MOSCOW, April 10 - RAPSI, Sergei Feklyunin. Russian billionaire Viktor Vekselberg's Sual Partners launched arbitration proceedings against EN+, Glencore, UC Rusal (Jersey) and its major shareholder Oleg Deripaska.
A source close to Rusal’s shareholders said earlier that the lawsuit filed on April 4 with the London's Court of International Arbitration stemmed from a dispute about the wrongful approval and conclusion of long-term aluminum and alumina supply contracts between Rusal and Glencore (holds 8.75 percent of shares in Rusal). The contracts were worth over $47 billion.
Sual Partners (possesses a 15.8 percent stake in Rusal) has to prove the transaction between the Rusal aluminum giant and Glencore was not concluded on an arm’s length basis to win the lawsuit, Noerr law firm partner Ilya Rachkov told the Russian Legal Information Agency (RAPSI).
“The court may find a formal breach of the shareholders agreement insufficient to satisfy the lawsuit,” Rachkov said. “The plaintiff must prove that it sustained losses as a result of the conclusion of the transaction between Rusal and Glencore, meaning, for instance, that it was not concluded on an arms’ length basis.”
If Rusal shareholders were obliged to agree upon certain company operations under the shareholders agreement, CEO required preliminary consent from the general shareholders meeting, according to Rachkov.
However, if the deal was based on fair market principles, the shareholders incurred no losses and the chances to win the action are vague.
If Rusal is able to prove the fairness of the contracts, Rachkov added, a formal violation such as the absence of preliminary shareholder approval will be insufficient for securing a favorable award.
The court may recognize the formal breach, “but this will only bring moral satisfaction, as the plaintiff probably seeks to invalidate the transactions and recover damages.”
Meanwhile, Vladimir Bublikov, the head of the RKT Arbitration Practice Department, said “this dispute is strategically important for Veklselberg as it gives Sual Partners an extra negotiating lever in the corporate conflict with Deripaska.”
“Vekselberg’s company is most probably tired of the non-stop corporate conflict over Norilsk Nickel and this is why Sual Partners launched the litigation in London – to gain profit from the sale of Norilsk Nickel shares,” he said.
However, Konstantin Trapaidze, the president of the Your Attorney-at-Law law firm, added that “Vekselberg is able to block the execution of the contracts for at least some time and have them declared null and void and obtain compensation if he wins the case.”
At the same time, Rustam Kurmayev, a dispute resolution partner at Goltsblat BLP, holds that the London's Court of International Arbitration is unlikely to consider the dispute soon “given its clear complexity and assuming that each party will do its best to prove its position.”
If the court is convinced that the plaintiff’s rights were violated, it will most likely order the collection of damages and penalties for the breach of the current arrangements, Kyrmayev stressed.
Rusal has stated that the disputed transactions were concluded at prices above the market average. The plaintiff will find it difficult to prove its losses from the contracts, the lawyer said.
At the same time, Alexander Ivanov, a partner at Yukov, Khrenov & Partners law firm, declined to comment on the litigation prospects.
“It is impossible to discuss the prospects without reading the shareholders agreement,” he said.