was unrelated to any alleged 1996 Agreement. It may be that Mr. Berezovsky read the relevant part of the prospectus and agreed with its contents but, if so, he and I did not discuss it. I would have had no reason to discuss with him a statement which we both knew was true - Mr. Berezovsky was not a Sibneft shareholder and he did not exercise any control over Sibneft. I do not know if anyone in the Salomon team responsible for the drafting of the prospectus discussed it with Mr. Berezovsky.”

“I would have been very surprised if there were any discussions about Mr. Berezovsky owning interests in Sibneft around the time of the auction in 1997 because I was involved with the making of public statements at that time which said the opposite. … Apart from the fact that Salomon Brothers and the lawyers, Cleary Gottlieb, had to satisfy themselves of this issue, Mr. Patarkatsishvili was a director of Sibneft at that time, as was Mr. Smolensky. It is difficult to see how either of them could have allowed that statement to go out if they also had not believed it to be true. I also do not believe that Mr. Abramovich would have allowed that statement to be included if he knew it was not true. There had been press comment to the contrary by that stage and this was an important statement in the context of the offering.”

“10. The reason why this particular statement was contained in the Offering Circular was, as I recall, because Mr. Berezovsky’s association with Sibneft was one of the issues raised by investors. In particular, I recall being made aware of the reluctance of many in the market to be associated with any company which Mr. Berezovsky owned or part owned. I understood that the negative reaction of some investors to any sign of Mr. Berezovsky’s ownership was due to his well-known association with criminal elements and what investors described to me as his ‘Godfather’ like figure (with all the mafia related connotations of that term, including treating people and businesses as personal property). Indeed, by that time, there had been consistent media reports concerning Mr. Berezovsky’s alleged ordering of contract killings of various well-known Russian politicians and journalists. The most well-known of these was the 1996 Forbes article accusing Mr. Berezovsky of masterminding the March 1995 murder of Vladislav Listiev, a Russian journalist who at the time served as the General Director of OAO Obshestvennoye Rossiyskoe Televidenie (“ORT”). Investors are inherently conservative and, in my experience, generally react negatively if a company is too strongly associated with figures who have anything other than a business focus. In the case of Mr. Berezovsky, there was not only his reported connections with organised crime and the Chechen rebels, but also his strong political agenda, all of which gave rise to the perceived risk that he was not interested in the long term strategic vision of Sibneft. Rather, he was seen as someone who might potentially loot any company with which he was associated to satisfy his own personal agenda, as was suggested by the same 1996 Forbes article. Unsurprisingly, investors usually prefer business people who are clearly focused on introducing cost efficiencies and building a serious and profitable company. In fact, this is exactly why Mr. Abramovich’s ultimate ownership of the company was by 1999 generally perceived as an attractive factor by the investment community, as by that time Mr. Abramovich had already become known as a strategically minded and principled businessman, which tremendously enhanced investors’ confidence in the company. 11. Given the concerns of some investors, therefore, it was necessary for the Offering Circular to make a specific disclosure reference to Mr. Berezovsky and make it clear that, although he did maintain a relationship with Sibneft’s owners and managers (as had been already reported in the media), that relationship was not based on any actual ownership in the company. This was done to assure investors that Mr. Berezovsky had no right to influence the company’s affairs. On the other hand, the realities of Russian oil business at the time necessitated an association with people like Mr. Berezovsky because of the need for a strong ‘krysha’ (‘krysha’, meaning literally ‘roof’ in Russian, in this context means political support and physical protection). Investors would have been aware that the fortunes of an oil company are entirely reliant on its ability to replenish its reserves, which is achieved both through obtaining new licenses from the government (usually at auction) and by buying existing oil concerns (which, at the time, were almost all government owned). Political support is therefore essential to an oil company and, at that time, Mr. Berezovsky was a prominent political figure. The oil business had also been (and still was at that time) plagued by violence and organised crime connections. The fact that there was someone like Mr. Berezovsky associated with the owners also gave at least some investors a positive signal that to some extent, and at least temporarily, the company had some protection against a certain kind of interference. At Salomon Brothers, we had dealt with the Russian oil business on prior occasions and, as such, were well versed in these realities.”

“1. I am Vice President of Sibneft, which is one of the largest oil companies in Russia; in 1996 the company produced approximately 6.2% of the Russian crude oil, and refined approximately 9.1% of the total Russian throughput; the company’s total sales in 1996 were $3.1 billion. Boris Berezovsky was involved in establishing Sibneft when it first came into partly private ownership in 1996; the company is now entirely privately owned. Mr. Berezovsky served on Sibneft’s Board of Directors until October 1996; whilst he no longer has any role in the management of the company nor any shareholding, he tends still to be publicly identified with the company. 2. As a senior executive officer of Sibneft, I have been personally involved in the company’s efforts to raise capital for its business; I have had frequent dealings with people in London, because of the City’s importance as a major financial centre. Because of the association of his name with Sibneft, I have often been asked to explain Mr. Berezovsky’s connections with the company; in my experience, financial analysts at reputable broking firms, banks and financial institutions in London, conducting due diligence on behalf of potential investors will make enquiries concerning Mr. Berezovsky as part of the process. It is apparent to me that Mr. Berezovsky’s name is well known within the City of London. 3. During the course of my dealings with London based financial institutions, the article written about Boris Berezovsky by Forbes magazine, entitled ‘Godfather of the Kremlin’ has frequently been mentioned to me. It is stated in the article, wrongly, that Mr. Berezovsky ‘has acquired at least 80% of Sibneft, one of Russia’s largest oil companies;’ anyone therefore who checks will automatically be able to access the article on the Internet. Not surprisingly, I have received a great deal of negative feedback from investors, including those in the UK, who have expressed concern about Mr. Berezovsky’s role in the company and, in the light of the Forbes article, how that may affect their shareholding. This leaves me in no doubt about the detrimental effect of the Forbes article upon Mr. Berezovsky’s reputation and upon the reputation of companies with which his name is associated amongst the financial community in London. 4. By way of example, individuals at Salomon Brothers expressed directly to me their concern about the allegations made against Mr. Berezovsky. This occurred during the summer of 1997, when Sibneft became the first Russian company to place a corporate Eurobond on the market, to the value of $150m. Seventy percent of that bond was eventually placed in London. A copy of the prospectus is now produced and shown to me marked “ES1”

“… accept[ed] this position but on the other hand he present me Eurobonds certificate where it was written that I never had - in very strong terms, that I never had any connection, which definitely could be helpful for me for Forbes case but was not true at all Berezovsky Day 4, page 82. .”

“For me it was the best if this certificate in this way was presented to Forbes magazine. It stressed that I don’t have any connection to Sibneft at all and it’s very -- it could be very useful for me. But I insist when I have seen this certificate that Mr. Shvidler put in his witness statement the reality and not dream, yes?”

“I am not a Sibneft stockholder, and I have said that many times, although I was lobbying [for] the creation of this company and I have strategic interests within this company and in relation to it.”

“I was participating in setting-up of Sibneft as a lobbyist, not being a shareholder of that company”

“Our new clients are Boris Berezovsky and Arkady Patarkatsishvilli [sic]. … Most large Russian businesses needed political clout to be favoured in the State sell off of significant assets. Thus BB and AP were able to buy control of Sibneft, the fourth largest oil company, and subsequently have acquired 70% of Russia’s aluminium smelters and have created a new holding company called Russian Aluminium to own all their aluminium holdings. Russia is the 2nd largest producer in the World, thus Russian Aluminium is one of the largest in the World. These two holdings are the primary generators of their profits and will represent two of the key holdings within the structures that we are creating for them. The master trusts for BB and his family are Isle of Man trusts (Hotspur). The master trusts for AP and his family are Gibraltar trusts (Octopus). Under each top trust are 24 trusts that each own a subsidiary company (we are using 8 IOM, 8 Gibraltar and 8 BVI for each structure. These companies will own up to 4.9% each in the Mauritian funds. Each Group has seven Mauritian funds called Grosvenor for ‘O’ and Warwick for ‘H’. The funds will own their shares through wholly owned subsidiaries, either Cypriot companies or using the Netherlands /Malaysian combination. We will start by moving the Sibneft holdings in to the funds in about ten days. These holdings are owned through Cypriot companies mainly today. The ratio between ‘H’ and ‘O’ in regard to Sibneft are 33:17. The amount of Sibneft that will be held by ‘H’ and ‘O’ combined will be 44% of 100%. BB and AP also own a large stake in Aeroflot and Transaero along with other holdings. … Other assets that we have to deal with include cars (Rolls Royce Corniche, BMW X5, sundry MBs etc.), planes (costing $70 million), yachts (two presently worth around $40 million), holdings in other businesses, other properties, trusts for previous wives, etc. We are presently dealing with the holding structures. Having completed this task, we are to turn our attention to the trading structures for Sibneft and Russian Aluminium. They will be in addition to the fees that I negotiated for now for the holding structures and trusts, their formation and ongoing administration. The first year fees excluding disbursements and extras (for holding houses and the additional trusts) total about $1.6 million. … Peter and I cannot see any reason to refuse accepting BB and AP as clients and to create the master structures to hold their assets for themselves and their families thus enabling them to leave their wealth under Common Law”

“During the meeting, Peter Bond asked the attendees what the principal motivating factors were in establishing the structure and why there was such a high degree of sensitivity and confidentiality. Hans Peter Jenni answered this question and stated that there were various reasons for the complicated and confidential structure:- 1. Hans advised that there was no suggestion of illegality or criminality in these matters. There were several parties who could be interested in our client’s affairs including - commercial competitors, organs of the Russian State. Hans advised that the continuing power struggle in Russia made matters volatile at the present time and that they wanted a structure in place that would be difficult to breakdown if attacked by any interested party. In other words, the structure was set up in such a way to protect against ‘political unrest’. 2. Hans advised that in the past the client’s affairs had been run on an ‘informal’ basis. This structure had been set up to hold the client’s assets in a more formal basis and create a compliant structure for the future. 3. Hans also advised that the structure had been set up in such a way to create as much confidentiality as possible. The idea being that if the structure is ever attacked by any ‘interested party’ each segment of the structure would stand -alone.”

“BEREZOVSKI [sic] and BADRY together held 48% of the shares”

“I understood well that the words are not enough; you need to present the picture which they want to have.”

“28 During the times that I saw Mr. Abramovich and at the dinners we had in London, Sibneft would be discussed. These discussions were not in the nature of in-depth discussions, but rather we would talk about Sibneft in passing. For instance, I recall Mr. Abramovich saying at dinner that Boris, Badri and he were pleased with the progress they were making. At no point during any discussions with Boris, Badri or Mr. Abramovich (together, in combination or separately) have I ever heard any suggestion that Sibneft was Mr. Abramovich’s project alone, or that it was a project in which Boris and Badri were in some way simply helping him out. Nor have I ever heard it suggested that Boris and Badri did not have an interest in Sibneft. The opposite is true. Mr. Abramovich, when talking of Sibneft, would always talk in terms of ‘we’ and never ‘I’. Boris and Badri did the same. I recall Mr. Abramovich coming into the LogoVAZ club one time in 1998 or 1999, saying ‘We are having problems right now’ and setting out how ‘we’ - being him, Boris and Badri – were concerned about some particular problem with Sibneft. It was always very clear that the project was a joint one and that each party had a significant interest in Sibneft. 29 When I say ‘each party’, it was my understanding from the conversations for which I was present and which I had with Boris, Badri and Mr. Abramovich, that Sibneft was owned 50% by Boris/Badri and 50% by Mr. Abramovich. I should say that there is simply no way that Boris (and so Badri) would not have had an interest in Sibneft. It was Boris’s brainchild and something of which he was very proud. 30 Mr. Abramovich was very much a partner to Boris and Badri in Sibneft …”

“… what was accurate was that Boris told me many numerous times, and Badri did, that “we”, meaning Boris and Badri, owned 50% of Sibneft, in so many words Voronoff Day 12, page 157. .”

“Q. Now, you tell us in paragraph 29 of your statement, over two pages, on page 81 D2/15/81, that your understanding was that Mr. Berezovsky and Mr. Patarkatsishvili owned 50 per cent of Sibneft. A. Yes. Q. Do you mean to indicate by that that you understood that at some point they directly owned 50 per cent of Sibneft, in the sense of either owning it themselves or through corporate entities that they owned? A. Neither really. You know, I didn’t really think of how exactly. I mean, I was pretty sure -- if I was questioned at that time, I would be pretty sure to say that not directly, but in actual fact, so de facto rather than de jure.”

“55 I have been convicted of murder and attempted murder in absentia in Russia, where I also face charges for embezzlement and tax evasion. I am not guilty of any of these offences. These criminal proceedings are politically motivated and form part of the Russian authorities’ manipulation of the Russian ‘justice’ system in relation to all those somehow related to Yukos and perceived to be a political threat. My trial in absentia was based on unsubstantiated hearsay and hearsay-on-hearsay statements made during the investigation of the case, including by witnesses who later testified that they had lied during the investigation based on pressure applied by Russian authorities. My convictions resulted from blatantly unfair proceedings and were arrived at without any respect for due process or the truth. On numerous occasions, the Russian authorities have requested my extradition from Israel in reliance on the charges against me. The Israeli Supreme Court has upheld the decision not to act on these extradition requests, specifically as to the fabricated murder and attempted murder charges, because the Russian case lacked the evidentiary foundation necessary to support extradition under Israeli law.”

“… with his own eyes the partnership agreement, the partnership documents signed between Abramovich and Berezovsky -- Patarkatsishvili, Abramovich and Berezovsky … they were Runicom papers, I think. Nevzlin Day 15, page 73. ”

“Mr. Khodorkovsky told Mr. Dubov and me that he saw papers that showed that Mr. Abramovich, Berezovsky Patarkatsishvili were 50% partners in Sibneft. Day 15, pages 73-75. ”

“B - few years ago several people owned several plants - willing to sell shares. At that point shareholders of Sibneft bought most of these plants. Shareholders of S - Bors/Bad/Roman/ We sold Sibneft so far no problems with deal.”

“We - at the time, in 2002 and 2002 beginning of 2003, we did a big fund together where Curtis was holding interest on my behalf. Mr. Curtis and I just finalised the big transaction done by Badri and Mr. Berezovsky regarding the sale of Sibneft, where Mr. Curtis was acting for the sheikh’s side but helping Mr. Berezovsky with his own affairs on the side of Mr. Berezovsky” ii) In relation to the provenance of the loan monies, Mr. Fomichev said as follows: “Q. While you were trustee of the Itchen Trust, you were also involved in assisting with the Sibneft transaction? A. Becoming a trustee in Itchen Trust was part of the Sibneft transaction, where I acted on behalf of Mr. Badri Patarkatsishvili mainly and Mr. Berezovsky as a beneficiary of this deal. That’s why Itchen Trust was organised, yes. Q. It was the Itchen Trust which held money which was the source of the loan made to Anstead. A. Yes, I know now. ... Q. You knew that the money came from Sibneft and you knew that the Sibneft money went into Itchen Trust? A. Yes. Q. So you knew that the money that was loaned to Anstead came out of the Itchen Trust, having derived from the Sibneft transaction? A. Yes.”

“How? Because all the business that Mr. Berezovsky was doing was based on this agreement. For example, I can give you an example on that. The agreement between Mr. Abramovich and Boris Berezovsky of 50 per cent interest in Sibneft was never documented or agreed on paper.”

“The money held by the Itchen Trust, some of which was appointed in favour of Mrs Berezovskaya and then lent to Anstead, derived from the sale of Mr. Berezovsky’s interest in Sibneft. The sale was effected, Mr. Berezovsky explained, by means of a structure proposed by Mr. Curtis, and in which Sheikh Sultan from Abu Dhabi was interposed between Mr. Berezovsky and Mr. Roman Abramovich. Mr. Fomichev confirmed in evidence that he knew that the money lent to Anstead came out of the Itchen Trust and was derived from the Sibneft transaction North Shore Ventures Limited v Anstead Holdings Inc [2010] 2 Lloyd’s Rep 265, at paragraph 54. .”

“Sibneft Shareholders 50/50 Roman 50 – BP/BB 50% Roman who brought idea – in while RA idea to make business – From beginning want to split 3 ways – RA know how to run the business. No human resources to manage company. Wanted RA to feel as partner”

“Initial sharing – Sibneft – 50/50. BB/BP and RA. RA [brought] idea to BB. Always 3 shares. BB suggested that RA have greater share as he knew how to manage business.”

“[Under the ‘loans for shares’ programme BB and partners loaned $100.3 million to the Government in December 1995 in return for the right to manage its 51% interest. On 12 May 1997 (when the loan as expected had not been repaid) a BB/BP/RA vehicle successfully bid $110 million (i.e. paying further $9.7 million) for the right to manage the shares – see Eurobond prospectus.] RA’s capital input was fairly small – I do not know exactly how much he contributed, to the best of my recollection it was at most a few million dollars, certainly less than $10 million. We provided the remainder of the capital from our own resources. We had to pledge assets, obtain bank credits etc. It was BB who raised the finance, negotiating around the world; we had to pledge everything, but I had a clear understanding that the project would prove to be profitable. [i.e. as long as Yeltsin was re-elected.]”

“Q. Mr. Abramovich, one observes thatyou do not here use the phrase ‘krysha’. Can you explain why not, please? A. The word ‘krysha’ is a very aggressive term and usually it was used with respect to criminal protection racket, but we also have the term ‘krysha’ in political terms. And at the very beginning I was not very clear as to how I should define this and I did not want to offend the claimant, but this is exactly what happened at the very beginning.”

