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A sanctioned Russian billionaire has filed a bankruptcy petition in London against a former associate over legal costs stemming from a dispute about a stake worth hundreds of millions of dollars in one of the world’s largest fertiliser producers.
Andrey Guryev has brought the bankruptcy action against Alexander Gorbachev, who unsuccessfully sued Guryev last year over claims that he reneged on a verbal promise — made partly in a sauna and on the street outside a pub — to grant him a substantial interest in PhosAgro.
Gorbachev, who is no relation of the late Soviet leader Mikhail Gorbachev, lost the lawsuit after a High Court judge in September found there were “unexplained and unexplainable inconsistencies” in his claims.
He was ordered to pay Guryev’s legal costs, amounting to £12mn. Gorbachev had litigation insurance in place for £10mn, according to a court order in October, leaving a shortfall of £2mn.
The court order added that Guryev had to apply to the Office of Financial Sanctions Implementation, an arm of the UK Treasury, for a licence “to permit the receipt by him of the sums payable”.
Legal records show Guryev filed a bankruptcy petition — an application for assets to be taken and sold to pay debts — at the High Court in December against Gorbachev, who attended an initial hearing in central London this week.
Daniel Cashman, the barrister representing Guryev, told the court that his client was owed monies “in the millions” arising from Gorbachev’s failed court action.
James Culverwell, the barrister for Gorbachev, said that the bankruptcy petition was being contested. The proceedings were adjourned to a later date.
The dispute over the stake in PhosAgro was one of several clashes between Russian businessmen in London’s courts over contested ownership of businesses created in the buccaneering era that followed the collapse of the Soviet Union.
Gorbachev was a longtime senior manager at PhosAgro but fled Russia to claim asylum in the UK in 2004. He claimed he was entitled to 25 per cent of Guryev’s shares in the fertiliser business, estimated to be worth several hundred million dollars.
In support of the lawsuit, Gorbachev cited conversations he and Guryev purportedly had around London years ago, including in a sauna, outside a pub and in restaurants.
Guryev said that Gorbachev’s assertions had “no factual basis” and described the legal proceedings as a “shakedown”.
A six-week trial was heard last year, in which Judge Mark Pelling KC travelled to Dubai to hear Guryev’s testimony given sanctions imposed on the billionaire.
In his ruling, the judge found that there were “simply too many unexplained and unexplainable inconsistencies and inherent implausibilities” in Gorbachev’s claims. Gorbachev said at the time that the judgment was “extremely disappointing”.
