AAR gets Russian on BP again with $13.6bn court claim

By bne IntelliNews June 6, 2012

bne -

Things have gotten ugly quickly in the TNK-BP divorce. The love between the Anglo-Russian couple was lost very quickly following their marriage in 2003, but after BP's announcement on June 1 that it had been approached by a buyer for its stake, there were hopes it could end in an amicable separation. Yet things took a wrong turn on June 4 after a Siberian court overturned previous rulings in favour BP, a decision that could result in the British major being liable to $13.6bn in claims from its Russian partners in the Access-Alfa-Renova (AAR) consortium.

The claim was brought by AAR in the wake of BP's attempt to do a deal with state-owned oil major Rosneft last year behind its Russian partners' backs, in contravention of the TNK-BP shareholder agreement. AAR claims that they are entitled to the money as compensation for BP's failure to close the share swap deal - a breakdown that AAR played no small part in bringing about.

The current run-in started in May when the joint venture's Russian chief executive, oligarch Mikhail Fridman, resigned after saying the firm had become unmanageable because of disputes, in a move widely seen as an attempt to force BP out of the joint venture.

Russian oligarchs are past masters at churning regional court decisions and can produce them at will. This one suggests that the members of AAR are once again upset and intend to make life as difficult as possible for BP if it tries to exit.

The claim was actually brought by a group of no-name shareholders that own a fraction of 1% of TNK-BP, yet feel they have suffered so much from BP's poor deal-making ability that they are entitled to several billions of dollars in compensation. A judge in the Siberian district of Tyumen dropped the case in November and the shareholders' appeal had been turned down earlier this year - but hey presto! Here it is again at an extremely sensitive time for BP and opportune time for AAR. The billionaire tycoons behind AAR have denied any connection with these minority shareholders or their claims.

Whatever the motives of the court, this week's Siberian court decision is in effect a gun that AAR can hold to BP's head and make it impossible for the British oil major to sell to anyone other than AAR. The Russian consortium said earlier in the week that it was interested in buying BP out of its 50% share of the joint venture, while both Rosneft and Gazprom have publicly said they were not interested in the stake, despite media speculation to the contrary.

The Federal West-Siberian Commercial Court on June 4 overturned two previous court rulings that had thrown out the lawsuit. The previous rulings had rejected the claim by the minority shareholders that their interests were infringed by BP's failed Arctic shelf development deal with Rosneft, as TNK-BP could have participated in the projects.

BP has denied causing any damage to AAR and said the court decision could be the result of "corporate news", business daily Kommersant reported on June 5. BP lawyer Konstantin Lukoyanov said the court's latest decision could damage Russia's investment climate. The judgment "casts doubt on the ability of the domestic judicial system to create a predictable and effective legal environment," he said.

Dmitry Chepurenko, a lawyer representing the interests of the TNK-BP minority shareholders, said he was satisfied with the court's decision, as "the case has been sent for a new hearing."

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss