Three of Ukraine's wealthiest businessmen have settled a $2bn dispute over a privatised iron ore mine on the eve of trial at London's High Court, with an unconfirmed payment of $500mn, news reports said.

Victor Pinchuk, son-in-law of former Ukrainian president Leonid Kuchma, filed a case in 2013 asserting his ownership of KZhRK against businessman Gennadiy Bogolyubov and Ihor Kolomoisky, a billionaire former regional governor of Ukraine.

A last-minute confidential settlement was agreed on January 22, before the scheduled start of the eight-week trial on January 25, with both sides represented by some of Britain's leading law firms, the Financial Times reported.

Ukraine's Ukrainskaya Pravda news portal reported that under the confidential settlement, Kolomoisky agreed to pay $500mn to Pinchuk in installments, unnamed sources in both camps said.

The case, centred on KZhRK, part of a Ukrainian state-owned conglomerate known as Ukrrudprom that was sold off in 2004, threatened to set a precedent for disputes over further assets. It would also have given a glimpse into the murky business environment of the time, when many of the country's wealthiest businessmen made their fortunes.

Pinchuk claimed the defendants held in trust a controlling stake in the mine via an offshore company, for which he paid $143mn, alleging that Bogolyubov and Kolomoisky reneged on the mainly spoken agreement. The two men say there was no such agreement.

This was the latest major lawsuit brought by billionaire businessmen from republics of the former Soviet Union and seeking to fight their legal battles in London as a neutral, independent judicial centre.

Many previous instances involved fights between oligarchs who snatched up prime state assets at rock bottom prices in the turbulent privatisation era of the 2000s.

The late Kremlin critic Boris Berezovsky in 2012 lost a $6.5bn lawsuit he brought against Roman Abramovich, the owner of Chelsea football club, over former state assets. This prompted other warring sides to settle disputes just before trial.

Another prominent case in 2012 saw the last-minute settlement between the main owner of the UC Rusal, Oleg Deripaska, and his former business associate Michael Cherney, in a case concerning a $1bn stake in the world’s biggest aluminium producer.