Putin ally will have another chance to see business rival jailed

Billionaire Putin ally will have another chance to see business rival jailed for ‘court order breach’ after Appeal judges rule legal action was more than just ‘revenge’ amid long-running feud over ownership of Moscow factory

  • Vladimir Chernukhin was involved in a legal battle with Oleg Deripaska
  • In 2017 he received an award of around 95 million US dollars from Mr Deripaska
  • In June 2020, Mr Justice Andrew Baker dismissed Mr Chernukhin’s application to commit Mr Deripaska to prison for contempt of court
  • But three Court of Appeal judges overturned this decision in a ruling on Tuesday 
  • A Vladimir Putin ally’s bid to jail a rival Russian oligarch for allegedly breaching a court order must return to the High Court, the Court of Appeal has ruled.

    Oleg Deripaska has been involved in a long-running legal battle with Vladimir Chernukhin, a Russian former deputy finance minister in the early 2000s, over the ownership of an ‘extremely valuable’ site in central Moscow.

    Mr Deripaska has been the subject of US sanctions and was cited in a US senate intelligence Committee report for his close links to the Russian state and Russian intelligence services – though he has always denied wrongdoing. 

    In July 2017, Mr Chernukhin received an award of around $95million (£71million) from Mr Deripaska, leading to an asset freezing order of £87.5 million in 2018.

    However, Mr Chernukhin previously claimed Mr Deripaska deliberately put millions of his shares in aluminium and power giant EN+ Group ‘beyond the reach’ of the English courts.

    At a hearing last year, the former minister claimed Mr Deripaska arranged for EN+ to be ‘redomiciled’ from Jersey to Russia in breach of an undertaking to the court to preserve his EN+ shares, which were then said to be worth around £190 million.

    In June 2020, Mr Justice Andrew Baker dismissed Mr Chernukhin’s application to commit Mr Deripaska to prison for contempt of court, ruling that it was motivated by an ‘act of revenge’ and was an abuse of process.

    However, three Court of Appeal judges overturned this decision in a ruling on Tuesday.

    Vladimir Chernukhin arriving at the High Court

    Oleg Deripaska, leaving court

    Vladimir Chernukhin, left, and Oleg Deripaska, right. Mr Chernukhin, a Russian former deputy finance minister in the early 2000s, had previously claimed Mr Deripaska deliberately put millions of his shares in aluminium and power giant EN+ Group ‘beyond the reach’ of the English courts

    The row centred on a former textile factory in Moscow (pictured), worth millions to developers

    The row centred on a former textile factory in Moscow (pictured), worth millions to developers

    At a hearing last month, lawyers for Mr Chernukhin argued that Mr Justice Andrew Baker’s decision was based on a ‘fundamental misunderstanding’ of the consequences of Mr Deripaska’s actions which had made his previous undertakings ‘worthless’.

    They also said Mr Deripaska’s breach of the undertakings had caused ‘significant losses’, including legal costs of around £1 million in multiple jurisdictions.

    Lady Justice Carr, sitting with Lady Justice Asplin and Lord Justice Snowden, said that while the High Court judge ‘clearly thought very carefully about how best to proceed and worked long and hard to dispose of the matters before him fairly and efficiently’, he had erred.

    Oligarch Oleg Deripaska, pictured with Russian president Vladimir Putin in Nizhny Novgorod

    Oligarch Oleg Deripaska, pictured with Russian president Vladimir Putin in Nizhny Novgorod 

    Chernukhin is the husband of Russian socialite Lubov, 48, who is seen here outside court

    Chernukhin is the husband of Russian socialite Lubov, 48, who is seen here outside court

    She continued: ‘The judge failed to appreciate that the appellants’ concerns, which the undertakings were designed to address, were not so much as to the commercial value of Mr Deripaska’s interest in EN+ Jersey, or his wealth more generally, but rather as to the appellants’ ability to enforce the award directly and readily against his assets outside Russia.’

    Lady Justice Carr concluded: ‘He erred in treating Mr Chernukhin’s subjective motive, which he found to be revenge, for Mr Deripaska’s past failure to drop his private prosecution against Mr Chernukhin, and personal animosity as a ground for striking out the contempt application.’

    The case will now return to the High Court for a further hearing, the three judges ruled.

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