“2. If the three parties reached an agreement of the kind as alleged by Mr. Berezovsky [the alleged 1995 Agreement]: (1) Was the 1995 Agreement, as alleged in paragraphs C34A and C34B of the Re-Re-Amended Particulars of Claim, a valid “joint activity” or “simple partnership” agreement, or a sui generis agreement, under Russian law, which conferred on Mr. Berezovsky and Mr. Patarkatsishvili (a) the right to demand from Mr. Abramovich a distribution of the acquired ownership interest in Sibneft in the agreed proportion; (b) rights of co-owners in respect of any property directly acquired by Mr. Abramovich as a result of the agreement; and/or (c) the right to demand distribution of profits resulting from the joint activity in the agreed proportion? (2) Alternatively, was the 1995 Agreement invalid or ineffective under Russian law as alleged in paragraph D34 of the Re-Amended Defence? In particular: (a) Did the agreement fail to contain all the essential terms for a simple partnership agreement, including in particular the parties’ (i) shares in the partnership, (ii) contributions to the partnership and (iii) goal of the partnership? (b) Was the agreement invalid or ineffective by reason of its having been made orally? (c) Was the agreement intended to have legal consequences, or to be binding ‘in honour only’? (d) Was any defect in the agreement cured by subsequent performance by the parties? (e) If and to the extent that any part of the 1995 Agreement was invalid or ineffective, did the balance of the agreement nevertheless constitute a valid and effective agreement? (f) If the agreement was invalid or ineffective as a partnership agreement, was it nevertheless valid and effective as a sui generis agreement under Russian law? (g) Did the agreement violate Article 434(2) of the 1964 Civil Code? (h) Were any shares in Sibneft or other interest in Sibneft common property of the partners under the agreement? (i) Would any claims that Mr. Berezovsky had arising out of the 1995 Agreement have become time-barred by May or June 2001, leaving him with no rights after that date? … 4. If the [alleged] 1996 Agreement was made, was it: (1) A valid agreement, under which Mr. Berezovsky and Mr. Patarkatsishvili acquired or retained valuable rights under Russian law; or (2) Invalid or ineffective under Russian law as alleged in paragraph D37.2 of the Re-Amended Defence? In particular: (a) Was the 1996 Agreement invalid or ineffective on the basis that it was an amendment or addition to the 1995 Agreement? (b) Were the nature and content of the 1996 Agreement such that (i) the parties cannot have intended it to be binding and/or (ii) it lacked sufficient certainty to be regarded under Russian law as a legally binding agreement (as opposed to, at most, one binding in honour only)? (c) Was the 1996 Agreement invalid or ineffective by reason of its having been made orally? (d) Was the 1996 Agreement void because it was an attempt to create a trust or other form of split ownership of shares? (e) Was the 1996 Agreement void as a contract of future gift which was not made in writing? (f) Would any claims that Mr. Berezovsky had arising out of the 1996 Agreement have become time-barred prior to May or June 2001, leaving him with no rights after that date?” (1) Was the 1995 Agreement, as alleged in paragraphs C34A and C34B of the Re-Re-Amended Particulars of Claim, a valid “joint activity” or “simple partnership” agreement, or a sui generis agreement, under Russian law, which conferred on Mr. Berezovsky and Mr. Patarkatsishvili (a) the right to demand from Mr. Abramovich a distribution of the acquired ownership interest in Sibneft in the agreed proportion; (b) rights of co-owners in respect of any property directly acquired by Mr. Abramovich as a result of the agreement; and/or (c) the right to demand distribution of profits resulting from the joint activity in the agreed proportion? (2) Alternatively, was the 1995 Agreement invalid or ineffective under Russian law as alleged in paragraph D34 of the Re-Amended Defence? In particular: (a) Did the agreement fail to contain all the essential terms for a simple partnership agreement, including in particular the parties’ (i) shares in the partnership, (ii) contributions to the partnership and (iii) goal of the partnership? (b) Was the agreement invalid or ineffective by reason of its having been made orally? (c) Was the agreement intended to have legal consequences, or to be binding ‘in honour only’? (d) Was any defect in the agreement cured by subsequent performance by the parties? (e) If and to the extent that any part of the 1995 Agreement was invalid or ineffective, did the balance of the agreement nevertheless constitute a valid and effective agreement? (f) If the agreement was invalid or ineffective as a partnership agreement, was it nevertheless valid and effective as a sui generis agreement under Russian law? (g) Did the agreement violate Article 434(2) of the 1964 Civil Code? (h) Were any shares in Sibneft or other interest in Sibneft common property of the partners under the agreement? (i) Would any claims that Mr. Berezovsky had arising out of the 1995 Agreement have become time-barred by May or June 2001, leaving him with no rights after that date? (i) Would any claims that Mr. Berezovsky had arising out of the 1995 Agreement have become time-barred by May or June 2001, leaving him with no rights after that date? (1) A valid agreement, under which Mr. Berezovsky and Mr. Patarkatsishvili acquired or retained valuable rights under Russian law; or (2) Invalid or ineffective under Russian law as alleged in paragraph D37.2 of the Re-Amended Defence? In particular: (a) Was the 1996 Agreement invalid or ineffective on the basis that it was an amendment or addition to the 1995 Agreement? (b) Were the nature and content of the 1996 Agreement such that (i) the parties cannot have intended it to be binding and/or (ii) it lacked sufficient certainty to be regarded under Russian law as a legally binding agreement (as opposed to, at most, one binding in honour only)? (c) Was the 1996 Agreement invalid or ineffective by reason of its having been made orally? (d) Was the 1996 Agreement void because it was an attempt to create a trust or other form of split ownership of shares? (e) Was the 1996 Agreement void as a contract of future gift which was not made in writing? (f) Would any claims that Mr. Berezovsky had arising out of the 1996 Agreement have become time-barred prior to May or June 2001, leaving him with no rights after that date?”

“If the evidence of several expert witnesses conflicts as to the effect of foreign sources, the Court is entitled, and indeed bound, to look at those sources in order itself to decide between the conflicting testimony.”

“… if the parties had agreed to jointly acquire a controlling share holding interest in Sibneft the fact that they did not agree that any of them were obliged to contribute money does not mean that any of them could acquire the shares for their own benefit.”

“The freedom of contract has also objective limits that are determined by the fundamentals of constitutional order and public policy. In particular, it concerns the inadmissibility of expansion of contractual relations and the principles underlying them on those areas of social activity that are related to the realisation of the governmental power. Since the governmental authorities and their officials ensure realisation by the people of its power, their activity (both of itself and its results) may not be subject to private civil law regulation, as well as the realisation of civil law rights and obligations may not predetermine specific decisions and actions of the governmental authorities and their officials.” [Emphasis supplied]

“Based on the above …, the Constitutional Court of the Russian Federation resolved as follows “1. To recognise that Articles 779.1 and 781.1 of the Civil Code of the Russian Federation as compliant with the Constitution since under the current legal system that regulates relations arising out of the provision of legal services they do not allow for awarding contractor claims for payment of compensation under commercial service agreements should such claims be made conditional upon a future decision by the court.”

“MR. SUMPTION: Now, let us assume that you have a contract with a politician, okay? The contract says – the politician is a personal friend of the president and of some of the president’s closest advisers, let’s just assume that, shall we? And assume that a contract is made with that politician under which he agrees to persuade the president and his advisers to issue decrees which will give him and his business associates an opportunity to make large sums of money out of state assets. Now, would you agree that that is a contract with a potential for corruption? A. I would agree with that. Q. Would you agree therefore that such a contract is likely to be directly contrary to the principle of public policy identified in Makeyev, by the majority? A. If the -- yes. I mean, if the characteristic features of the crime, corruption, are combined, yes, this is a crime.”

“In particular, what is meant here is that it would be inadmissible to expand contractual relations to apply to the areas of public life that are governed by the power of the state. In this case, using this public law argument the Constitutional Court of the Russian Federation means all civil agreements in their entirety rather than just for-profit agreements for legal services.”

“… beyond the specific context of legal services contracts (concerning litigation before judges) to lobbying contracts (concerning the lobbying of state officials) would be a matter of debate”

“At the same time a contractor’s claim for payment of remuneration should not be allowed if the claimant bases said claim on a contract term making the payment amount for services dependent on a judgment by a court or governmental body which is to be arrived at in future.” [Emphasis supplied].

“… in view of the trust relationship, a written agreement was not drawn up; there was only a verbal understanding of the terms of the transaction (size and type of contribution, construction procedure, and management of the hotel complex)”

“I cannot comment on the legal status of any particular oral agreement made in the 1990s, or of oral agreements under Russian law generally, which are not within my area of expertise. However, my reading about these types of oral arrangements, including the statements of Russian businessmen about these agreements such as the statement of Mr. Potanin set out above, indicates that the parties to such agreements (rightly or wrongly) considered them to be binding. Such oral agreements inevitably involved a high level of trust, because of the difficulties of enforcement of such oral arrangements. However, because of the lack of effective legal protection, the same was true in Russia at the time in relation to written contracts and recorded share ownership, and not just oral agreements.”

“In my opinion, while there were inconsistent laws, incomplete laws, missing laws, and (in the very early 1990s) regulations sometimes only available to bureaucrats, all of which led to uncertainty, it is most assuredly not the case that such uncertainty meant transactions were not documented. On the contrary this meant that, if the parties intended to rely on their agreements or to be able to enforce them, deals were carefully and conservatively documented. As I will set out below, the uncertain state of Russian law often meant (among other reasons) that transactions were structured so as to involve foreign components or structures, but businessmen in Russia in the 1990s were sufficiently sophisticated to understand the need to record clearly the terms of their agreements, to the extent that the arrangements they came to were intended to be legally binding and enforceable. Indeed, during my years of legal practice in Russia I was never asked if an informal oral arrangement was enforceable in court and was never asked to document such an informal oral agreement that had been previously made.” [Emphasis in original]

“… never lived in a country where there is so much pressure on one to get documentation for the contingency that an undesirable contingency, an undesirable occurrence might arise from an agreement or an incident that one is involved in Day 38, page 45; see also his observation at Day 38, pages 44 and 48, about the implausibility of transactions involving large sums of money being done through an unrecorded oral agreement. .”

“Q. Would you agree that the subsequent conduct has got to be unambiguous? It’s got to be conduct which points to a particular term having been agreed and nothing else? A. Yes, the subsequent conduct must identify the essential term which was not agreed upon initially.”

“(1) First, as noted, it is common ground that, at the time when the 1996 Agreement is said to have been made, silent partnerships were expressly permitted and recognised in Article 1054 of the Civil Code. Thus, the Code contemplates that the registered owner of Russian land or property may owe personal obligations to a silent partner. (2) Second, for reasons which have already been explained, it is submitted that the prohibition on split ownership does not in fact prohibit contracts to allocate the benefit of ownership, which create personal contractual rights rather than in rem rights. The rule against split ownership does not prohibit those personal contractual rights. (3) Third … [ not relevant for present purposes] (4) Fourth, and in any event, it is common ground that Mr. Abramovich never in fact owned Russian shares in Sibneft. What he owned were beneficial entitlements under a Liechtenstein and then a Cypriot trust, to which he (or his, if not partner, then minion, Mr. Shvidler) had the power to add Mr. Berezovsky as beneficiary. (5) Mr. Sumption contemplated [in cross-examination of Dr. Rachkov] during the trial that there could be a trust of foreign property without infringing the prohibition on split ownership: ‘Q. I quite understand your point, that it’s perfectly possible in Russian law to have a trust of a non-Russian asset, a share in a BVI company, for example.’ (6) Dr. Rachkov was in fact making a different point at the time, and he did not comment on Mr. Sumption’s suggestion. The suggestion is, however, instructive: the fact is that what Mr. Abramovich acquired by reason of the joint activity, and what is therefore common property in accordance with the default rule, are beneficial entitlements under Liechtenstein and then Cypriot trusts.”

“As between the parties, however, the contractual rights that Mr. Berezovsky would have against Mr. Abramovich would be effectively equivalent to property rights Rachkov 4th witness statement paragraph 265. .”

“Did Mr. Berezovsky and Mr. Patarkatsishvili agree to sell their interests in ORT to Mr. Abramovich following threats communicated by Mr. Abramovich and delivered by him on behalf of the Russian State authorities? (1) Were any of Mr. Abramovich’s statements in the course of the meeting between himself, Mr. Berezovsky and Mr. Patarkatsishvili at Le Bourget airport in France on 6 December 2000 of an intimidatory nature? (2) Was there a meeting between Mr. Berezovsky, Mr. Patarkatsishvili and Mr. Abramovich in Cap d’Antibes in December 2000 at which Mr. Abramovich communicated any such threats?”

“C26. By the end of 2000, Mr. Berezovsky, Mr. Patarkatsishvili and Mr. Abramovich had significant business interests together (as further described below). Mr. Berezovsky and Mr. Patarkatsishvili knew that Mr. Abramovich was close to President Putin and part of his regime. C27. Soon after Mr. Glushkov’s arrest, in December 2000, Mr. Abramovich met Mr. Berezovsky and Mr. Patarkatsishvili at Mr. Berezovsky’s home in Cap d’Antibes, France. At this meeting, Mr. Abramovich told Mr. Berezovsky and Mr. Patarkatsishvili that: (1) he had come on the orders of President Putin and Mr. Voloshin; (2) Mr. Berezovsky and Mr. Patarkatsishvili had to sell their interests in ORT immediately (those interests being held through their joint 100% shareholding in ORT-KB and their holding in Logovaz); (3) if Mr. Berezovsky and Mr. Patarkatsishvili sold their interests in ORT, Mr. Glushkov would be released from prison; (4) if Mr. Berezovsky and Mr. Patarkatsishvili refused to sell their interests in ORT, (a) Mr. Glushkov would remain in prison for a very long time, and (b) President Putin would seize their ORT interests; and (5) the price Mr. Berezovsky and Mr. Patarkatsishvili would be paid for their interests in ORT was $175 million. C28. In the absence of Mr. Berezovsky from Russia, the Russian state could not detain him as it had detained Mr. Gusinsky. Instead, operating through Mr. Abramovich and otherwise in the manner pleaded above, it used the detention of Mr. Glushkov and the other threats referred to above to exert pressure on Mr. Berezovsky to sell his interest in ORT. C29. As a result, Mr. Berezovsky and Mr. Patarkatsishvili had no option but to accept the significantly reduced sum of $175 million for ORT. C30. Despite Mr. Berezovsky’s and Mr. Patarkatsishvili’s surrender of ORT, Mr. Glushkov was not released. C31. The ORT transaction presaged the modus operandi for the Sibneft transaction.” (1) he had come on the orders of President Putin and Mr. Voloshin; (2) Mr. Berezovsky and Mr. Patarkatsishvili had to sell their interests in ORT immediately (those interests being held through their joint 100% shareholding in ORT-KB and their holding in Logovaz); (3) if Mr. Berezovsky and Mr. Patarkatsishvili sold their interests in ORT, Mr. Glushkov would be released from prison; (4) if Mr. Berezovsky and Mr. Patarkatsishvili refused to sell their interests in ORT, (a) Mr. Glushkov would remain in prison for a very long time, and (b) President Putin would seize their ORT interests; and (5) the price Mr. Berezovsky and Mr. Patarkatsishvili would be paid for their interests in ORT was $175 million. C31. The ORT transaction presaged the modus operandi for the Sibneft transaction.”

“[o]n this basis, and this basis alone, I agreed to sell my interest in ORT”

“Mr. Berezovsky says (Berezovsky 4, paragraph 241) that his own relations with the Yeltsin regime became weaker in the period from 1998-2000 and that he only discussed important political matters and met people including me when he wished to communicate his views to President Yeltsin. Since I was working in the Presidential Administration at that time I can agree with Mr. Berezovsky and confirm that his influence was not so great at that time. What Mr. Berezovsky did have was the ability to achieve indirect influence through his contacts with those around Mr. Yeltsin, but it is true that this ability had also diminished somewhat by 2000.”

“They are liars. The television people who have been destroying the state for 10 years. They have been thieving money and buying up absolutely everything .... Now they’re trying to discredit the country so that the army gets even worse.”

“World News: Putin hits at media ‘Oligarchs’ over Kursk Tragedy President Vladimir Putin of Russia yesterday lashed out at individuals he claimed had attempted to make political capital out of the Kursk submarine tragedy, in a thinly veiled attack on some of the country’s influential business ‘oligarchs’. On a day of national mourning for the 188 crew members of the Kursk, which sank in the Barents Sea, Mr. Putin said he had ‘a great feeling of responsibility and guilt’ for the tragedy. But, in a clear attempt to deflect strong criticism of his handling of the crisis, he rounded on the oligarchs who control much of the media that led the criticism of him. His attack may herald the start of a new round in the fight between the administration and the small group of men who became so rich and powerful during the 1990s under former President Boris Yeltsin. In remarks broadcast on the state-controlled RTR channel last night, Mr. Putin said that the first to defend the Kursk’s crew and their families over the last few days were the same who had ‘long promoted the destruction of the army, the fleet and the state’. He singled out ‘some who have even given a million dollars’ to the crews’ [sic] families, in an apparent reference to Boris Berezovsky, the former ‘grey cardinal’ of the Kremlin who controls the daily newspaper Kommersant, which organised a campaign of voluntary donations to help the grieving families. He said: ‘They would have done better to sell their villas on the Mediterranean coast of France and in Spain. ‘Only then could they explain why the property was registered under false names and behind legal firms’. ‘And we would probably ask the question - where did the money come from?’ Mr. Berezovsky owns a villa on the Cote d’Azur in southern France, while the media magnate Vladimir Gusinsky and fellow controlling shareholders in the NTV television station have property in Spain.”

