The Virtues of the Courts: A Window into How Former Soviet Dealmaking Really Happens

When it comes to the Caspian era in the history of oil, it has required the intervention of New York courts and prosecutors to understand the intricacies of how the huge deals happened. In the just-concluded trial of high-end handbag-maker Rick Bourke, we heard evidence of the alleged payoff demands of the late Azerbaijan President Heydar Aliyev. And in the still-to-be-tried bribery case of New York businessman James Giffen, we have pages of detailed federal allegations of payoffs to Kazakhstan President Nursultan Nazarbayev, the cash coming from America's largest oil companies.

Though Central Asia and the Caucasus clearly didn't have a monopoly on official avarice, Russia has remained largely a subject of pub and law firm-conference room talk. Until now.

In two, side-by-side cases being heard on the third floor in London's Royal Courts of Justice, four of Russia's richest former and current billionaire oligarchs are battling over billions of dollars in claims against one another.

The personalities run the 18-year arc of post-Soviet history: Boris Berezovsky, who was instrumental in both Boris Yeltsin's and Vladimir Putin's political careers before falling out and fleeing to England; Roman Abramovich, Berezovsky's successor as Russia's premier oligarch, who had his own frictions in Russia and now lives in London, where he owns the Chelsea soccer team; Oleg Deripaska, Abramovich's successor as the king of Russian oligarchs, who is trying now to keep his empire from falling apart in the global financial crisis; and Michael Cherney, the toppled metals giant who preceded all of them before fleeing to Israel.

The subject of both suits is the 2001 merger of the joint metals empires belonging to Cherney and Deripaska (Sibal), and Berezovsky and Abramovich (Sibneft). The resulting concern is Rusal, the world's second-largest aluminum company.

The kernel of both suits is that Berezovsky and Cherney want more money. In their separate responses, Deripaska and Abramovich claim the two don't merit any.

As with the Caspian, however, the cases appear likely to open up first-hand testimony on how the innards of Russia really work. They include allegations of "illegal acts by senior officials at the center of government" in Russia, including by Prime Minister Vladimir Putin, according to a Financial Times piece today by Michael Peel and Andrew Jack. Jack spills out details specifically of the Berezovsky case in a companion on-line piece.