Dispute with NoreX and BP
Alfa Group's legal disputes with BP date back to 1991, when the Canadian oil company Norex represented a newly formed, Russian-Canadian joint venture in Siberia's oil industry, operating the marginal Chernogor oil-fields close to Khanty-Mansijsk. With the Russian company Chernogorneft, the Canadian company entered into a 60% ownership in the joint-venture Yugraneft. Later on, NoreX increased their stake to 97,64%, and in September 1998 Chernogorneft was filed with bankruptcy by the Tyumen Oil Company (TNK). The arbitration court of Khanty-Mansinsk proclaimed for Chernegorneft a new chief executive officer, with a background from Alfa Group.[25] The main owner of Chernogorneft was BP, via their holding company Sidanko.
TNK gained control over 60% of Chernogorneft's debts, and the debt of US$35 million held by EBRD was reduced to US$9 million by Khanty-Mansijsk arbitration court on 30 July 1999. Thereby, TNK controlled 60% of the debt claims, and according to NoreX the Alfa Group took over Chernogorneft's oil sales below market prices.[25] Resulting in a forced sell-out of the company, Sidanko (BP) was rejected from taking part in auctions, and remaining bidders were legally restrained from offering more than US$200 million for Chernegorneft - a mere fifth of its assumed value. On 26 November 1999, TNK took over all of Chernorogneft for US$172 million.
Letters of protest from prime minister Tony Blair to president Vladimir Putin helped little, the legally BP-owned company was forcibly sold to TNK below market price. TNK also got approval from the Khanty-Mansijsk arbitration court to take over Chernogorneft's stakes in two joint ventures, in spite of protests from venture partners Norex and Occidental Petroleum. BP fought on for years to retrieve its rightful ownership in Chernogorneft, and in August 2001 this got its first legal approval.
In 2000, according to NoreX, TNK started to undermine Yugraneft's oil transports through the national semi-monopolistic pipeline system Transneft. On 11 April and 26 June 2001, TNK again got two legal victories in the Khanty-Mansijsk arbitration court, first through a reversal of earlier regulation regarding Chernogorneft's stock capital in the joint-venture, and thereafter through a nullification of the voting powers in 497,142 out of the 600,000 shares held by NoreX. At an extraordinary annual assembly of Yugraneft on 28 June, NoreX' candidate for the CEO position was elected, but the day after TNK's security executive and 20 heavily armed guards appeared at the Yugraneft office with a false annual assembly protocol, installing Mr. A. Berman as CEO of Yugraneft. In June 2001, Yugraneft's owner Alex Rotzang contended that two British Virgin Islands shell companies Quenon investments limited and Shapburg limited which are closely associated with Mikhail Fridman and Alfa Group illegally gained control of Yugraneft through an armed seizure of Yugraneft's offices.[26][27][28] In 1998, both Quenon and Shapburg formed the Luxembourg based Compagnie Financiere pour l'Atlantique du Nord which changed its name to Gaumur Holding in March 2000 and was entirely controlled by the Baugur Group of Iceland.[29] Both Shapburg limited and the Gibraltar based AB Holdings limited, which is owned by Mikhail Fridman, co-founded the Alfa Bank subsidiary Alfa finance holdings SA based in Luxembourg.
The year after, BP and Alfa Group merged all their oil and gas interests into a 50/50 joint venture, in spite of BP's legal and financial losses in the Yugraneft disputes since 1999. The new venture controlled both Sidanko og TNK from 11 February 2003.[32] The merger implied that NoreX' stake of 97% in Yugraneft come under control of Alfa Group and BP. NoreX, thereby, saw their possessions dwindle and transferred partly to BP,[33] and appealed for copies of BP documents before a US court.[34] Jones Day represented its client Alfa-Access-Renova (AAR) of Len Blavatnik, Mikhail Fridman, and Viktor Vekselberg in United States court. In 2004 the U.S. Supreme Court sustained Norex' right to appeal, but at a lower level the legal dispute went on for years, with only gradual victories for NoreX.[35]
For a summary of the battle of control over TNK, BP, see: TNK-BP.
