Russia court rejects $16 billion claim against BP

AP News
Posted: Nov 11, 2011 1:46 PM
Russia court rejects $16 billion claim against BP

A Russian court on Friday rejected a $16 billion claim against BP PLC filed by an obscure minority shareholder in BP's Russian venture, TNK-BP.

The court victory may have softened the blow that BP sustained when Rosneft dropped it as a partner in developing Russia's untapped Arctic oil and gas riches. The multibillion dollar deal broke down after TNK-BP's Russian billionaire shareholders blocked it, claiming that BP should be pursuing it through TNK-BP.

The Arbitration Court in the Tyumen region in Siberia on Friday dismissed two motions filed by a group of minority shareholders led by Andrei Prokhorov, who owns 0.0000106 percent in TNK-BP. The lawsuits are a $13 billion claim against BP and a $2.8 billion suit against two BP-nominated directors on TNK-BP's board.

Prokhorov and other shareholders claimed that BP and its representatives damaged TNK-BP's interests by failing to include the Russian venture in the Arctic deal with Rosneft.

BP's Russian partners in TNK-BP have denied any connection to the minority shareholder's suit. The claim was the reason why Russian police raided BP's office in August, which happened just days after Rosneft teamed up with ExxonMobil to develop the Arctic.

BP's Moscow office argued in an emailed statement that the lawsuit has no merit and said it is pleased with the ruling. Jeremy Huck, the president of BP Russia, said: "Today's decision is a positive contribution to the investment climate in Russia."

But lawyers for the minority shareholders vowed to appeal the ruling.

Dmitry Chepurenko, an attorney for the plaintiff, said in a statement that the court ruled against the shareholders because they had failed to gather the 1 percent of shares required for a valid lawsuit against members of a board.

"These court proceedings have showed Russia still has a long way to go to meet international standards in corporate law," Chepurenko said. Lawyers also complained that they had been given less than two hours to present their case in the $13 billion claim.

The Fitch Ratings agency warned last month that the lawsuit could be damaging for BP's credit rating.