Siberian court awards $3 billion damages against BP
MOSCOW (Reuters) - A Siberian court has awarded more than $3 billion in damages against British oil major BP in a suit brought by minority shareholders in its $60 billion Russian venture TNK-BP, the plaintiffs' lawyer said on Friday.
The setback for BP comes as the company continues to talk to potential buyers of its share of TNK-BP. BP formed the 50-50 joint venture with AAR, a consortium representing four Russian tycoons, nearly a decade ago to tap in to the country's vast energy reserves.
The Tyumen arbitration court awarded 100 billion roubles ($3.1 billion) in damages in the case brought by a group who own shares in TNK-BP's listed subsidiary TNK-BP Holding.
The case, which concerned BP's failed attempt last year to partner with state oil company Rosneft, was brought by the minority shareholders on behalf of TNK-BP, meaning that BP will have to pay the damages to TNK-BP.
The sum awarded is about a third of the amount that the minority shareholders were seeking. They originally wanted $12.5 billion in damages, but that was later cut to $8.8 billion.
"Yes, I can confirm that we won," Dmitry Chepurenko, of law firm Liniya Prava, told Reuters from Tyumen after the court ruling.
"Parent companies should be held accountable for their wrongful acts causing losses to subsidiaries, and our case is a confirmation of this fact," Chepurenko added in a statement.
BP said that it would appeal against the decision, which it described as unjustified.
"We will challenge today's ruling in accordance with the procedure established by the law, and expect that the court of appeal will adopt a reasonable and fair decision," BP lawyer Konstantin Lukoyanov said in a statement.
"All the plaintiff's arguments are based on absurd assumptions and are not related to either the company's interests or the interests of its shareholders," BP said.
The case was originally brought last year, thrown out in November but reopened amid renewed hostilities between TNK-BP's co-owners. Those hostilities escalated after BP announced last month that it would seek to sell its stake in Russia's third-largest oil company.
The minorities, led by Andrey Prokhorov, had claimed that TNK-BP suffered financial losses when it was excluded last year from a proposed exploration alliance between BP and Rosneft.
The AAR billionaires, who deny any connection to the case brought by the minority shareholders, are seeking a separate arbitration ruling under UK law that would enable them to sue BP for damages in the international courts over the failed Rosneft deal.
Represented through the AAR consortium, the tycoons argue that the BP-Rosneft alliance violated the TNK-BP shareholders' agreement, which stipulates that BP should do business in Russia via TNK-BP.
The written justification of Friday's court decision will be made public within five working days, Chepurenko said. "The court has made a decision that is in absolute accordance with the law, and we are satisfied with it," he added.
A source familiar with the matter said there may be another minority suit filed within the next couple of weeks, regarding BP directors' vote against the Rospan project at a board meeting last week. TNK-BP accused its co-owner of failing to support the gas project this week.
Several scenarios are possible for TNK-BP, with either BP or the AAR quartet - Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik - selling their stakes. State oil company Rosneft also threw its hat into the ring this week.
On Friday TNK-BP reported a 63 percent fall in second-quarter profit.
(Additional reporting and writing by Megan Davies; Editing by David Goodman)
- Tweet this
- Share this
- Digg this
- UPDATE 3-Avalanche kills at least 12 guides in deadliest incident on Mount Everest
- UPDATE 10-Vice-principal of South Korea school in ferry disaster commits suicide
- Mediterranean diet may slow diabetes progression
- UPDATE 5-U.S. further delays final decision on Keystone XL pipeline
- India passes halfway mark in election with BJP gaining strength