“11. I am aware that Mr. Abramovich, in his role as both Governor of Chukotka and as one of Russia’s most successful businessman, had a number of meetings with Mr. Putin during the period when I was Head of Russia’s Presidential Executive Office. I would say that Mr. Putin had, and has, a good relationship with Mr. Abramovich - my impression, from seeing them together and hearing him speak of Mr. Abramovich, is that Mr. Putin views Mr. Abramovich as a good businessman and a pleasant, honest individual. I recall that President Putin was particularly pleased with what Mr. Abramovich achieved in Chukotka. 12. Nevertheless, despite the good relationship between Mr. Abramovich and Mr. Putin, I would not describe Mr. Abramovich as ever having been part of Mr. Putin’s ‘inner circle’; unlike, some might say, myself who worked closely with Mr. Putin for a number of years.”

“13. The background was that Mr. Berezovsky controlled the day-to-day management of ORT and Mr. Berezovsky’s close colleague, Mr. Patarkatsishvili, had de facto control of all of the financial activity of ORT. The Government was the majority shareholder in ORT (holding a 51% stake) while the stake owned by Mr. Berezovsky and his partners legally did not enable him to have control over ORT, however he effectively controlled ORT’s activities.” 14. Mr. Berezovsky was using ORT for his own personal benefit on an almost daily basis, to further both his political and business interests and also, sometimes, those of his friends and associates. He played a very active role in managing the content of ORT programmes, often, I was informed, calling a number of times daily not only the general director Mr. Konstantin Ernst and other managers at the station, but even presenters and journalists. Mr. Berezovsky would, apparently, request that ORT’s management show certain programmes, or alternatively suppress certain reports. Besides, as far as I am aware, the proceeds from advertising sales were channelled through companies controlled by Mr. Berezovsky, with only a fraction thereof reaching ORT. By that time it had become obvious that Mr. Berezovsky was increasingly using the channel as an instrument of his political influence.”

“… it became clear that the informal governance of ORT on the part of Berezovsky was something that needed to be put an end to Day 25, page 29. .”

“15. I recall explaining to Mr. Berezovsky that the Government wanted him to stop using ORT for his own political and financial benefit. I asked Mr. Berezovsky to stop influencing ORT’s top-level management for that purpose. 16. I would say that our discussion was a difficult and rather emotional one. Mr. Berezovsky was obviously disappointed and used a lot of ‘strong words’ to express his clear anger at what I was saying.”

“I announce to Mr. Berezovsky … that for him in the future not to give instructions to ORT Management with regard to the content of TV programmes, and for the ORT managers to be given the appropriate information from us so that they should not follow Mr. Berezovsky’s instructions with regard to the content. That was my objective, ….”

“No shares were discussed at that meeting, there wasn’t any point in that. The objective of our meeting was to inform Mr. Berezovsky that the concert is over, the show is over, and he won’t be able to impact the journalists, and he should not do that, and the journalists have the right to be free from his influence”

“By clause 11 the General Meeting of Shareholders had exclusive competence in a range of fields including: determining the size and make up of the Board of Directors, and the early termination of their authority (clause 11.2.4); and election of the General Director, and early termination of his authority, on proposal made by the President of the Russian Federation (clause 11.2.8). A decision under clause 11.2.4 (appointing or dismissing directors) required a 2/3 majority of those attending a General Meeting of Shareholders: clause 11.23. A decision to amend the ORT Charter required a 3/4 majority of those attending: clause 11.23.”

“Mr. Berezovsky said that he had been told by Voloshin that Putin wanted him to surrender control of ORT because ‘the President wants to run the station himself’. Mr. Berezovsky at that time had 49% of ORT, with 51% held by the government. He had an effective veto on top management appointments, which required a 70% majority. Mr. Voloshin told Mr. Berezovsky that he would have to change the management and that, if not, Mr. Berezovsky would go the same way as Gusinsky.”

“313 I have a very vivid recollection of this meeting. Mr. Voloshin was waiting for me in his office. President Putin then arrived around ten minutes later. I told President Putin that I believed ORT’s coverage of the Kursk disaster was entirely proper and that the openness of the coverage actually helped him because it demonstrated that he was not seeking to censor the media. 314 President Putin listened to what I had to say. After I had finished, he produced a file. He then read from it. I do not recall his exact words, but the gist of what he said was that both ORT and I were corrupt. He also accused me of hiring prostitutes to pose as the widows and sisters of sailors killed aboard the Kursk to attack him verbally. These allegations were completely untrue and I told President Putin this. 315 He too demanded that I surrender my shares in ORT to the state or to an entity acceptable to the government and indicated that he wished to manage ORT personally. 316 I asked President Putin whether sending me the way of ‘Goose’ (this was Mr. Gusinsky’s nickname: ‘Gus’ is the Russian for goose) was his idea or Mr. Voloshin’s. President Putin confirmed that Mr. Voloshin had correctly passed his (President Putin’s) message to me the previous day, namely that I would be imprisoned if I did not agree to surrender or direct the surrender of my shares in ORT. 317 I was shocked and disappointed by what President Putin said to me. I accused him of wanting to control all mass media in Russia himself. President Putin then said ‘Goodbye, Boris Abramovich’, which ended the conversation. I was disappointed by this because he never addressed me using my patronymic (Abramovich), which is a sign of formality. I said ‘Goodbye Volodya’, which is the informal version of Vladimir. President Putin then left the room.”

“21. President Putin said that he wanted Mr. Berezovsky to stop his involvement in ORT’s affairs and step away from managing the channel. In future he wanted to have the channel effectively managed by the Board of Directors and its management. President Putin said that in practical terms, this meant that Mr. Patarkatsishvili should resign from his position as Deputy Manager and that Mr. Berezovsky should cease giving instructions to ORT’s management. Besides this, Mr. Berezovsky should also relinquish his control of ORT’s financial flows. 22. The discussion was very emotional. However,·I do not remember that I or President Putin threatened Mr. Berezovsky in any way - I cannot recall either of us saying to Mr. Berezovsky that we would do something to him if he did not comply with our request. I do not remember the Kursk incident being discussed during this meeting. Nor can I recall Mr. Gusinsky being mentioned. The meeting was very short-it lasted only 5-10 minutes. There was no discussion about shares. … 24. Soon after the meeting, Mr. Ernst became the real manager of the channel, freed from the influence of Mr. Berezovsky. The channel started to receive all its advertising revenues and its financial situation improved substantially.”

“Last week, a senior official of your administration gave me an ultimatum: surrender my shares in the ORT TV network to the government within two weeks, or ‘follow Gusinsky’ – apparently to Butyrskaya prison. The reason for this was your displeasure with ORT’s coverage of the Kursk submarine disaster. ‘The president himself wants to manage ORT’, your representative said to me.”

“Asked about the transaction at a news conference during the UN Millennium Summit on Thursday [7 September], Putin voiced doubt about the degree of the new trustees’ independence. ‘If these people are controlled by Mr. Berezovsky and depend on him, then the move makes no sense,’ Putin said.”

“G DISPUTE WITH THE KREMLIN 43. By the middle of 2000 ORT had begun to criticise aspects of Putin’s leadership and policies. Boris told Putin of his concerns in private, but when Putin did not change his ways Boris said that he would start to be more open. He duly published letters to Putin in the press, and eventually resigned his Duma seat in protest. 44. Our problems worsened with the Kursk submarine tragedy [12 August 2000]. At this point in time Boris still had direct access to President Putin and spoke with him regularly. They still enjoyed a special relationship – Boris was normally able to speak to the President at one hour’s notice. Boris tried to reach Putin, who was on vacation at the Baltic sea resort Sochi when the Kursk sank. It appeared at that time that the crew members could be saved. However, Putin did not cut short his holiday. The crew died because of the failure of the government to organise a rescue attempt. 45. Putin was upset with ORT’s coverage as he did not think it was loyal to him. At the time the main TV tower in Ostankino burned down [Sunday, 27 August 2000] I was telephoned by Patrushev, the head of the FSB, and asked by him to come to his office. I remember mentioning the TV tower being on fire and being told that the call was connected with the fire. … 49. Putin asked me what kind of ‘strange game’ Boris was playing and asked me to use my influence to change Boris’s position. He mentioned ORT, and said that he would like us to ‘clear out’. I was surprised by what he said, and asked him if I had understood him correctly – did he want us to give up our shares and pass them to somebody? 50. He confirmed that this was what he wanted. He said that no-one had the right to take risks with television, and while he didn’t care what other businesses we went into, he wanted us to give away the shares of ORT. However, he said we could sell to him, and that he would pay. 51. I then asked him with whom we could negotiate commercially. He put forward Mikhail Lesin, Minister for Press, Television, Radio Broadcasting and Media Communication, who had previously signed the infamous appendix 6 to the agreement under which Gusinsky (while in custody in Moscow) surrendered his interests in NTV in return for immunity from prosecution. 52. The meeting concluded by me apologising for my improper dress. I also mentioned that I had thought I was going to be arrested. I distinctly remember that Putin tapped me on the shoulder and said: ‘We are friends, do any other business and I will support you, but if you stay in TV, you will be my enemy. 53. I subsequently met with Lesin and began negotiations. We agreed a price for our shares in ORT of $300 million. I was told by Lesin that this was the maximum amount he had at his disposal as the money for Gusinsky’s NTV had also had to come out of his budget. I wanted to sell at this price but Boris was adamant that we should not.”

“Generally, I don’t think that the State and the oligarchs are irreconcilable enemies. Rather, I think that the State is holding a big club [cudgel] in its hands, which it will use only once. To deliver a crushing blow on the head. We haven’t yet resorted to that club. We just picked it up – and that was enough to attract public attention. But if we get really angry, we will not hesitate to use it; we don’t want our State to be blackmailed. If need be, we will destroy any instruments of blackmail, whatever they are.”

“Putin was responding to a question about criticism of him by Boris Berezovsky, a business magnate with substantial media interests who quit Parliament in July after accusing Putin of trying to turn Russia into a Latin American-style regime.”

“I had two reasons. Number one, I was associated closely with Mr. Berezovsky, I was like a shadow of Mr. Berezovsky, so if at some point he wouldn’t calm down and if he didn’t stop using ORT in his fight with the government, I would suffer personally and most importantly Sibneft as a company would not be stable He also said “Everybody knew that I financed him, everyone knows that he was my krysha”: Day 24, page 61. . Secondly, Badri understood that very well: he understood that sooner or later this would come to a sorry end. Badri understood that and he was persuading me, talking me into acquiring the shares; then Boris would calm down and then we’ll see what should be done with it. Initially, from the very first discussions, we discussed that I would acquire these shares, I would hold them for a while; and later, when it all settles down, he’ll take them back. However, this option was forgotten very soon.”

“… whilst the initial purpose of the meeting was to discuss mutual business, it quickly became apparent that the main purpose for Mr. Abramovich was to put pressure on Badri and me to agree to the sale of ORT”

“Fine ... nnn ... let’s now deal with ORT. Well, Roma, we are absolutely ready (on all) the parameters, including the ... nnn ... yes. We had a problem with Borya, and we sorted that out too. (He) is in England, he is ready, we disclosed the documents, and we are ready to sort it all out officially. How shall we proceed.” ii) Mr. Abramovich’s response (Box 235) was: “We also have everything ready, as always and like everybody”

“No, in fact, when we made our agreement, when we made our agreement in Moscow, yes, you said the following: that as you are taking it all on your account, I mean, you are the one paying for it, right, so you will not have any problem with transfers, because the payment transfer will originate from the West. Then we got this scheme ....” ii) There was then a long discussion, in the course of which Mr. Abramovich and Mr. Patarkatsishvili both spoke to Mr. Gorodilov on the telephone, about how the proceeds might be remitted to England in a manner which was tax-efficient and consistent with Russian exchange controls and British money-laundering regulations. The conversation between Mr. Patarkatsishvili and Mr. Gorodilov concluded with Mr. Patarkatsishvili saying (Box 402): “Therefore we don’t care where the money comes to London from. You see, don’t you? In this case, talk to Roman. He (will give you his agreement) to this (deal).” iii) Mr. Abramovich then said, “well, let’s yes, lets agree” (Box 403), and Mr. Patarkatsishvili responds (still over the phone) (Box 404): “… and we are ready, we are ready to carry it out” iv) Later, while Mr. Abramovich was talking on the phone to Mr. Gorodilov, Mr. Patarkatsishvili had a private conversation with Mr. Berezovsky. Mr. Patarkatsishvili said to Mr. Berezovsky (Box 408): “Borya, well, we need to finish this off, don’t you think? So a decision must be taken, one way or another, right? I am absolutely fine with what I am being offered...”

“The document we shall organise today, no problem.” vi) A little while later, after some discussions about other unrelated sums that Mr. Patarkatsishvili wanted Mr. Abramovich to pay, Mr. Abramovich had the following exchange with Mr. Patarkatsishvili (Box 428-431): “A: We could now close this deal as it is, and later – I promise – we shall always find understanding on this matter P: Sure, sure… A: (So then) we shall finalise this deal, so that I could report on it without further ado, (that) the deal is done…nnn.. P: No problem… A: So that he can finish the … election campaign in peace.”

“P: Right, it’s settled then, no problems. No problems. De facto we don’t lose anything because we are compensating the amount we stand to lose now so that later ... And as for what we’d lost already - well, it’s gone. In a word, it’s like this there... Rom, so we ….”

“I felt at the time of this meeting that Mr. Abramovich was Mr. Putin’s messenger and had been sent to obtain our signatures to the sale of ORT. The Maski-Show raid the day before our meeting with Mr. Abramovich was intended to be a warning to us. When Mr. Abramovich returned to Russia without our signatures, Mr. Putin realised that he need to increase the pressure to make us sell. Consequently, the following day, 7 December, Mr. Glushkov was arrested.”

“… after Glushkov was arrested, later on, I didn’t have any doubt that Abramovich played game together with Putin and the Prosecutor Office and so, no doubt at all. This one of my key -- turn point.”

“… far more likely that the meeting at Cap d’Antibes took place on or in the few days after Mr. Glushkov’s arrest on 7 December 2000”

“… I still have a little bit of doubts about the 8th. And it means that my recollection almost - not 100% first of all, but almost 100%, that has happened on the 7th.”

“358. I gave a telephone interview to the Ekho Moskvy radio station on the day of Nikolay’s arrest and expressed my view that President Putin was trying to get at me via those closest to me. However, I announced immediately that I would be giving President Putin what he wanted, namely ORT. In an interview on 7 December 2000 with NTV (which was reported in Russian newspapers), I announced that I was abandoning my plan to transfer ORT into a trust. I explained that I was doing this because the trust would have been placed under incredible pressure by the Kremlin. This was correct, but I also understood that I would have to give up ORT to the State so as to secure Nikolay’s release.”

“359. A couple of weeks after Nikolay’s arrest, towards the end of December 2000 and a day or two before Christmas, Mr. Abramovich came to my house in Cap d’Antibes, where I was then living, and met with Badri and me. The meeting was arranged through Badri. My partner, Elena Gorbunova, was also present for the beginning of the meeting. 360 At this meeting, Mr. Abramovich said from the very beginning that he was acting as a messenger in agreeing the terms for the State getting control of ORT. He did not even try to pretend that there was any other agenda. Mr. Abramovich told Badri and me that he had come at the specific request of President Putin and Mr. Voloshin and that Badri and I had to sell our interests in ORT to him immediately. 361. Mr. Abramovich told us that if we did not sell our ORT shares at the price he specified, then Nikolay would be in jail for a very long time. Mr. Abramovich knew well that Nikolay was very sick and in need of constant medical treatment. He added that if Badri and I did not sell the shares, President Putin would seize them in any event and so we might as well sell them. Mr. Abramovich assured me that if I agreed to sell, Nikolay would be released from prison. It was clear to me that we were being threatened. On this basis, and this basis alone, I agreed to sell my interest in ORT.”

“… despite all the talk, all the speculation that I sold the shares, or 49% of the shares today belong to me and my partner [Mr. Patarkatsishvili] and in this situation I believe it makes absolutely no sense to struggle against such risks-not risk me personally, but to my friends and family. Therefore I will decide within the next two days what to do with the share is. Presenter: do you believe at all that you will be able to hold on to them? No, I simply do not believe that at all. I think the state will get what it wants.” [Emphasis supplied.]

“A. Mr. Sumption, I present my position in Ekho Moskvy like it is. Definitely I already took my decision to sell ORT shares because they put me in the corner, but I said that I need two days more to take a final decision. It means that I present my position. My understanding that I am in the corner, I was really shocked, and I present my position. But I took the final decision, as it’s correctly I gave in my interview, only after we agreed that Mr. Glushkov will be released because I will sell my shares in ORT.”

