Russia: BP Wins Cases Against Minority TNK-BP Shareholders
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Tuesday, 15 November 2011 |
BP has won a significant legal victory as a Siberian court rejected lawsuits from Andrey Prokhorov and other minority investors in TNK-BP worth 496bn rubles. The suits, filed in the wake of a failed alliance with state firm Rosneft, claimed that the collapse of the deal resulted in lost profits worth 409bn rubles, and pursued 87bn rubles in damages from BP’s directors on the TNK-BP board.
Prokhorov, who owns 0.0000106% of TNK-BP, has said he will appeal the decision. Despite the imminent appeal, Andy Moody, Senior Associate at international law firm Eversheds, said the decision was clearly positive news for the firm.
“It will be interesting to read the Court’s reasons once they are released to see if there is any basis for an appeal. BP will be hoping this legal attack is over in order that it may focus its attention on its international arbitration dispute with the AAR consortium, its fellow shareholders in TNK-BP,” he noted.
"This decision may also be good news for Russia’s continuing efforts to improve the reputation of its legal system. If possible, the preference of international investors is to choose international arbitration over resolving disputes in the Russian courts. A victory for BP may also be seen as a small victory in the battle to improve the reputation in the West of Russian justice and the Russian courts. Ultimately, Russia needs to continue to improve the reputation of its courts if it wishes to attract foreign investment,” added Moody.
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