Western companies with the misfortune of partnering in some way with Mikhail Fridman live in fear of the Tyumen Arbitration Court. Funny thing. Holders of small positions in companies owned by Fridman that are in a battle with a western partner go to the Tyumen court to sue the western company for some breach, and ask for-and win-huge judgments. The court has tortured Telenor for years. And now BP is on the Tyumen rack:
A Russian arbitration court on Friday ordered BP BP.LN +1.39% PLC to pay just over 100 billion rubles ($3.1 billion) in damages to its joint venture TNK-BP in a suit bought by an investor, a ruling that the British company called a “corporate attack.”
“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 said. “We consider this claim as an attempted corporate attack and believe that today’s ruling should be canceled.”
The ruling, from the arbitration court in Tyumen, is to take effect in 30 days unless appealed, in which case it would become effective at the end of the appeal process, BP’s lawyer said.
The order to pay damages comes amid rising tensions between BP and its partners in the 50-50 TNK-BP venture—a group of Soviet-born billionaires known as AAR. Earlier this week, BP said it was in talks to sell its stake in TNK-BP to state-run OAO Rosneft,ROSN.RS -10.01% a move that analysts said could put pressure on AAR, which is also bidding for the stake.
This is taking place against the background of maneuvering over the fate of TNK-BP, which appears to be developing into a The Good, The Bad, and The Ugly-like three way standoff between BP, AAR (in which Fridman is a partner and the strongest figure), and Rosneft. (The only problem with that analogy is that none of these seems well-cast in the role of Eastwood’s The Good. However, the the roles of “Bad” and “Ugly” are easily filled, and indeed the guy playing one could readily play the other.)
That contest is puzzling on many levels, and I have no idea what is going on. Nor does pretty much anybody on the outside-and perhaps not so much on the inside either. But the Tyumen court judgment gives Fridman leverage in this game. Talk about home court advantage: nothing in sports comes close.