“Q. Yes. Well now, if you decided straight after hearing about Mr. Glushkov’s arrest that you were going to have to sell out of ORT, unless Mr. Abramovich was already there in Cap d’Antibes when the news came through, you couldn’t have been influenced by anything that he said to you, could you? A. No. The point is that, as you remember, our discussion with Mr. Abramovich in Cap d’Antibes is the condition to give up is Mr. Glushkov release. And this is a key point because after that I told that I am not interested more in money at all; I am interested in just the condition should be Glushkov should be released. Q. Mr. Berezovsky, I don’t think you’re really grappling with the point I’m putting to you. Your case is that you would never have sold out of ORT if it hadn’t been for what Mr. Abramovich said to you on this visit to Cap d’Antibes. That’s your case, isn’t it? A. My case is absolutely clear: that I would not sell ORT if Glushkov would not be arrested and I would not sell -- I wouldn’t sell ORT if Glushkov would not be , and this is the point which I discussed with Mr. Abramovich in Cap d’Antibes. As I told you just now, I don’t remember, happened on the 7th, and it means that I decree -- that I decree my position, present my position, when already Abramovich visited me or it’s happened later, one day later. Q. Mr. Berezovsky, is it your case or is it not that it was Mr. Abramovich’s threats that caused you to decide to sell out of ORT? A. Definitely, but threat already have done by Putin himself, putting Mr. Glushkov in jail. Q. Now, the point I’m putting to you is very simple – A. Abramovich was just messenger of that. Q. If you decided to sell out of ORT as soon as you heard the news from Mr. Glushkov’s lawyer that he’d been arrested, unless Mr. Abramovich was already at Cap d’Antibes, he couldn’t possibly have influenced your decision? A. Definitely he could not influence to my decision but I still have in mind my clear understanding that the condition finally will be if Nikolai Glushkov will be released. I was very emotional, as you understand, that day and I don’t remember exactly what happened. But the point is absolutely clear: that condition was to release Glushkov, in spite of I said I don’t have choice, but I have arguments to make happen that Glushkov will be released because I had hope that if he will not be released, I will not accept that”

“Q. Now, my question is this, Mr. Berezovsky: you came to that conclusion without needing to have any conversation with Mr. Abramovich? A. Definitely. On the one hand conclusion was without any conversation with Abramovich. On the other hand, I want to understand condition and I want to send clear message that I don’t worry more about money, I worry just about releasing of Nikolai Glushkov. And as far as Abramovich already took mission to be messenger between Putin and me, he is absolutely correct person to present my position to Mr. Putin”

“Q. Now, if these two events happened on the very same day, I suggest that you would always have remembered it and you wouldn’t have had to shift about choosing one date after another. A. I was waiting this your question. It’s good question. And I tell you I recollect definitely the arrest of Glushkov; I recollect definitely the meeting with Abramovich in Cap d’Antibes. I did not recollect that it’s happened in the same day and I think, again, because it’s so emotional, was Nikolai Glushkov arrest, that I did not coincide those two events, I did not put those two events in one day. It was too much for one day. It’s the reason why initially I didn’t remember that it could happen at the 7th.” [Emphasis supplied.]

“(ix) The Cap d’Antibes meeting 37 I understand that Roman now denies that he met with Boris and Badri between 6 December 2000 and Christmas that year. 38 I am sure that Roman is wrong about this. Although I do not remember the precise date of the meeting, I can picture it very clearly. The meeting took place before 24 December 2000. I am sure of this because at the time, our Christmas tree had not yet gone up; although I am a Russian Orthodox Christian, and so we celebrate Christmas in January, we put up a Christmas tree in the Chateau de La Garoupe in December in accordance with the French (Catholic) tradition for the staff and other visitors. 39 I remember seeing Roman arrived in the entrance hall of the Chateau, after lunchtime. After Roman arrived, Boris, Badri and I went out with Roman onto the terrace. We would often sit outside at the Chateau, and even during the winter months we kept the terrace doors open. I wanted to go indoors as soon as I had gone out onto the terrace, and was on my way inside, when Boris asked me to stay out. I sat on one corner of the terrace, by the dining table, and the three men sat on the other corner, where there are some chairs. I went inside after around 10 to 15 minutes, as it was cold. I do not know whether the men also went inside later, or whether they remained outside for the rest of the meeting. 40 I had of course come to know Roman very well by this time. From what I observed, Roman behaved very differently at this meeting from how I had seen him behave previously. He used to be respectful towards Boris, almost humble. However, on this visit Roman seemed to be looking down on Boris, as though he now had all the power in the relationship. My impression was that Roman was trying to demonstrate that he was doing Boris a huge favour. I heard the men talking about Boris and Badri’s interests in ORT. I recall Roman saying that the government wanted to pay significantly less for the ORT shares than he was going to pay, and that it was only thanks to Roman that they would pay more. I think Roman also said that he was personally paying some of the sale price as he was fed up with the story with Boris and Badri. 41 I remember that after the meeting, Boris was outraged. He told me that Roman had used Nikolay to blackmail Boris and Badri to give up their interests in ORT, and that he was particularly upset that Nikolay had been used. I remember Boris saying that Roman was a bastard.”

“As time passed it was clear that we would not be going back to Moscow. Many agreements were breached by the government. We did not trust them anymore. We needed a trusted man. We received an invitation from RA to meet. A meeting took place in Paris between myself, BB and RA. The meeting in Paris took place at the Le Fouquet restaurant in the Champs Elysees. I even recall where we sat: the third table from the left. RA: ‘For your sake, I will buy your shares and give them to the government.’ He offered $150 million. Previously we had had an agreement with RA to give $50 million to the election campaign of Putin. Our share was therefore $25 million to this cause, which RA paid. Taking into account this $25 million, the price offered for ORT was $175 million. Prior to the Paris meeting with RA, BB and I had decided that we were prepared to give away our shares for nothing in exchange for the release of NG. His freedom was our overriding concern. We therefore did not hesitate when RA offered to pay $150 million on the basis that NG would be released. Evidently it was not within RA’s power to release NG. Voloshin himself had promised this to me in a personal conversation I had with him later. Although I believed them, BB on the other hand took some persuading as he was concerned that he would be deceived. The release of NG would be arranged through Voloshin. The basis of the agreement was that RA would buy our shares and give them to the government, and in turn NG would be released on the grounds of his ill health. The price for our ORT shares had come down from $300 million to $150 million. This was consistent with the practice of the Kremlin. It was usual for the Kremlin to discount an offer by 300%, if its first offer was refused. We were treated preferentially as our discount was only 50%!”

‘For your sake, I will buy your shares and give them to the government.’

“It was made clear to me by Russian authorities that Glushkov would be released in exchange for my stake in ORT. Indeed, I was promised this – by none other than Voloshin”; “… this tactic has already been used against [me] by none other than Voloshin, who personally told me that my good friend Glushkov would be released if I surrendered my ORT shares.”

“GEVORKIAN. You mentioned attempts to pressure Berezovsky. What could the actual motif behind it be? PATARKATSISHVILI. Boris Abramovich and I underwent all sorts of pressure, before and after Glushkov’s arrest. They tried to bargain the Aeroflot case closure for the shares of ORT television. We agreed to it when Glushkov was arrested. We sold our shares. Alexander Voloshin promised that Glushkov would be released, but he cheated us. GEVORKIAN. Whom did he give that promise to? PATARKATSISHVILI. To me. GEVORKIAN. In person or by phone? PATARKATSISHVILI. He related it to me through a person whom both Voloshin and I found trustworthy.”

“le Bourget airport/Sibneft Roman last time met in chateau airport in Germany” and a side note on the previous page, which, next to a reference about the Paris meeting, read: “Badri, BB, RA. Before Chateau in BB house After Nikolai in prison – 7 December – 25 December”; Mr. Rabinowitz also relied on passages in Ms. Duncan’s note of meetings with Mr. Patarkatsishvili on 29-30 November 2007, which read: “BB Glushkov arrested Dec. 17/12 RA came to France – arranged by Badri Said sell shares in ORT Said he came on order of Voloshin & Putin –said if we don’t sell, Putin would take anyway I raised issue of Nikolai, he in jail. He said if we settle deal Glushkov released Badri settled how much AP BP 1st meeting in France BP called him and arranged meeting We understood we need to meet – both sides. Thought he wld raise Sibneft but he didn’t .... Antibes House – RA gave us info from Voloshin & Putin. If you guys don’t give them the sh’s NG in jail a long time. RA said NG v sick, I’m sorry about this - we decided to give shares. Talked about price – agreed RA said. … 2 meetings with RA – Fouquet + Antibes – threat made Fouquet – also meeting abt ORT, NG Fouquet – BP at George V – met at Fouquet v. beautiful day. Spring or summer. Antibes – v. short time after NG arrested (17/12)”

“In view of our previous friendship and trusted business relationship, I felt hurt and betrayed by Mr. Abramovich. I was sure he had lied to me when he had told me at Le Bourget that he did not expect Nikolay to be arrested, and it was clear to me that in acting as President Putin’s messenger in the ORT intimidation he was acting for his own benefit – strengthening his own position in the Kremlin, while hurting me, his partner, and at the same time making money out of it. Over the years, a number of people close to me had warned me not to trust Mr. Abramovich – Badri, Nikolay, Dr. Nosova, my partner Elena, George Soros (through Alex Goldfarb) – but I had paid no attention to them. I saw now that I had been wrong to trust Mr. Abramovich. At the conclusion of the meeting, I made it clear to him that I knew he was blackmailing me, and that he had betrayed me. I told him ‘It’s the last time that I will meet you Roma, I never want to see you again’. The next time I spoke to him was seven years later, when I personally served these proceedings on him at an Hermes shop in London (and he sought to avoid the service of proceedings)”

“202. By way of background, I should explain that my relationship with Mr. Berezovsky changed after the Kursk tragedy of August 2000. In my view, he took an overtly hostile and one-sided stance against the country’s leadership as a means of promoting himself. I believed, and still believe, that Mr. Berezovsky was wrong to have used the media, which he controlled, to exploit a public tragedy of that sort to further his own political agenda against the government. I made clear to Mr. Berezovsky what my views were. I did not openly disagree with Mr. Berezovsky very often and this fact alone caused some disturbance in our relationship. After that, we almost stopped meeting in person and I increasingly dealt with him through Mr. Patarkatsishvili.”

“Then I asked Mr. Patarkatsishvili about what happened with Mr. Berezovsky and why he suddenly had such a negative reaction to me. I had been thinking all this time that I had pleased him and had ensured that both he and Mr. Patarkatsishvili had enough income to allow them to pursue their various interests outside Russia and enjoy life. Mr. Patarkatsishvili had been declared the richest man in Georgia. Suddenly, when reading the interview in December, the idea presented itself for the first time that Mr. Berezovsky could be unhappy about something, and that made a strong impression on me. I had been so sure that Mr. Berezovsky would think and speak well of me so his interview had shocked me. I explained my feelings to Mr. Patarkatsishvili and he told me not to worry and pay no attention. He said that Mr. Berezovsky was losing sleep over the capitalisation of Sibneft and was now wishing that he could be part of it. He just said that Mr. Berezovsky was probably just jealous and could not cope with the fact that I might be richer than him. He assured me that, so far as he was concerned, given the situation that Mr. Patarkatsishvili and Mr. Berezovsky found themselves at the time, they had made very good money and were therefore very happy. I felt that Mr. Patarkatsishvili took my side. It was our first open conversation after the ‘final payment’ deal. We had similar conversations later, including in 2006 when he asked for my help in the ‘divorce’ from Mr. Berezovsky. However, this conversation in Georgia was the first time that Mr. Patarkatsishvili said that Mr. Berezovsky was wrong and told that it was ‘Boris being Boris’, and ‘you can’t do anything about it’. I still felt uncomfortable, as I did not want to believe that Mr. Berezovsky thought negatively of me; moreover, it was unjustified. Because of Mr. Berezovsky’s obsession with publicity, others might now believe that I had somehow deceived Mr. Berezovsky. That feeling was particularly unpleasant considering the fact that I had paid him in cash an amount that was absolutely unheard of at the time and had made him apparently happy at the time. I was the person who had been betrayed.”

“If Mr. Berezovsky had an interest in Sibneft, did Mr. Abramovich threaten Mr. Berezovsky that, unless Mr. Berezovsky sold that interest to him or his nominee, Mr. Abramovich would take steps to ensure that: i) his interest in Sibneft would be expropriated by the Russian state; and/or ii) Mr. Glushkov would be detained in prison for an extended period?”

“365. However, despite the sale of the ORT shares to entities controlled by Mr. Abramovich, and despite Mr. Abramovich telling us that he was working to make sure that Nikolay would be free, and despite our being told that Nikolay would be released on New Year’s Eve, Nikolay remained in prison. I had, and have, no doubt that this was Mr. Abramovich’s doing: he wanted Nikolay to stay in prison because he was determined to use the same pressure to which we had submitted in relation to ORT again for his own purposes, in order to take our share of Sibneft.”

“ … my clear understanding is that after Mr. Abramovich recognised how important Mr. Glushkov is for us and that we, without any discussion about price or anything, agreed that Glushkov will be released if we will -- if we’ll sell – return back our shares and not to be keep in jail a long, long time. Abramovich recognise that it’s -- this point is very sensitive for us. And just later on, but not too much later because even in autumn 2000, when we have been in Russia, Abramovich already mentioned that Sibneft is under pressure because of my new and -- because of my tension with Putin and he already that time start to, already that time start to present position that we had become more dangerous for the company than even before. But when he recognised that he has amazing leverage, then he made -- he is progressing in his, I don’t like to say, violence. Because initially he put Putin behind – he put Putin in front of him as far as ORT is concerned saying, ‘This is Putin, this is not me, this is Putin asking’. In Sibneft, position was different, ‘Putin is behind of me and you know that he is dangerous, he can do everything and I’m the person who has special relations with Putin’, and he may influence – ‘I may influence to his decision’. In RusAl case, he even did not put Putin at all as a name because he already was form himself, I’m sorry to say, as a gangster, yes, because he already knew that it’s enough him to do any step, we are not able to do anything. It’s like evolution of crime of Mr. Abramovich and in Sibneft it was the same story but it’s the story of Abramovich with Putin behind of him. Q. What is your evidence, if you have any, that Mr. Abramovich deliberately kept Mr. Glushkov in jail so as to be able to use the threat a second time? If you don’t have any evidence, fine; if you do, now is your chance to tell us what it is. A. It’s exactly the point. The point is that Abramovich has a great influence to Mr. Putin. I don’t think that Putin point was to seize Sibneft because he got that time what he want to get, ORT under his control, and recognising the importance for us of Glushkov, Abramovich used the same method, the same method, threat, and we didn’t have choice. We didn’t have choice for two reasons. Because, first of all, Abramovich did not deliver on the one hand that Glushkov will be released. On the other hand, he again said that he -- that Glushkov will be released and we will start negotiations, because it’s long story, not just for five minutes. And it is the point that we accept absolutely seriously, serious, that this is threat and [Glushkov] stay in jail long, long time if we will not sell our shares or if we will not sell --”

“But with the arrest of Nikolay, the betrayal of Mr. Abramovich, and the realisation that Mr. Abramovich was himself in a position to influence, and might well in fact be influencing, all that was happening, I saw Mr. Abramovich’s threats for what they were. … From the time of the Cap d’Antibes meeting in late December 2000, I believed that the pressure from the Kremlin (if any) was an excuse and that Mr. Abramovich was the person who would make the seizure happen (using his influence with President Putin), or not.”

“1) a threat by the defendant (D) to do something unlawful or “illegitimate”; 2) the threat must be intended to coerce the claimant (C) to take or refrain from taking some course of action; 3) the threat must in fact coerce C to take such action; 4) loss or damage must be incurred by C as a result.”

“15. At the May 2001 meeting, the Defendant told Mr. Patarkatsishvili: (1) that so long as the Claimant continued to hold any beneficial interest in Sibneft, Sibneft, its management and its owners would face continued persecution from the Russian Prosecutor’s Office and the tax authorities; (2) that if the Claimant did not relinquish his interest in Sibneft, it would come under attack by those in power in Russia in a manner similar to companies controlled by Mr. Gusinsky; (3) that if the Claimant did not relinquish his interest in Sibneft it would simply be seized by the Russian state without compensation. Accordingly, he had no alternative but to dispose of it to the Defendant.”

“… any informed and reasonable person would understand that Mr. Berezovsky was alleging that Mr. Abramovich was threatening (at any rate impliedly, if not expressly) that he would do what he could to bring about the threatened expropriation of Mr. Berezovsky’s Sibneft interests if he was not prepared to sell at an undervalue to Mr. Abramovich.”

