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Dismissal of TNK-BP shareholder's $8.7 billion dispute with BP upheld

15:04 03/07/2013

MOSCOW, July 3 (RAPSI) - The Eighth Commercial Court of Appeals in the Siberian city of Omsk has upheld the dismissal of a lawsuit initiated by Andrei Prokhorov, a TNK-BP minority shareholder, to recover 288 billion rubles (circa $8.7 billion), a court spokesperson told RAPSI on Wednesday.

The court has thereby rejected the appeals filed by Rosneft and BP Russian Investment Limited (BPRI).

Andrei Prokhorov sued BP Russian Investment Limited (BPRI) and BP p.l.c. for 288 billion rubles in damages, a sum equal to the losses which TNK-BP Holding allegedly incurred from a transaction which failed to take place between BP and Rosneft.

On August 7, 2012, the Tyumen Region Commercial Court of Appeals granted part of Prokhorov's claim by ordering the defendants to pay ТНК-BP Holding 100.4 billion rubles ($3.2 billion).

Rosneft, Russia's largest state oil company, appealed the January 28 ruling of the Eighth Commercial Court of Appeals which dismissed the case after Prokhorov filed a motion on December 3, 2012 to withdraw the lawsuit. Attorney Dmitry Chepurenko declined to give the reasons for his client's decision.

However, the defendants were not satisfied that the case was merely dismissed. "Considering that the plaintiff himself has realized the futility and absurdity of his claim, we expect the appeals court to confirm the lack of grounds for the lawsuit," the defendants' lawyer, Konstantin Lukoyanov, said commenting on the ruling.

According to Prokhorov, BP p.l.c., as the parent company of BPRI, and BPRI, as a shareholder of TNK-BP Limited, forced the TNK-BP Limited board of directors to reject a proposal by TNK-BP Holding to form a strategic partnership with Rosneft and to purchase its shares. The plaintiff claims that TNK-BP Holding incurred substantial losses as a result of that decision.

In January 2011, Rosneft and BP agreed on a share swap to allow them to explore in the Russian Arctic, in which the Russian company was to get 5% of BP's ordinary shares in exchange for 9.5% of Rosneft shares. But the transaction was blocked by the lawsuit initiated by AAR Consortium, which represents the interests of TNK-BP's Russian shareholders. In June 2011, negotiations on the transaction ceased.

Rosneft bought TNK-BP last year, paying $27.73 billion to AAR for its half of Russia's third-largest crude producer. BP received $12.48 billion in cash, including a $700 million dividend paid out in December after the deal was struck, plus an 18.5% Rosneft stake which lifts its holding in the state crude producer to 19.75%.

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Dismissal of TNK-BP shareholder's $8.7 billion dispute with BP upheld

15:04 03/07/2013 The Eighth Commercial Court of Appeals in the Siberian city of Omsk has upheld the dismissal of a lawsuit initiated by Andrei Prokhorov, a TNK-BP minority shareholder, to recover 288 billion rubles (circa $8.7 billion).
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