Oleg Deripaska broke promises in Moscow land dispute, court told

Russian metals tycoon Oleg Deripaska “deliberately” breached legal undertakings and should be found in contempt of court, London’s High Court was told on Thursday.

Lawyers for British-based Vladimir Chernukhin, the husband of a Conservative party donor and former deputy finance minister under Vladimir Putin, claimed Deripaska had breached a promise to Chernukhin in 2018 to preserve shares in a legal dispute over land in Moscow.

They asked the High Court to find Deripaska in contempt of court, which is punishable by a prison sentence of up to two years or a fine.

Deripaska, who founded metals group En+ and is the subject of US and UK sanctions because of his purported close links to the Kremlin, denies breaching the undertakings and is defending the case.

The High Court heard that in 2018 Chernukhin, whose wife Lubov is a Tory party donor, had sought legal undertakings from Deripaska over a parcel of En+ shares to give him assurance that the metals tycoon had sufficient assets in the UK to pay a potential $95mn legal award from the Moscow land court case. The $95mn award has since been paid in full.

Chernukhin sought the undertakings after the US government hit Deripaska and En+ with sanctions. This caused a drop in the value of En+ and prompted fears that the metals tycoon would move his assets to Russia out of reach of the English courts, the High Court heard on Thursday.

Jonathan Crow KC, acting for Chernukhin, told the High Court that “there was a considerable level of animosity” between his client and Deripaska. Crow claimed there had been concerns in 2018 that Deripaska would transfer his assets back to Russia as he enjoyed “status in the Russian Federation which would make enforcement [of the legal award ] against him difficult or impossible”.

The oligarch is one of the few prominent members of the Russian elite to have spoken out against Vladimir Putin’s invasion of Ukraine, though his criticism has been guarded and has not criticised the Russian president directly.

Earlier this month, Deripaska warned an audience that Russia could run out of money by 2024 if it did not find new investment to replace the western companies forced out of the country by sanctions.

But Deripaska’s criticism has earned him a reprimand from the Kremlin and weakened his position in the elite, according to people familiar with the matter. Earlier this year, a powerful school run by a close associate of Putin seized a $1bn Black Sea hotel complex and marina from Deripaska after he lost a court battle last year.

However, the High Court heard that months after the undertakings were given by Deripaska, En+ was relocated from Jersey to Moscow as part of an action plan drawn up by its British chair Lord Barker, who resigned from the company in March last year, to get US sanctions lifted on En+. Under the plan, Deripaska also resigned as a director and sold down his controlling stake.

Deripaska testified in his defence this week by video link from Moscow and denied that he had breached the undertakings. The metals tycoon said that after he resigned as a director of En+ in May 2018, he had “no relation to the business of that company” and “trusted the management and Lord Barker” to form a plan to rescue En+. He agreed there had been “a massive decline” in his wealth owing to the US sanctions.

In cross-examination, Deripaska repeatedly denied claims that he was “not telling the truth” about his knowledge of preparations of the relocation of En+ to Russia.

On Thursday, Thomas Grant KC, representing Deripaska, told the High Court that his client had treated the legal undertakings “with respect and care”.

In his written arguments, Grant claimed that Deripaska did not commit the alleged breaches of the undertakings. “Strictly in the alternative, and if he did commit a breach, Mr Deripaska had no awareness of that. He certainly did not intend to commit a breach of the undertakings,” Grant said.

Grant alleged that Chernukhin “knew of the proposal for EN+ to redomicile from Jersey to Russia” and argued that every step of the En+ transfer had been “heavily publicised”.

The judge is set to rule on the committal application in the coming weeks.