“… unless we sold our interests in Sibneft, Mr. Abramovich would use his influence with President Putin and the Prosecutor-General’s office to ensure that [Mr. Glushkov] would not be released from prison” and that he had: “… no doubt that this was what Mr. Abramovich intended we understand” emerged for the first time in the Voluntary Further Information served in the course of the hearing in the Court of Appeal Response (2) of the Voluntary Further Information dated 17 January 2011. , as a result, I was told, of comments made by the Court, arguendo, to the effect that the only allegation then pleaded, namely that Mr. Abramovich had said that Mr. Glushkov “would now be released”

“Q. Let’s have a look at your conclusion to this section at paragraph 104 G(B)1/1.01/30. You say that you would not find it surprising that Mr. Abramovich was in a position to encourage state agencies, including the Kremlin, to “take steps helpful to him” if they were also beneficial to the Kremlin. Is that a fair summary of what you’re saying at paragraph 104? A. Yes. Q. What steps do you have in mind when you say that? A. If I can set up a number of scenarios: I don’t think Mr. Abramovich could have come to Mr. Putin and said, ‘Mr. X is causing me problems, I know that Mr. X is your good friend and a close ally, nevertheless I want you to help me take steps against him, to remove him as a competitor or whatever’, I would find that quite implausible. If Mr. -- Q. And -- sorry, forgive me, I didn’t realise you were continuing. Please go on. A. If Mr. Abramovich had come to Mr. Putin and said ‘There’s this Mr. X, I don’t think you know Mr. X, or you’re not interested in Mr. X, he’s a problem for me, can we do something about it, would you help me do something about it?’, I think that would be probably unwise, an unwise thing to do in the case of Mr. Putin, but I don’t find it totally impossible. Q. Right. A. If Mr. Abramovich came along to Mr. Putin -- put it another -- no, I’ll start again. If Mr. Abramovich knew that Mr. X was causing Mr. Putin considerable frustration and grief he could have two options, he could just say, “Okay, I’ll leave things to go their own way and hopefully the outcome that I want will just simply happen because Mr. Putin will take measures on his own”

“274. For my part, however, the decision was both a business and a personal one. From a business point of view, I needed to ensure that I did not make an enemy of Mr. Berezovsky or Mr. Patarkatsishvili. Although in late 2000 Mr. Berezovsky left Russia, at the time I had no way of knowing whether this state of affairs would last. At the time I met with Mr. Patarkatsishvili, he was still able to travel freely to Moscow and so far as I am aware, still had his direct connections with President Putin. It was not out of the question that, within a few months, Mr. Berezovsky would be back in Russia. Mr. Berezovsky had a reputation for bouncing back against all odds. I remember that in 1994 there was an attempt on his life, and he had to move to Switzerland. Many people I knew at the time thought that Mr. Berezovsky was finished, but he returned to Russia and became more powerful than before. Similarly, late in 1997 it became known that President Yeltsin had become tired of Mr. Berezovsky; but then, in April 1998, Mr. Berezovsky succeeded in getting himself appointed Executive Secretary of the CIS. Similarly, Mr. Berezovsky once injured his spinal cord, an injury that would normally leave someone paralyzed for life, but not him. On another occasion he contracted Hepatitis C which would have been the end of some people, but, after a period of looking a little yellow, he bounced back! He was quite an extraordinary person and the normal rules seemed not to apply to him. 275. So, although by the time I met with Mr. Patarkatsishvili in Courchevel, Mr. Berezovsky had clearly fallen out of favour with President Putin, I could not be certain that he would not regain influence in Russia. My only wish was to finalise all relations with Mr. Berezovsky and avoid an open conflict since this could have negative repercussions for me and Sibneft at a future date. 276. As far as I was concerned, by agreeing to make a single last huge payment, I was ‘buying myself my freedom’ from any association with Mr. Berezovsky and our krysha relationship. If, in his own mind, Mr. Berezovsky had by now convinced himself that what I was bullying him out of was his and Mr. Patarkatsishvili’s ‘rights’ to 50% of Sibneft or 50% of ‘me’ then I can say without any doubt that he and Mr. Patarkatsishvili gave me every reason to believe that they accepted the ultimately agreed price tag of $1.3 billion willingly and gladly. 277. As I said above, for me this was not only a business decision, but also a personal one since I would have an opportunity to close this particular chapter in my life, and it was very important to put an appropriate full stop at the end of my relationship with Mr. Berezovsky. He had played such a significant role. The $1.3 billion was an enormous amount of money to pay to someone who had already been well compensated for his services. Nonetheless, I felt a sense of responsibility for ensuring that he was ‘set up for life’; this payment was therefore also my way of saying to Mr. Berezovsky that, no matter what was happening in Russia, I remained loyal and would always respect what he had done for me. But that he should now leave me and Sibneft alone. 278. I never thought of getting Mr. Berezovsky to sign any official release. As I have already explained, krysha is not a legal arrangement or indeed an arrangement which is capable of being reduced to writing or being ended in writing.”

“A. I’ve described this krysha relationship: this is a very vague understanding and this is not the numbers, this is the relationship. To bring that relationship to a close and not to have any problems with regard to payments, with the nonstop stories that I owe them more and more, to bring that to a close, I was ready to make a final payment and bring this to a close. Q. By this stage you were no longer friends with Mr. Berezovsky; that’s right, is it not? A. I’ve explained yesterday, the word “friend”, this is a feeling. Certainly I was very grateful to him for what he’d done for me. Certainly I understood and I understand now and moreover I have no regrets because of paying and I would say -- and I wouldn’t use the word ‘pride’, I wouldn’t say I’m proud, but I’m very happy with myself this is the way I’ve done. I wouldn’t have done it in any different way. I was very grateful to him that he helped me, I myself would never have achieved results such as these, and therefore I thought that I had to pay him. The figure could have been disputed but the fact that I owed him to bring this relationship – our relationship to a close and not ever revisit that matter again, this is what I thought: yes, that he did have the right to demand. Q. You suggest you had no obligation at all and that this just was a goodwill payment of $1.3 billion that you were making to Mr. Berezovsky and Mr. Patarkatsishvili; is that what you suggest? A. I suggest that never ever had any legal obligations and the krysha relationship is not a legal obligation; this is an understanding. And once you get under the influence, until the relationship is brought to a close, you will have to pay. This is what I’m trying to explain here. Q. You see, I suggest to you, Mr. Abramovich, that the real and only reason that you were paying the $1.3 billion was because you were acquiring from Mr. Berezovsky and Mr. Patarkatsishvili their interests in Sibneft, and that is right, is it not? A. I was buying my freedom. I wasn’t buying the interest”

“In early 2001 I proposed to BB that we sell our shares in Sibneft. At this time it was clear that I would not be able to return to Moscow and would be forced to live as a political émigré. To live in such circumstances without money is difficult. BB resisted my proposal at first but finally agreed to sell. I spoke with RA. A meeting was set up in Munich in April/early May 2001. RA came to the airport with his wife Irina, and their children. Ruslan Fomichev also attended the meeting. We took a small room (approximately 4 square meters) at the airport. Our asking price for the shares was $2.5 billion, which already represented a discount as the value of the company at that time was at least $6-7 billion. RA refused to meet our asking price. This may have been because he did not have the money, or because he simply did not want our shares that much. It may be that he only wanted to pay out of the dividends! I was aware that our shares were held on behalf of RA and that there was nothing in writing to prove our ownership. I was therefore concerned that RA could obtain our shares for nothing. We agreed a price of $1.3 billion. When negotiating this deal there was no specific mention made of NG but this was not necessary as it was clear that his release was one of the reasons we were prepared to sell. Following the Munich meeting I kept in contact with RA. He was always complaining that he was experiencing political pressure from the Kremlin. I initiated the sale against the background of complaints from RA. I thought that it was a better option to sell and to relieve the pressure on RA. I believed from what RA said at the time that had we had stayed in the company then there was a risk that the company would have become a target. Our people were not managing the company. This was a serious problem for us because there was less and less possibility for us to understand exactly what was happening within the company. Over time revenue had increased (due to oil price increases) but dividends had decreased. We should have obtained significantly greater dividends than we did. Official reports made mention of this. We did not challenge RA’s people on this issue as we did not want to cloud the relationship. The $10 million which is mentioned in the Share Purchase Agreement was paid in Russia. This was paid by RA. There is, however, no evidence of payment. In mid 2001 RA agreed to make an initial payment of $500 million.”

“To live in immigration w/o money difficult. I wanted to sell shares. BB didn’t, ultimately said yes. I spoke with RA.” “Conflict with Putin long enough to live abroad without money – talk about sell of shares – after accept – talked to Roman.”

“Badri: better option to sell as decrease pressure on RA and allow us to live and oppose regime; “actually discussing better for Roman - if we stay in company - company a target. → Badri kept contact with Roman - Roman always complaining - experiencing pressure from Kremlin - initiative of Badri - where complaining - better option to sell. + to stop pressure.”

“ORT/Sibneft/RusAl Badri thinks deal fair on Sibneft – Badri not party – witness”

“Sibneft Roman all the time play – TV – not able to deliver – not my decision – Putin – sensitive with Sibneft – Putin No choice – believe them all the time – if not do it take it for nothing, like with Yukos – RA – he approached us – did not plan to sell – price would go up – understood RA difficult – ‗Putin press me –why give money to BB – I don’t know what to do. … Badri – ORT / Sibneft / RusAl They can take for nothing – position so – we will get everything. … If sell everything +Putin [don’t] push me- Easy to get NG out.” [Emphasis added by Mr. Rabinowitz]

“Q. Now, again, going back to Mr. McKim’s statement, the second sentence of paragraph 23, he says: ‘When Mr. Berezovsky was explaining matters to us it was sometimes difficult to know whether he was explaining his personal knowledge of events, whether he was explaining his and Mr. Patarkatsishvili’s joint recollection or whether he was translating Mr. Patarkatsishvili’s answers directly.’ Presumably you agree with that? A. Well, not entirely because I think, as I’ve said, on the whole Badri attempted to answer the questions that – or Badri spoke in English to us directly as regards his recollection. So there are certain bits of my notes that I quite clearly just remember Badri telling us directly in English; there are other parts where, yes, Mr. Berezovsky appeared to be translating for him. Q. But since -- and when Mr. Berezovsky was translating, you weren’t in a position to know whether the translation was accurate or not? A. No.” ‘When Mr. Berezovsky was explaining matters to us it was sometimes difficult to know whether he was explaining his personal knowledge of events, whether he was explaining his and Mr. Patarkatsishvili’s joint recollection or whether he was translating Mr. Patarkatsishvili’s answers directly.’ Presumably you agree with that? A. No.”

“NG not ment directly at mtg in Munich b/c others there – oblique ref ‘u rem our main pt’.”

“When negotiating this deal there was no specific mention made of NG but this was not necessary as it was clear that his release was one of the reasons we were prepared to sell. We did not mention Glushkov by name, due to the presence of Irina and Ruslan Fomichev, but I asked Roman whether he was aware of ‘our main issue’ and he confirmed that he knew what I meant.”

“65. A meeting was set up in Munich in April/earlyMay 2001 to finalise a deal and agree a price. Roman came to the airport with his financial manager Irina Panchenko. Ruslan Fomichev also came with me, although neither he nor Ms Panchenko were present for the bulk of the discussions between me and Roman.” 69. Roman also indicated that, although Glushkov had not been released from prison after the sale of ORT, if we sold our interests in Sibneft then Glushkov would be released. There was no mention of Glushkov in the presence of Mr. Fomichev and Ms Panchenko but after they had returned I asked whether he was aware of ‘our main issue’ and he confirmed that he knew what I meant.”

“But again, just note of the solicitors … who met him and understood in this way, and we had a lot of examples that solicitors understood not correctly”

“299 During the first months of 2001, I continued to have frequent discussions with Boris and Badri about Nikolai. I understood that, even though Nikolai had not been released as Mr. Abramovich had said he would following the sale of ORT, Mr. Abramovich was still trying to push Boris and Badri to sell Sibneft to him.”

“65 I was not involved in the mechanics of the sale of the shares in Sibneft, however I was aware that it was happening at the time. I recall that Boris and Badri seemed angry after the deal had been done. Boris told me that they did not get the price that they should have got for their shares because they had been forced to sell them under pressure.”

“Sibneft 224 While I was at the Haematological Centre, on some days, one of the people close to me was able to visit me. He was in contact with Badri, and told me that Badri had told him about the sale of Sibneft, and that everything was being done to secure my release. My lawyers were also telling me that negotiations were under way with regard to Sibneft and that, no matter what, I would be released. 225 After Sibneft was sold, and I was still not released, I sent a message with my lawyer, Mr. Borovkov, to Boris that he should not sell any more assets to secure my release. 226 I am very grateful for Boris and Badri’s efforts to obtain my release, and sorry that those efforts did not prove to be successful. I am sure that Boris and Badri would not have wanted to sell ORT and Sibneft. In particular, they were resources in the fight against President Putin. 227 I thought that President Putin was behind the sale of ORT, given the press exchanges and well-publicised meetings between Boris and President Putin in 2000, and ORT’s enormous political influence. I did not, and do not, know what degree of influence Roman had in that sale. However, in relation to Sibneft, I had no doubt that the Sibneft sale (from which Roman stood to benefit financially) was a measure of Roman’s influence and, at the time, I did not connect it to Putin.”

“What I do clearly recall is that Badri told me about the Munich airport meeting, and the pressure that Boris and himself were under to sell their shares in Sibneft. Badri said that Mr. Abramovich had told him that there had been some hitch about Nikolay’s release, and that he was sorry – but that if Boris and Badri sold Sibneft, Mr. Abramovich would do everything he could to try to get Nikolay released. Badri said that Mr. Abramovich had also told him that otherwise Sibneft would be taken away from Boris and Badri, and they would be left with nothing.”

“Mr. Berezovsky and Mr. Patarkatsishvili told me that they had been blackmailed by Mr. Abramovich, with the threat that unless they sold Sibneft then they would have it taken from them in any event and Nikolai Glushkov (who had been imprisoned in late 2000) would not be released. Mr. Berezovsky and Mr. Patarkatsishvili told me that Mr. Abramovich had taken the line of pretending not to be responsible for what he was threatening, suggesting that he was merely a messenger and was neutral, and that if Mr. Berezovsky and Mr. Patarkatsishvili did not do as he suggested then “they’’ would take Sibneft and keep Mr. Glushkov in prison.”

“… I also asked Mr. Berezovsky and Mr. Patarkatsishvili why they had sold their interests in Sibneft and in media concerns (like ORT) so cheaply (which fact Mr. Berezovsky had previously told me about). They replied that this had been as a result of threats made to them by Mr. Abramovich in relation to Mr. Nikolay Glushkov, their manager who had been imprisoned in Russia (which fact had been widely covered in Russian press at the time). They told me that the threats had been to the effect that if they did not agree to the sale price, Mr. Glushkov would remain in prison and their interests in Sibneft and the media businesses would anyway be expropriated by the Russian state.”

“… if the [alleged] threats … had been made, did they in fact coerce Mr. Berezovsky into disposing of his alleged rights in relation to Sibneft, or did he do so for other reasons?”

“If Mr. Berezovsky had an interest in Sibneft, did he sell it to Devonia Investments Limited under a sale and purchase agreement (‘the Devonia Agreement’) dated 11 /12 June 2001 between Mr. Berezovsky and Mr. Patarkatsishvili, Devonia Investments Limited (‘Devonia’ and Sheikh Sultan (‘the Sheikh’)?”

“9. Did Mr. Berezovsky and Mr. Patarkatsishvili effectively dispose of any of their alleged rights in June 2001 by way of the Devonia Agreement? In particular: (1) Was the Devonia Agreement capable in law of disposing of any of the rights under Russian law that Mr. Berezovsky alleges he had in respect of Sibneft? (2) Was the Devonia Agreement a genuine agreement or a sham?” (1) Was the Devonia Agreement capable in law of disposing of any of the rights under Russian law that Mr. Berezovsky alleges he had in respect of Sibneft? (2) Was the Devonia Agreement a genuine agreement or a sham?”

“SALE AND PURCHASE AGREEMENT … AGREEMENT for the sale and purchase of beneficial interests in part of the issued share capital of OAO SIBNEFT”

“RECITALS (A) OAO SIBNEFT (‘the Company’) is a company limited by shares incorporated in the Russian Federation with an allotted and issued share capital as at the date hereof of 4,741,000,000 shares. (B) The Company was originally incorporated by the Vendors and Mr. Roman Abramovich and the entire issued share capital thereof was jointly held between the Vendors and Mr. Abramovich (C) The Vendors are now the beneficial owners of 2,062,335,000 shares in the issued and allotted share capital of the Company (‘the Shares’). (D) At the request of the Vendors, Mr. Abramovich procured that the registration of the Shares were legal entities which are directly or indirectly wholly owned and/or controlled by Mr. Abramovich (‘the Registered Entities’). (E) The Vendors have agreed to sell and the Purchaser has agreed to purchase all or part of their beneficial interests in the Shares for the consideration and upon the terms and conditions set out in this Agreement. (F) Mr. Abramovich holds the Shares and/or controls the Registered Entities and through them the Shares as nominee in trust for and on behalf of the Vendors absolutely on verbal arrangements. (G) The Vendors confirm and are aware that the Purchaser intends hereafter to transfer the beneficial interests in the Shares being purchased hereunder to Mr. Abramovich or companies or entities controlled or associated with Mr. Abramovich. (H) In consideration of the Vendors entering into this Agreement the Guarantor has agreed to guarantee the obligations of the Purchaser under this Agreement.”

“… that the Spectrum option agreement was not genuine. That is why no reliance is placed upon it.”

“… even though the Sheikh may initially purchase the shares, it was understood that he would be more than happy to pass on the shares to Mr. Abramovich while keeping a small stake for himself. In addition, in order for Mr. Abramovich to do the deal, it is obviously a pre-requisite that he was happy with the commercial element and negotiations were continuing in this regard.”

“… the new deal would be more along the lines of the Option scenario previously used in the ORT deal … as in the previous deal the Sheikh would ultimately sell on the shares to [Mr. Abramovich] under this Option scheme.”

“[Mr. Curtis] has been brokering a deal whereby Abromovich [sic] will buy out the shares of Berezovsky and Badre [Mr. Patarkatsishvili]”

“in this regard, the disclosure by Mr. Abramovich, mid-trial, of Mr. Curtis’s files of his dealings with Mr. Abramovich in the mid-1990s was of some significance.”

“The plan therefore is that His Highness Sheikh Sultan bin Khalifa Al Nahyan of Abu Dhabi (the head of the Crown Prince’s office in Abu Dhabi) will arrange for an oil concession to be granted to Sibneft over a large tract of land in Abu Dhabi. It is anticipated that, in fact, this land will not actually have any oil. That will enable Sibneft to make a payment to Sheikh Sultan and Sheikh Sultan will then pay Berezovsky and Badre. There will be formal agreements reflecting this ‘reality’, although in fact this is merely a structure to enable the funds for Berezovsky and Badre’s interests to be extricated from Russia. It is likely that Sheikh Sultan will in turn, as part of the structure, acquire a 10% interest in Sibneft.”

“SLC then raised the new Sibneft share deal and confirmed that BB/AP beneficially owned 50% of the shares in Sibneft. He said however that the shares were registered 100% in the name of RA. Effectively BB/AP had approached Sheikh Sultan to buy BB/AP’s interest in the shares. SLC had set up a meeting with Sheikh Sultan and Clydesdale Bank as he wanted Clydesdale Bank to discuss the transaction. The effect of the agreement would be that Sheikh Sultan would purchase BB/AP interest at a discount and then sell on the shares to RA while retaining a minor interest. The reason behind the Sheikh being involved with the transaction was quite obviously his interest in the oil business and it would also benefit him to have a stake in that particular Russian oil company as he was expanding his oil business assets worldwide. He would also make a substantial profit on the transaction. “SLC said therefore the agreement at the moment would be that the Sheikh would pay BB/AP between US$500 million and US$1.5 billion for the shares and in response BB/AP would release their beneficial interest in those shares. The Sheikh would then pass on the beneficial interest to a third party (and it is likely this would be companies controlled by RA) but would retain a small interest and would also take a profit on the resale. It was also agreed that the Sheikh would provide his own cash to pay for the shares. SLC expected to receive a substantial amount of money in relation to this transaction as it related to the original introduction. As he was not involved on the sale on to RA, he would have no way of calculating the fee but was happy for the Sheikh to designate a figure. RA was expected to use profits from one of his aluminium operations in Russia to pay for the shares. SLC confirmed that RA was in control of 90% of the Russian aluminium industry. SLC explained that the reason why it had been structured this way was that RA was the 100% registered owner and had made representations in Russia that he was the beneficial owner. Therefore, it was difficult to justify any payment by RA for purchasing these shares. RA was also not prepared to acknowledge the trust arrangement.”

“While we are not acting for the Sheikh in connection with the sale of his interest to Mr. Abramovich, I am advised that Mr. Abramovich will be making separate deposits with Abu Dhabi Commercial Bank.”

“His Highness to provide written confirmation directly to Clydesdale that all sums forwarded to the accounts of BB or AP or to their respective trust company accounts in relation to the purchase of the Sibneft shares are the sole property of an are beneficially owned by His Highness. In order to provide confirmation that he is using his own money in relation to the transaction, this could be done by way of obtaining separate receipts from Mr. Abramovich and ensuring that His Highness uses independent funds to purchase the shares.”

“… posed a series of questions about hypothetical agreements to work as a partner with [Sheikh Sultan] in buying shares in Sibneft, and also on verbal call options given to [Mr. Abramovich] to sell at a price to be agreed.”

“Pursuant to various meetings with and instructions from Dr. Jumean, the enclosed Agreement has been drafted with minimal warranty protection and is virtually devoid of all the usual protections one would expect to see in document for this type of transaction. Notwithstanding this, I understand that you have sought various protections and comfort through other commercial arrangements with the parties which do not relate to matters which either this firm or Clydesdale bank are instructed upon.”

“I also confirm that the monies used to purchase subsequent tranches of shares (after the initial $100,000,000 purchase required above) will also be from my own funds and will not be the proceeds of the onward sale to Mr. Abramovich or his companies of the initial share holding purchased from BB and AP. Accordingly, I can confirm that my funds and those of Mr. Abramovich (or his companies) will not be intermingled.”

“Since we have heard nothing further since the sale of the first tranche we assume that the parties are dealing with the paper formalities themselves.”

“… as I indicated to you previously, Sheikh Sultan will be making an onward sale of the majority of the shares that he is acquiring pursuant to this transaction. We have declined to be involved in this transaction as we are not in a position to control it or to check on the background of the transaction. We have received confirmation from the sheikh that he is separately advised on all of these matters.”

“… a nebulous beneficial interest without any third party confirmations from Mr. Abramovich as to ownership.”

“… that the fees due to him over which the US$13.8 million form part, are part of the fee of 0.66% of the ‘turn’ between the price at which Sheikh Sultan purchased the Sibneft beneficial interests Sibneft from [Messrs Berezovsky and Patarkatsishvili] and the price at which he has sold those beneficial interests to Abramovich. Originally the Sheikh was going to pay those fees but it had been agreed that it would be taken from BB’s share (i.e. Itchen Trust) and credit would therefore be given for that amount in the context of the Sibneft shares (beneficial interests) transaction.”

“(1) … the fact that Mr. Berezovsky and Mr. Patarkatsishvili were persuaded to pay a large fee for Mr. Curtis’s services says nothing about the genuineness or otherwise of the agreement. (2) Mr. Curtis also played a role which went beyond that of a transactional lawyer: he was able to assist Mr. Berezovsky and Mr. Patarkatsishvili in forming relationships with the Sheikh Sultan and with Clydesdale Bank. As noted above, he assisted in brokering the transaction with Mr. Abramovich. (3) Finally, Mr. Curtis was uniquely placed to advise on a transaction of this sort, given his historic dealings with Mr. Abramovich.”

“The agreement was documented in order to evidence the source of monies for subsequent bank and due diligence purposes. We are advised that, had it not been for these requirements, it is possible the agreement would have been an oral agreement not recorded in writing.”

“The problems for the Vendors in selling their Beneficial Interests directly to Mr. Abramovich were: ● As Mr. Abramovich’s banking facilities were in Latvia (which at the time was a non EU member state), the Clydesdale bank would need to carry out source of funds checks on this money before it could be accepted by them. This was brought to Mr. Curtis’s attention by the Clydesdale bank in May 2001; ● There was a danger of political interference in the transaction with a significant risk of the Beneficial Interests being appropriated; ● Mr. Abramovich had made representations in Russia that he was the sole owner of Sibneft and he was concerned that a direct sale could damage his credibility. To overcome these issues (in particular the Clydesdale banks [sic] due diligence requirements), Mr. Curtis introduced [the Sheikh] into the transaction.”

“Mr. Berezovsky’s understanding is that the interests were then transferred [from Devonia] to Mr. Abramovich, or his entities, as envisaged by the recital [sc. Recital (G)], and that Mr. Abramovich paid the required amounts for them.”

“… I do recall being told later on, in around June 2002, that an Arab Sheikh was being used by Mr. Patarkatsishvili and Mr. Berezovsky possibly as an intermediary to legalise money. But as far as I was aware neither I (nor anyone on my team) had anything to do with that and I certainly saw no documentation involving any Sheikh. Nor was I aware of any ‘on sale’ of any ‘beneficial interests’ in Sibneft from any Sheikh or any other person. Any suggestion that there was a subsequent sale of interests from the Sheikh or Devonia to me is untrue. Prior to these proceedings, I had never seen any of the certificates of transfer of interests in Sibneft shares which appear to have been signed by Mr. Berezovsky and Mr. Patarkatsishvili.”

“Told Natalia [Ms. Khudyk]/Ruslan [Mr. Fomichev] to send directly to Eyhab [Dr Jumean]. Also told Eyhab to expect documents. However Ruslan directed that docs should be sent here. Do not know what this relates to in respect of the whole transaction so have not done anything..”

“I have told Ehab we cannot act on this – he is to refer to his A.D. [Abu Dhabi] lawyers – he confirms that he has already received these direct from (Sibneft?) and is dealing with Sibneft / Natalia direct – do not send.”

“I also confirm that all the payments made by me to the Test Trust account at Clydesdale Bank in London were from my funds as part of my purchase of Sibneft interests that I later sold to Roman Abramovich.”

“Devonia subsequently entered into commercial arrangements to sell on the whole of the Sibneft interests to entities controlled by Roman Abramovich.”

“5. What is the governing law of the claim in intimidation? In particular (1) Where did the most significant element or elements of the events constituting the alleged tort take place, for the purposes of section 11(2)(c) of the Private International Law (Miscellaneous Provisions) Act 1995? Did they take place in (a) England; (b) France; or (c) Russia? (2) If the events constituting the alleged tort took place in France or England, is it nevertheless substantially more appropriate (within the meaning of section 12 of the 1995 Act) for the applicable law to be Russian law?” (1) Where did the most significant element or elements of the events constituting the alleged tort take place, for the purposes of section 11(2)(c) of the Private International Law (Miscellaneous Provisions) Act 1995? Did they take place in (a) England; (b) France; or (c) Russia? (2) If the events constituting the alleged tort took place in France or England, is it nevertheless substantially more appropriate (within the meaning of section 12 of the 1995 Act) for the applicable law to be Russian law?”

“11. If the applicable law is Russian law: (1) Did Mr. Abramovich’s conduct fulfil the conditions for liability under Article 1064 of the Russian Civil Code?”

“(2) Did Mr. Berezovsky refrain from bringing proceedings against Mr. Abramovich within the limitation period (which expired in 2004) because he remained in fear as to the steps which Mr. Abramovich might take (a) to prevent Mr. Glushkov’s release from prison, and/or (b) to influence the ongoing prosecution of Mr. Glushkov? (3) If so: (a) Would it be an abuse of right within the meaning of Article 10 of the Russian Civil Code for Mr. Abramovich to rely on the expiry of the limitation period? (b) Is there a compelling reason for reinstating the limitation period pursuant to Article 205 of the Russian Civil Code? (c) Would the Claimant, in the light of all the circumstances as found by the Court, be unable to rely on Article 205 of the Russian Civil Code by reason of the fact that Mr. Glushkov left Russia in July 2006 and proceedings were issued in June 2007? (d) Should the Russian limitation be disapplied and the English limitation be applied on the basis that the application of Russian law would cause Mr. Berezovsky to suffer ‘undue hardship’ within the terms of section 2(2) of the Foreign Limitation Periods Act 1984?” (a) Would it be an abuse of right within the meaning of Article 10 of the Russian Civil Code for Mr. Abramovich to rely on the expiry of the limitation period? (b) Is there a compelling reason for reinstating the limitation period pursuant to Article 205 of the Russian Civil Code? (c) Would the Claimant, in the light of all the circumstances as found by the Court, be unable to rely on Article 205 of the Russian Civil Code by reason of the fact that Mr. Glushkov left Russia in July 2006 and proceedings were issued in June 2007? (d) Should the Russian limitation be disapplied and the English limitation be applied on the basis that the application of Russian law would cause Mr. Berezovsky to suffer ‘undue hardship’ within the terms of section 2(2) of the Foreign Limitation Periods Act 1984?”

“Issue B1: Was an agreement made between Mr. Abramovich and Mr. Berezovsky (i) in 1995 or (ii) in late 1999, the effect of which was that Mr. Berezovsky would have an interest in any aluminium producers which might be acquired by Mr. Abramovich or his companies (in the event the Bratsk and KrAZ assets)?”

“Did Mr. Berezovsky acquire any interest in any Russian aluminium industry assets prior to the meeting at the Dorchester Hotel in March 2000 (other than as a result of any bilateral joint venture between Mr. Berezovsky and Mr. Patarkatsishvili)?”

“… describe an agreement to acquire the Aluminium Assets on the same terms and in accordance with the 1995 Agreement…In summary, the parties agreed that the Aluminium Assets would be the subject of the partnership that they had agreed in 1995.”

“ii) Acquisition of initial aluminium interests 250 The opportunity to invest in the aluminium industry came about because in 1999, as in 1995, the political situation in Russia was largely uncertain due to the upcoming Parliamentary and presidential elections. As a result, many businessmen started to sell their Russian assets. Contrary to the views of many others, I believed in the likelihood of victory of the democratic candidates in the elections and, I therefore continued to invest in business in Russia. 251 In the winter of 1998-9, Lev Cherney (the brother of Michael Cherney and the business associate of the Reuben brothers who operated through Transworld Group) approached me to assist in resolving a dispute in relation to the aluminium plants at Krasnoyarsk between the owners and the governor of the Krasnoyarsk region, General Lebed. 252 As described at paragraph 162 above, I had close contacts with General Lebed. After President Yeltsin sacked him from his post as Secretary of the Security Council, I supported and lobbied for him in the elections for the position of Governor of the Krasnoyarsk region in 1998, which he won. 253 I went to Krasnoyarsk myself and had negotiations with General Lebed, and with the Chairman of the board of the Krasnoyarsk aluminium plant, Anatoly Bykov. I managed to bring them to the negotiating table and there mediated an agreement between them. I should say that I have seen that this episode is inaccurately described in paragraphs 249 to 250 in Mr. Marino’s first statement in this action. Having considered very carefully the position I can confirm that the paragraphs above are accurate. 254 Later in 1999, Dmitry Bosov (a Russian businessman and Manager of the Transworld Group) approached me with the proposal that my group purchase various aluminium interests in Bratsk and Krasnoyarsk. Badri also had extensive discussions with David Reuben, on behalf of the Reuben brothers from January 2000 onwards. We had not previously considered investing in the aluminium industry, although of course I was aware that it was a very important industry in Russia and a very profitable business. I discussed the possibility with Badri and we decided that a buy-out of the existing owners of these aluminium assets was worthwhile. 255 Badri informed me that Oleg Deripaska and Mr. Fridman were also interested in acquiring those aluminium assets for their respective groups (Sibal and Alfa). 256 Badri and I raised the Bosov proposal with Mr. Abramovich, as we considered we were obliged to do in accordance with our 1995 agreement with him. Mr. Abramovich said that he would need to discuss it with Mr. Shvidler and made the point that he was not knowledgeable about the aluminium sector. Mr. Abramovich ultimately agreed to the proposal. Mr. Abramovich asked that my name should not appear as an interested party in the new aluminium venture because of my political exposure, just as he had requested with Sibneft. 257 I should say that although I have mentioned Mr. Bosov, it was Badri who was the deal-maker with regard to the purchase of the Bratsk and Krasnoyarsk assets. When Mr. Bosov tried to present himself to us as being the party who should lead the negotiations and make the deal, I recall Badri saying to me that this should be his, Badri’s, role as it was he that had good relations with key participants in the aluminium industry, such as Lev Cherney, Vasily Anisimov and the Reuben brothers. Badri also had extensive discussions with David Reuben, on behalf of the Reuben brothers from January 2000 onwards. 258 As far as I was aware, throughout this period, Badri remained totally loyal to me and supported me in my political struggle. It was important to Badri and to me, particularly in view of my tension with the Russian authorities, that the aluminium assets were, insofar as possible, kept out of reach from politically motivated attacks. As I have set out above, by this point I had already come under attack from Prime Minister Primakov, there had been raids on my businesses and I had been indicted on baseless charges (which were later dropped) relating to what was alleged to be an unlawful business activity in connection with Aeroflot. For this reason, we agreed at Mr. Abramovich’s request that Badri’s and my interest in the aluminium assets subsequently acquired on behalf of the three of us would not be made visible and would instead be held by Mr. Abramovich through offshore corporate vehicles. 259 Indeed, when Badri and Mr. Abramovich were negotiating the acquisition of these aluminium interests, they told me that they were making the arrangements through offshore structures and subject to Western law to provide us with greater protection against abusive interference by the Russian authorities. The interests acquired comprised interests in factories and related businesses at Bratsk, Krasnoyarsk and Achinsk, including interests in OJSC Krasnoyarsk Aluminium Plant, OJSC Krasnoyarsk Hydro-Electric Power Station, OJSC Achinsk Alumina Complex, and OJSC Bratsk Aluminium Plant. (I visited the Krasnoyarsk aluminium plant, and the Krasnoyarsk hydro-electric power station myself in the summer of 1999 or 2000, to familiarise myself with my investments. I met there with the General Director of the Krasnoyarsk Aluminium Plant, Alexey Barantsev). 260 We agreed that the purchase price of the aluminium assets would be paid for from our entitlement of Sibneft profits. As with Sibneft, the Abramovich/Berezovsky/Patarkatsishvili interest in the aluminium assets were subject to a 50:50 split between Mr. Abramovich on the one hand, and Badri and me on the other, in accordance with the agreement made regarding future business interests and in accordance with the use of Sibneft profits to acquire the assets. Badri’s and my share was the subject of our own Joint Venture agreement referred to above (i.e. that, being a commercial venture, our interest in the aluminium business would be shared 50:50). 261 There was some disagreement during the discussions as to who would manage the aluminium business. Badri wanted to manage the aluminium business himself, whereas I preferred that Mr. Abramovich should have this responsibility as it was important that Badri should continue concentrating on managing ORT. Owing to the scale of the aluminium business we were setting up, I was concerned that if Badri were to manage it he would have to stop managing ORT. ORT was the priority for me at the time, particularly in view of the forthcoming Presidential elections in Russia in 2000. Just as he had in 1995 when I asked him to concentrate on managing in ORT, at this time too Badri agreed to do as I has requested. 262 I was not involved in the detailed discussions leading up to the purchase of the aluminium assets. I have been shown a copy of the contract (which is dated 10 February 2000 and is for the sale and purchase of various aluminium assets comprising shares in OJSC Krasnoyarsk Aluminium Factory, shares in OJSC Krasnoyarsk Hydro-Electric Power Station, shares in OJSC Bratsk Aluminium Plant, the business of Bratsk and the shares in and business of a group of assets defined in the contract as “the Siberian Complex” (which included Achinsky Integrated Aluminium Works). The purchasers under the agreement are said to be Mr. Abramovich, Mr. Shvidler and Badri (all three are signatories to the contract and enter into it on their behalf and on behalf of companies represented by them). US$550 million was to be paid as the purchase price for the assets. Although I was not a signatory to the agreement, I consider that I acquired interests under it as a result of the agreements with Badri and with Mr. Abramovich that I have discussed above. Another formal reason for not signing this personally was that I was a member of the Duma at this time, and I was aware that under Russian law I was not allowed to be directly involved in business and could not put my signature on this agreement. I am surprised that Mr. Abramovich signed it personally despite being a member of the Duma as well. It was reflected in the contemporary press (both Russian and Western) which reported that I was one of the purchasers of the aluminium assets. 263 Although I was not involved in deciding on or in implementing the structures for the vehicles used to receive the acquired aluminium interests that I have just discussed, my understanding was that the vehicles used would be Western entities, contracting under a non-Russian system of law (probably English – what we often called “British” law – or similar) in order to protect the aluminium interests against the kind of attacks I had experienced on my businesses in 1999, as well as to make them more tax efficient.”

“I was the key person and it’s clear why: because the initial point was people came to me asking -- proposing to sell. If they will not come to me, it means that it’s no deal at all in the beginning. It’s in completion, I mean in negotiation later on how to structurise, how to -- and so-so, definitely Badri and Roman, they play amazing role in that. But as far as their generation of -- not generation -- as far as the beginning of everything, without being impossible to move forward, definitely I was the key person and everybody understood that. See Day 9, page 160. … But again, if you ask me why I think that I’m key person, it’s not because I talk with Mr. Abramovich or with Mr. Badri. It’s not so. I key person just because people who propose that, they propose it to me; not even to Badri, I would like to say. Because they understood that we -- they did not maybe believe so much like we believe that we’ll create political stability in Russia, we’ll win elections”

“General Lebed had nothing to do with the acquisition of assets and who acquired them and he actually did not say whether he was for or against that; that’s not part of his authority. It’s difficult for you to -- for me to explain, but local authorities had nothing to do with share acquisition process. However, the situation prevailing, prevailing with the workforce, with the trade unions, when everybody came out into the streets and started protesting, that really was very relevant to the local authority and he was very keen for this matter to be resolved”

“In conclusion, the governor refuted the information that Boris Berezovsky is going to buy some of the shares of the Krasnoyarsk companies. ‘In this transaction Boris Berezovsky is a middleman. The main purchaser is Roman Abramovich’, Alexander Lebed declared.”

“… a tangential dispute about whether or not Mr. Berezovsky was present at the meeting when the Bosov proposal was originally raised with Mr. Abramovich”; that the additional evidence relied upon, and the presence of Mr. Berezovsky at the Dorchester Hotel meeting, made it clear that he was involved with the proposal. It was further submitted that, nonetheless: “… given the fact that Mr. Berezovsky and Mr. Patarkatsishvili tended to operate in partnership in all the other business transactions they engaged in (LogoVAZ; ORT; Sibneft), and the fact that both Mr. Berezovsky and Mr. Patarkatsishvili had been involved the previous year in Krasnoyarsk, the strong likelihood is that Mr. Berezovsky was also involved in the original proposal alongside Mr. Patarkatsishvili.”

“A. … people want to see me that I’m really real, I’m sorry to say that, and this was – definitely they want to understand that it’s really me who is part of this deal. I think particularly it was important for David Reuben because he was foreigner, he was not so hard involved in that. But on the other hand, as I told you, that time I had good relations with Mr. Anisimov and who else who I mentioned.”

“158. As for Mr. Berezovsky, he had no role at all in the above process. I never discussed anything relating to the acquisition of the Aluminium Assets with him, and Mr. Berezovsky certainly did not originate the proposal to acquire these assets. If there was any agreement between Mr. Berezovsky and Mr. Patarkatsishvili relating to the Aluminium Assets, this was not something I knew about.”

“159. Mr. Berezovsky, however, was never in the picture. He had no involvement in the acquisition of any of the aluminium interests of Mr. Abramovich, nor was there any agreement that he would acquire any such assets either jointly, or at all, nor that anything was owed to him in respect of the role played by Mr. Patarkatsishvili.”

“… never seen or heard him [Mr. Berezovsky] to take part in any negotiations, he was never at any meetings, and these things were never discussed”

“But I can’t recall because this is very significant to you in this case; to me its just another man that I met. It’s not something that I would remember or was not of any importance to me.”

“part of party 1 and each played our own specific role. As a group we were party number 1, but that doesn’t mean that as a group we’re all acquiring the assets.”

“Without Badri, I would not have poked my nose in there. Every three days somebody was murdered in that business”

“… only after the Dorchester Hotel meeting and … knowing that that they were false agreements and that they were never intended by either side to have any legal effect at all”

“… although he [Mr. Berezovsky] was not expressly identified as one of the purchasers on the face of the 10 February 2000 Master Agreement, the definition of Party 1 was carefully not limited to Mr. Abramovich, Mr. Shvidler and Mr. Patarkatsishvili, but extended to and included the 4 offshore companies which they purported to represent (namely Runicom Fort, Galinton, Dilcor, and Palmtex). Mr. Berezovsky’s case is that he was one of the owners of those 4 offshore companies, and therefore also one of the purchasers.519 519 See Answer 27 of the Response to Part 18 Request for Further Information dated 24 March 2011.” [Emphasis supplied]

“27. In relation to any such assets that it is alleged were ‘beneficially owned’ by Mr. Berezovsky please identify under which law and by virtue of what rights such beneficial ownership interests are alleged to have arisen.” “27. The system of law most closely connected to the acquisition of the aluminium assets was English law (as the law expressly chosen in all the purchase contracts entered into by the Offshore Companies). Mr. Berezovsky’s rights or interests in the Offshore Companies arose (under Russian and/or English law): (1) Pursuant to the 1995 Agreement; … (3) By reason of the fact that payment for these assets came from Mr. Berezovsky’s, Mr. Patarkatsishvili’s and Mr. Abramovich’s share of profits derived from their interest in Sibneft. Those rights or interests in the Offshore Companies are evidenced in writing by (i) the fact that pursuant to the Share Purchase and Sale Agreement dated 15th March 2000, and the Amended and Restated Share Purchase and Sale Agreement dated 15th May 2000, in each case between Runicom Limited and GSA (Cyprus) Limited and in each case governed by English law, Runicom Limited represented that others apart from Runicom Limited (described variously as the Other Selling Shareholders” and the “P1 Shareholders”) were legally and/or beneficially interested in the Offshore Companies; and/or (ii) the fact that the 10 February 2000 agreement by which the aluminium assets were acquired identifies Mr. Patarkatsishvili (along with Mr. Abramovich and Mr. Shvidler) as one of the purchasers of the assets.” (1) Pursuant to the 1995 Agreement; … (3) By reason of the fact that payment for these assets came from Mr. Berezovsky’s, Mr. Patarkatsishvili’s and Mr. Abramovich’s share of profits derived from their interest in Sibneft. Those rights or interests in the Offshore Companies are evidenced in writing by (i) the fact that pursuant to the Share Purchase and Sale Agreement dated 15th March 2000, and the Amended and Restated Share Purchase and Sale Agreement dated 15th May 2000, in each case between Runicom Limited and GSA (Cyprus) Limited and in each case governed by English law, Runicom Limited represented that others apart from Runicom Limited (described variously as the Other Selling Shareholders” and the “P1 Shareholders”) were legally and/or beneficially interested in the Offshore Companies; and/or (ii) the fact that the 10 February 2000 agreement by which the aluminium assets were acquired identifies Mr. Patarkatsishvili (along with Mr. Abramovich and Mr. Shvidler) as one of the purchasers of the assets.”

“The Master Contract defined the Party 1 purchasers, not just as Mr. Abramovich, Mr. Shvidler and Mr. Patarkatsishvili – but also the 4 offshore companies which they represented, and which actually became the legal owners of the aluminium assets. Mr. Berezovsky has always asserted that he had an interest in these companies – and therefore was in fact present, within the definition of Party 1 purchasers. Mr. Abramovich has not been able to refute that, by showing that the 4 offshore companies belonged solely to him.”

“Q And in your conversations with Mr. Patarkatsishvili about the purchasers and the purchaser not being Mr. Deripaska, was mention made of Mr. Berezovsky? A. No, just -- and even if it is, I can’t remember. Q. You said earlier that reference was made to Sibneft. A. Yes. Q. Is that something that Mr. Patarkatsishvili himself said? A. No, my own partners were talking as well, they were discussing this. You see, we never specifically mentioned who one person is or one company is. So when we talk about the sale, we are talking about Badri and his partners. It was common knowledge Mr. Badri was a partner of Mr. Berezovsky; he said so, it was a known factor, so I assumed it to be that way. I have never seen any documents or papers. I was not a friend of either of them to say. I was not the enemy either. But I really had no idea what or where or how. That was how we assumed it to be Day 15 pages 17- 18. .”

“… didn’t quite know what kind of arrangements might have existed between Abramovich, Shvidler and Badri … and wasn’t all that bothered at that time Day 31, page 126. .”

“In 1999, a number of aluminium assets owned by me, Mr. Deripaska and our partners were merged to form a new company, Sibal. Also in 1999 I had heard that Lev and [the TransWorld Group] were seeking to sell all their aluminium assets. I wanted to buy them out and I spoke to Lev at some point in 1999 to try to secure the deal. Unfortunately, my business relations with my brother were not particularly good at this time and he would not give me a final answer. Later in 1999, Mr. Nekrich and another former business partner of mine, Mr. Iskander Makhmudov called me from Moscow and told me that Lev and [the TransWorld Group] had sold all their aluminium assets in Russia to Mr. Berezovsky and his partners in Sibneft. Lev also confirmed to me that this was the case. I was not pleased with this development, as I had also been interested in buying those assets.” [Emphasis added].

“bought up … in what looks like another major power play involving two of the country’s most powerful businessmen - oil tycoon Boris Berezovsky and … Roman Abramovich”

“And is your [aluminium] transaction complete? Almost. The shares have been transferred to the new owners and Russian Aluminium is practically functioning as one company. But it may take a year for the paperwork to be completed and for the transaction to be approved by various committees. … But what funds were used to buy aluminium plants? It is rumored that Sibneft’s money was used. Sibneft’s money was not used in the aluminium deal. And it is easy to determine by looking at our GAAP accounts. Our shareholders obtained funds in particular from Western investment funds.” [Emphasis added]

“Unclear shareholding structures remain a worrying aspect of many Russian oil companies. Can you reveal who the principal shareholders are in Sibneft? First, I would like to say that Sibneft is a separate oil company not mixed up with the aluminium interests of our shareholders. As for the list of shareholders, Roman Abramovich controls about a 40% stake, a similar amount is controlled by the company’s top management, while the rest is in free float. I would also like to underline that the Chorny [sic] brothers (metals magnates who handed over their aluminium assets to Sibneft shareholders at the beginning of the year) have never been and are not represented in Sibneft” [Emphasis added]

“About a year ago, Sibneft shareholders said they had acquired a group of aluminium plants. Now they have purchased GAZ and are creating the RusPromAvto company. This gives one the impression that there is some kind of financial-industrial group. Can it be described? No it can’t. Sibneft and the aluminium smelters have common shareholders, of course. But this does not change anything.” [Emphasis added]

“Issue B2: Was it agreed at the Dorchester Hotel on 13 March 2000 that Mr. Berezovsky and Mr. Patarkatsishvili would have a share of the aluminium business created by the merger with Mr. Deripaska’s aluminium interests?”

“17. At the Dorchester Hotel meeting, did Mr. Berezovsky, Mr. Patarkatsishvili, Mr. Abramovich and Mr. Deri-paska agree to pool their assets in the Russian aluminium industry? 18. Was it expressly agreed and/or understood at the Dorchester meeting: (1) That Mr. Abramovich would, as trustee, hold half of his 50% interest on trust for Mr. Berezovsky and Mr. Patarkatsishvili, as beneficiaries; and/or (2) That none of Mr. Deripaska, Mr. Abramovich, Mr. Berezovsky and Mr. Patarkatsishvili would sell his interest in RusAl without the agreement of the others; and/or (3) That Mr. Abramovich would assume fiduciary obligations in relation to Mr. Berezovsky and Mr. Patarkatsishvili?”

“… because Mr. Berezovsky and Mr. Patarkatsishvili were Mr. Abramovich’s partners, and he needed their consent to [the] RusAl merger. Indeed just a few days earlier, he had warranted in the Preliminary Agreement that they would consent [as per clause 4.2].”

“For me, meeting with Berezovsky was always important. Some of them were more important, other meetings were less important. If he had asked me to fly to New York, I would have probably flown to New York if I had that possibility to do so Abramovich, Day 19, page 122. . … At that point in time Mr. Berezovsky was one of the most influential people in Russia and if he asked me to come and tell him about something I usually did that immediately, without delay Abramovich, Day 19, page 124. . … To me personally, there was no benefit that accrued to me personally from this. I usually complied, if I could, with [Mr. Berezovsky’s] requests.”

“It will sound strange, but he [Mr. Abramovich] always did [respond to Mr. Berezovsky’s requests to see him], and Badri insisted that Boris wanted to see him. … When Mr. Berezovsky heard about this merger from Mr. Patarkatsishvili, who was told by Mr. Abramovich, he decided that the meeting was necessary and Mr. Abramovich went along. Mr. Berezovsky liked to be associated with big deals and small deals as well. So what was the motive from his side? I guess that nothing”

“that’s just the kind of relationship we had”

“… he was certainly a man with a rich sense of his own importance and a taste for grandstanding may well be a sufficient explanation of why he wanted to have it.”

“In March 2000, Mr. Abramovich asked me to accompany him to London to meet Mr. Berezovsky. I was keen to build a good relationship with Mr. Abramovich as my new business partner. In addition, Mr. Berezovsky still owed me the abovementioned money and Mr. Shvidler assured me that the repayment of this long-standing debt would be resolved at the meeting. As a favour to Mr. Abramovich and in the hope of recovering the money Mr. Berezovsky owed me, I agreed to travel to London to meet him. The three or four hour plane journey was nothing out of the ordinary for me since I often had to travel long distances for business - the aluminium plants which I controlled were located in Eastern Siberia, over 3,000 kilometres from Moscow. I recall thinking that the flight would be a good opportunity to get to know Mr. Abramovich and Mr. Shvidler better. Whilst all the key terms of the combining of various of our businesses had already been agreed and documented in the Preliminary Agreement, there were a number of ongoing issues to discuss in relation to the new business.”

“13. I also recall well the discussion which lay behind the provisions of Clause 4.1 which refers to the principals and their partners warranting that they own the assets. The reference to partners in Clause 4.1 expressly excludes anyone from TWG. This was significant. At the beginning of the discussions, neither Mr. Deripaska nor I believed that Mr. Abramovich could have purchased the Aluminium Assets and that he had paid such a large sum. The TWG shareholders had spent so long aggressively acquiring and building up the Aluminium Assets that we could not quite believe that they had relinquished them to Mr. Abramovich or that they were now out of the industry. We suspected that Mr. Abramovich could be a nominal owner only and that we might find ourselves having to deal with our rivals again. Mr. Abramovich convinced us, however, that he really had purchased the Aluminium Assets and that he intended to retain them. I believe there was the same suspicion on the other side about TWG, so the parties included a mutual warranty by which each side expressly disclaimed that anyone from TWG was a partner. Given the focus of the discussion about TWG, I do not recall any discussion about who, if anyone was a partner of each principal. For my part I assumed that Mr. Shvidler was Mr. Abramovich’s partner. I am certain that there was no discussion by telephone with, or mention of, either Mr. Patarkatsishvili or Mr. Berezovsky throughout the entire meeting. … 26. I never saw Mr. Berezovsky at any stage of the merger, nor did I ever hear from anyone at that time of Mr. Berezovsky having an interest in any of Mr. Abramovich’s assets that went into the merger. I also do not recall any mention of Mr. Patarkatsishvili having an interest in any of Mr. Abramovich’s assets that went into the merger. I have never been involved in any business with either Mr. Berezovsky or Mr. Patarkatsishvili. Indeed, I never met Mr. Patarkatsishvili and I have never formally met Mr. Berezovsky….”

“You see, the assets that Abramovich had acquired at that time were in a rather complex -- complicated condition. All those factories were on the brink of bankruptcy, including the Achinsk plant, which had already been put under external management, was in administration. And unless swift action had been started, almost immediately, in order to achieve a recovery from the crisis -- and this is a production that cannot be stopped, this is a continuous production -- even if for one day they had fallen short of feedstock the assets would have been greatly damaged and harmed. I was interested, I had a vested interest in making sure that everything that we had agreed upon be implemented very, very accurately and clearly in order to save those plants. Now, for that, all the interested persons had to act together, and that means the suppliers, the managers of those plants, those people who had trade relations with those plants. And this is exactly what I asked Mr. Abramovich to ensure that it happened, to the extent that that was under his influence Deripaska, Day 29, page 34. .”

“86. I met Mr. Patarkatsishvili in Georgia on one occasion in 2003 (at a meeting at which Mr. Abramovich was not present), which I believe to have been in the late summer/early autumn of 2003 because I can recall that I had been heavily engaged in the acquisition of Chelsea Football Club and its aftermath at the time of the visit (that transaction completed in July 2003). Mr. Abramovich had told me that Mr. Patarkatsishvili had invited him to his seaside home to see the house, which had recently been completed, and to discuss with him the possibility of an investment in a football club. Because of a Russian arrest warrant issued against Mr. Patarkatsishvili, he was not able to travel outside Georgia. Mr. Abramovich asked me if I could attend in his place as a sign of respect to Mr. Patarkatsishvili. I was in Moscow at the time and had no desire to go but, given my involvement with Chelsea Football Club, I reluctantly agreed. I travelled to Batumi, Georgia, in a chartered aircraft, and was then transported by Mr. Patarkatsishvili’s helicopter to his house. … 89. I recall that there were ten or so adults at the beach house and there were wives and children around. This was not a Western-style sit-down lunch, but rather a very informal gathering with people coming and going throughout the time I was there. I was taken on a brief tour of the house, but I spent the rest of the time outside, where food was served, with the other guests and family. In addition to Mr. Patarkatsishvili, I recall that Mr. Fomichev was there. I had met Mr. Fomichev before and knew him slightly. Additionally, I do recall that there was one gentleman who I took to be English, or perhaps American, who could have been Mr. Curtis, but I had not met him before and I have not seen him since. I believe I may have spoken with him briefly in English (I do not recall that he spoke any Russian, unlike the other guests), but this would have been nothing more than polite conversation - not about business matters. I did not take particular notice of this person. 90. All I can remember discussing with Mr. Patarkatsishvili was the recently announced acquisition by Mr. Abramovich of Chelsea Football Club, and I recall Mr. Patarkatsishvili saying that this had been a great idea and wanting to do the same. Mr. Patarkatsishvili raised the fact that he had some contacts in Brazilian football and enquired whether Mr. Abramovich had any interest in making an investment along with him. As I recall, he was hoping that this would enable him to travel to Brazil, despite the arrest warrant. He felt that he had acquired a negative image and said that he was hoping to get the same kind of positive publicity in Brazil as he saw Mr. Abramovich as having obtained in England. He was very excited about this idea. I assured him that I would speak to Mr. Abramovich about the proposal. I have a recollection that Mr. Patarkatsishvili also mentioned that he had contacts in Georgian football circles and, I believe, he said that he had made an investment in Dynamo Tbilisi (a prominent Georgian football club). He may also have asked whether Mr. Abramovich would like to be involved in an investment in that club, but I cannot now be sure. 91. I stayed at the house for approximately two hours and then left to return to the airport where I took another charter flight, this time to Nice where Mr. Abramovich was staying. I passed the details of my conversation about investing in football clubs on to Mr. Abramovich when I met with him and Mr. Abramovich told me that he had no interest in investing, but that he was ready to consider assisting Mr. Patarkatsishvili in his venture. I then continued my return flight back to Luton and home in London. The following year Mr. Patarkatsishvili did invest in the Brazilian club Corinthians along with a partner, Kia Joorabchian. Mr. Abramovich did not provide any assistance in relation to the investment.”

“What enables you to be certain that no note was being taken at the meeting [at Mr. Patarkatsishvili’s house in Georgia]?”, Mr. Tenenbaum for the first time gave double hearsay evidence to the effect that Mr. Fomichev had told Mr. Shvidler and others, about six months prior to trial, that the Curtis notes had been compiled after Mr. Tenenbaum had left the Patarkatsishvili luncheon party and that they had been dictated by Mr. Patarkatsishvili to Mr. Curtis. That evidence had not appeared in any of Mr. Tenenbaum’s or Mr. Shvidler’s previous witness statements. In further cross-examination by Mr. Rabinowitz on this issue, Mr. Tenenbaum gave evidence that, in the context of a discussion as to whether to call Mr. Fomichev as a witness, Mr. Fomichev forwarded to Mr. Shvidler a text message said to be from Mr. Berezovsky which Mr. Fomichev read as a threat from Mr. Berezovsky, which Mr. Fomichev said gave rise to concerns for his safety. Mr. Tenenbaum described the text message as being along the following lines: “A …: ‘I know you’re helping them. I’m watching you. I’m listening to your phone calls. I’m controlling your Skype.’ And I think he referred to Dr. Evil, ‘I’m Dr. Evil’, something to that effect. Q. So you say Mr. Berezovsky signed himself off as ‘Dr. Evil’ in this? A. Correct.”

“Were payments of $50 million to Blue Water Resources Inc in 2003, and $125 million to Rich Brown Enterprises Limited from 2003 to 2005, payments of RusAl profits; or were they part of a payment of interest and “commission” in relation to the $1.3 billion?”

“I’m almost sure that this knowledge of Mr. Marino got not from myself directly; maybe he analyse[d the] papers Berezovsky Day 9, page 128. .”

“… the source of the funds that will be paid by way of dividends by RuAl Trade Limited are derived from interests it holds in and its involvement in the trading activities of aluminium products.”

“1380. In short, it is Mr. Abramovich’s case that: (1) In the summer of 2003 he reached an agreement with Mr. Deripaska to sell the entire 50% stake in RusAl to Mr. Deripaska at a fixed price ($1.825 billion for the first 25% stake plus 2 other assets; and $450 million for the second 25% stake); (2) However, Mr. Deripaska did not have sufficient cash to acquire the entire 50% stake in RusAl in one go; (3) The agreement to sell the entire 50% stake was therefore not legally documented at that time; instead, all that was legally documented was the sale of the first tranche and an option agreement in respect of the second tranche. 1381. There are, yet again, real difficulties with Mr. Abramovich’s explanation which suggest that his evidence on this issue is very unlikely to be the truth. In particular: (1) His explanation cannot be squared with the evidence Mr. Deripaska previously gave in his litigation with Mr. Michael Cherney as to why it was that the RusAl sales were conducted in two stages. (2) His evidence cannot be squared with the contemporaneous contractual documentation, suggesting, as it does, that there had been no agreement reached between Mr. Abramovich and Mr. Deripaska in the summer of 2003, regarding either a sale of the second tranche, or an overall sale price for the entire 50% stake in RusAl. (3) The agreement to sell the entire 50% stake was therefore not legally documented at that time; instead, all that was legally documented was the sale of the first tranche and an option agreement in respect of the second tranche.” (1) In the summer of 2003 he reached an agreement with Mr. Deripaska to sell the entire 50% stake in RusAl to Mr. Deripaska at a fixed price ($1.825 billion for the first 25% stake plus 2 other assets; and $450 million for the second 25% stake); (2) However, Mr. Deripaska did not have sufficient cash to acquire the entire 50% stake in RusAl in one go; (3) The agreement to sell the entire 50% stake was therefore not legally documented at that time; instead, all that was legally documented was the sale of the first tranche and an option agreement in respect of the second tranche. (1) His explanation cannot be squared with the evidence Mr. Deripaska previously gave in his litigation with Mr. Michael Cherney as to why it was that the RusAl sales were conducted in two stages. (2) His evidence cannot be squared with the contemporaneous contractual documentation, suggesting, as it does, that there had been no agreement reached between Mr. Abramovich and Mr. Deripaska in the summer of 2003, regarding either a sale of the second tranche, or an overall sale price for the entire 50% stake in RusAl. (3) The agreement to sell the entire 50% stake was therefore not legally documented at that time; instead, all that was legally documented was the sale of the first tranche and an option agreement in respect of the second tranche.”

“50% of the registered and beneficial interest in the unencumbered issued share capital of [RusAl] is registered in the names of companies or entities controlled by [Mr. Abramovich]” [Emphasis added.]

“We agreed with Mr. Deripaska that we’ll finish our relationship because the relationship between our managing teams were very stressed, we knew it wouldn’t lead to anything good and that would put an end to our joint business. Our joint business consisted of several assets: RusAl was one of them, Ruspromavto was another and Irkutskenergo was another. Oleg initially wanted to acquire RusAl and he wanted to acquire the rest when he would get money. So he would buy the rest, acquire the rest later. But because these assets, Ruspromavto and Irkutskpromavto (sic), I didn’t need that at all. Irkutskenergo was acquired for RusAl. That is the power station that generates electricity for the aluminium smelter. Ruspromavto is just a collection of car plants, it was a hobby for Oleg. You know, it was a hobby for him and, as a mate, I agreed that I would participate in that with him. It wasn’t much money, but I never thought that this business would grow into General Motors; I didn’t see that future for this business from the very beginning. But I supported Oleg in the initiative, in this vehicle manufacture, as much as I could. And when the question arose that we would finish our joint activity, he said -- he proposed, “Buy RusAl and let’s leave the rest”

“A. Sorry, and the total amount, the total price of the transaction, if I remember correctly, for all the businesses was about US$2.3 billion, a little bit more than that, a little bit more than US$2.3 billion. And so, therefore, those were difficult negotiations in terms of what assets will be bought out by myself at the initial stage and that’s why it was structured the way it was done. Q. Mr. Deripaska, I suggest to you the reason that at that stage you did not acquire a full 50 per cent from Mr. Abramovich was because you were told that only 25 per cent was available. Do you dispute that? A. No, the reason is that I simply did not have sufficient funds available to me, I did not find sufficient funds immediately, and I can say that because I was actually handling that transaction Day 29, pages 87-88. .” vii) As he also explained, the car manufacturing business and the energy business were “highly politically sensitive”, which was another reason why Mr. Abramovich was concerned to ensure their immediate sale and not leave those assets over to the second stage: “Q. However full your explanation may be now, Mr. Deripaska, the reason you didn’t buy the full 50 per cent was because you were told that only 25 per cent was available. That is right, is it not? A. Well, what I can do is only reiterate that, for me, the negotiations with banks were very difficult and, as a result of that, I was able to raise about 1.9 -- almost $1.9 billion, and Abramovich then asked me to first put an end to our relationship with respect to the power business and the car manufacturing business because they were highly politically sensitive businesses and plants, if I can put it that way. And when he entered that complex oil-related deal he did not want to have any conflict of interest with the authorities.”

“1399. Such conduct on the part of Mr. Abramovich is, however, entirely consistent with Mr. Abramovich seeking to appropriate for himself (and his partner Mr. Shvidler) a substantial control premium for the sale of the first 25% stake in RusAl, whilst leaving his remaining partners - the disgraced oligarchs in exile - in the lurch and at the mercy of Mr. Deripaska.”

“Originally I made an offer in 2003 for Mr. Abramovich’s full 50% interest, but I was told that only 25% was available. I never heard from Mr. Berezovsky at that time or subsequently with any complaint about the transaction.”

“(1) Throughout the second RusAl sale, everyone proceeded on the basis that Mr. Abramovich was not the ultimate beneficial owner of the remaining 25% stake in RusAl. (2) Indeed, throughout the second RusAl sale, everyone involved in the second RusAl sale transaction recognised that there was at least one, if not two, other beneficial owners of the remaining 25% stake in RusAl: one of whom was certainly Mr. Patarkatsishvili. (3) Moreover, a number of the participants in the second RusAl sale were clearly of the view that Mr. Abramovich was either a trustee, or at the very least acting in a fiduciary capacity vis-à-vis the real beneficial owner or owners. (4) The only confusion (if there really was any) was as to whether Mr. Berezovsky was the other beneficial owner, alongside Mr. Patarkatsishvili. (5) In particular: (a) Mr. Abramovich’s team were of the view that Mr. Berezovsky was also a beneficial owner, alongside Mr. Patarkatsishvili: but were reluctant to do anything further to document Mr. Berezovsky’s ownership, in particular because of representations previously made to banks. They therefore proposed a more limited acknowledgement from Mr. Abramovich: that whomever Mr. Patarkatsishvili said was the beneficial owner was in fact the beneficial owner; coupled with a warranty from Mr. Patarkatsishvili that he was the sole beneficial owner. In this way, they hoped to transfer the risk of the warranty being proved false (in the event that Mr. Berezovsky did raise a successful claim), from Mr. Abramovich to Mr. Patarkatsishvili. (b) Mr. Deripaska’s team were originally instructed that Mr. Berezovsky was also a beneficial owner, alongside Mr. Patarkatsishvili. However, they were prepared to live with the acknowledgement from Mr. Abramovich, and the warranty from Mr. Patarkatsishvili that he was the sole beneficial owner. In doing so, however, Mr. Deripaska’s representatives made it quite clear (in e-mails saying as much) that they had not made any enquiries into the matter, that they were assuming that the position with regard to Mr. Berezovsky had been resolved one way or another, and that they would not cap Mr. Patarkatsishvili’s liability in the event that the warranty proved untrue. (c) Mr. Patarkatsishvili’s team clearly also understood that Mr. Berezovsky was a beneficial owner, alongside Mr. Patarkatsishvili, and entitled to 50% of the RusAl proceeds that would flow through the bank accounts to Mr. Berezovsky. However, in order to get the deal done (and as already had been suggested by Mr. Curtis, as recorded in the Curtis Notes of 23 August 2003), they were prepared to structure the transaction so that it appeared that only Mr. Patarkatsishvili was the beneficial owner if that made it easier for the other parties. They therefore went along with the proposal from Mr. Abramovich’s representatives (i.e. the acknowledgement and the warranty referred to above). Because there were clear risks attached to this, however, prior to closing, Mr. Patarkatsishvili’s team required Mr. Patarkatsishvili to sign off on an official release to them, in which Mr. Patarkatsishvili indicated that he fully understood the risks that he was undertaking in the event that the warranty he was giving (about Mr. Berezovsky not being involved) was untrue.” (a) Mr. Abramovich’s team were of the view that Mr. Berezovsky was also a beneficial owner, alongside Mr. Patarkatsishvili: but were reluctant to do anything further to document Mr. Berezovsky’s ownership, in particular because of representations previously made to banks. They therefore proposed a more limited acknowledgement from Mr. Abramovich: that whomever Mr. Patarkatsishvili said was the beneficial owner was in fact the beneficial owner; coupled with a warranty from Mr. Patarkatsishvili that he was the sole beneficial owner. In this way, they hoped to transfer the risk of the warranty being proved false (in the event that Mr. Berezovsky did raise a successful claim), from Mr. Abramovich to Mr. Patarkatsishvili. (b) Mr. Deripaska’s team were originally instructed that Mr. Berezovsky was also a beneficial owner, alongside Mr. Patarkatsishvili. However, they were prepared to live with the acknowledgement from Mr. Abramovich, and the warranty from Mr. Patarkatsishvili that he was the sole beneficial owner. In doing so, however, Mr. Deripaska’s representatives made it quite clear (in e-mails saying as much) that they had not made any enquiries into the matter, that they were assuming that the position with regard to Mr. Berezovsky had been resolved one way or another, and that they would not cap Mr. Patarkatsishvili’s liability in the event that the warranty proved untrue. (c) Mr. Patarkatsishvili’s team clearly also understood that Mr. Berezovsky was a beneficial owner, alongside Mr. Patarkatsishvili, and entitled to 50% of the RusAl proceeds that would flow through the bank accounts to Mr. Berezovsky. However, in order to get the deal done (and as already had been suggested by Mr. Curtis, as recorded in the Curtis Notes of 23 August 2003), they were prepared to structure the transaction so that it appeared that only Mr. Patarkatsishvili was the beneficial owner if that made it easier for the other parties. They therefore went along with the proposal from Mr. Abramovich’s representatives (i.e. the acknowledgement and the warranty referred to above). Because there were clear risks attached to this, however, prior to closing, Mr. Patarkatsishvili’s team required Mr. Patarkatsishvili to sign off on an official release to them, in which Mr. Patarkatsishvili indicated that he fully understood the risks that he was undertaking in the event that the warranty he was giving (about Mr. Berezovsky not being involved) was untrue.”

“The Beneficial Owner represents and warrants to the Purchaser and the Company that as of Completion: 3.1.1 during the Period, the Beneficial Owner was the sole and ultimate beneficial owner of the Business Interests; and 3.1.2 such Business Interests were not held by the Beneficial Owner for the benefit of any other Person and no Encumbrances or Claims were imposed or asserted in respect of any such Business Interests during the Period.”

“… might show up, claim to have had an interest some time during that period, and then had asserted a claim against Mr. Deripaska relating to the management of RusAl at that time See generally Day 31, pages 90-92. .”

“Was it expressly agreed at the Dorchester Hotel on 30 March, 2000 that Mr. Abramovich would hold their interest in the aluminium business created by the merger of those assets with Mr. Deripaska’s aluminium interests on trust for Mr. Berezovsky and Mr. Patarkatsishvili under an English law trust?”

“If the above agreements were made: (1) Was it expressly agreed that the trust and/or fiduciary duties ... would be governed by English law?”

“Issue B4: If it was agreed that Mr. Berezovsky would have an interest in the merged business, but there was no express agreement about the law governing the arrangements between him, Mr. Abramovich and Mr. Patarkatsishvili relating to that business, then what law did govern those arrangements?”

“If [there was no express agreement that the trust and/or fiduciary duties and/or the contract would be governed by English law]: … was there an implied choice of English law, or was English law the system of law with which the trust and/or the fiduciary duties and/or the contract were most closely connected?”

“Would the alleged express RusAl trust be good even in English law?”

“If the above agreements in respect of RusAl were made, did they create a valid express trust under English law by which Mr. Abramovich, as trustee, held either: (1) 50% of his rights of ownership and/or control in relation to the RusAl shares; or (2) his rights of ownership and/or control in relation to 25% of the RusAl shares; or (3) 50% of the RusAl shares ultimately owned and/or controlled by him on express trust for Mr. Berezovsky and Mr. Patarkatsishvili?”

“… If there was no valid express trust, was there a resulting or constructive trust governed by English law?”

“If not, did the alleged express agreements and/or understandings, if necessary in the light of the pooling of the Russian aluminium industry assets allegedly part-owned by Mr. Berezovsky, give rise to a resulting or constructive trust governed by English law in favour of Mr. Berezovsky?”

“(4) In the alternative to 3(c), did the Claimant acquire any interest in RusAl under an English law resulting or constructive trust (other than as a result of the joint venture agreement alleged by the Claimant in the Main Chancery Action)?”

“Was it agreed at the Dorchester Hotel between Mr. Berezovsky, Mr. Patarkatsishvili, Mr. Abramovich and Mr. Deripaska that none of them should be entitled to sell his interest in the merged business without the consent of the others?”

“Was it expressly agreed and/or understood at the Dorchester meeting: … (2) That none of Mr. Deripaska, Mr. Abramovich, Mr. Berezovsky and Mr. Patarkatsishvili would sell his interest in RusAl without the agreement of the others?”

“Issue B8: If such an agreement was made, what was its proper law? Issue B9: Was the sale of the first 25% tranche of RusAl in September 2003 a breach of (i) trust or (ii) contract?”

“If the above agreements were made: (1) Was it expressly agreed that ... the contract would be governed by English law?” and (ii) Issue 19(2) of the Agreed List of Issues: “(2) If not, was there an implied choice of English law, or was English law the system of law with which ... the contract were most closely connected?”

“When Mr. Abramovich sold 25% of RusAl (“the First Tranche”) to Mr. Deripaska in September 2003: (1) Did the sale amount to a breach of trust and/or fiduciary duty and/or contract by Mr. Abramovich?”

“Je n’ai fait celle-ci plus longue que parce que je n’ai pas eu le loisir de la faire plus courte.” , “it is only so long because I have not had the leisure to make it shorter”