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By John Helmer, Moscow

That Boris Berezovsky (image upper right) is a self-delusional liar is no news, particularly not in Moscow.

That Justice Dame Elizabeth Gloster (image lower right) should have made this point the crux of her August 31 judgement, dismissing Berezovsky’s claims against Roman Abramovich (lower left), should come as a surprise only to those who for a decade have promoted and protected Berezovsky’s claims to political power in Russia, business acumen, wealth, and superior intelligence; that is, a succession of British prime ministers starting with Tony Blair, and the Anglo-American media, led by the Guardian of London.

Since Friday’s judgement came down, link, there is a corollary which the British government and the London media appear to be missing. If everything Berezovsky once touched turned into gold, from a Russian regime-changing perspective, is there anything left now which isn’t dross?

According to Gloster’s judgement, Berezovsky is “an inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes. At times the evidence which he gave was deliberately dishonest; sometimes he was clearly making his evidence up as he went along in response to the perceived difficulty in answering the questions in a manner consistent with his case; at other times, I gained the impression that he was not necessarily being deliberately dishonest, but had deluded himself into believing his own version of events.”

The judge went on: “[Berezovsky] departed from his own previous oral evidence, sometimes within minutes of having given it. When the evidence presented problems, Mr. Berezovsky simply changed his case so as to dovetail it in with the new facts, as best he could. He repeatedly sought to distance himself from statements in pleadings and in witness statements which he had signed or approved, blaming the ‘interpretation’ of his lawyers as if this somehow diminished his personal responsibility for accounts of the facts , which must have been derived from him and which he had verified as his own.”

If this is now the accepted western wisdom, how many of the claims published about Berezovsky’s employee, Alexander Litvinenko, and around Berezovsky’s allegations about what and who caused Litvinenko’s polonium-poisoning death in London in November 2006 are inventions “moulded to suit his current purposes”?

Does the Gloster judgement apply in retrospect to Berezovsky’s claims that he was the standard bearer for rescuing Boris Yeltsin from election defeat by the communists in 1996? Going forward, does the judgement disqualify Berezovsky for the political mission the British services have assigned him of discrediting Vladimir Putin and rescuing Russia from him?

“What can I say?” Putin said on December 15, after testimony had wound up in Gloster’s courtroom, “It would be better if they held this trial in Russia. [Question: Would Russian gain from this economically?] This would be more honest – both for them and our country. The money was made and stolen here – let them divide it here, too.”

Kremlin officials close to him have been saying privately that they are not unhappy that the detailed history of the Russian resource privatizations and oligarch fortunes should be presented in the UK courts, where what is said and judged is more likely to be believed by Russians than if the same history were to be presented in the Russian courts.

There was a moment during the Gloster trial when this issue was debated by two academic historians of modern Russia, one hired by Berezovsky, one by Abramovich, to provide the judge with expert opinion on what had happened to keep Boris Yeltsin and his cronies in power. The historian witnesses couldn’t agree with one another.

Oxford University historian Robert Service attacked Stephen Fortescue, an Australian, for depending on weak evidence published in the Russian press from the participants, rather than on direct accounting or contract evidence of the type of transactions Berezovsky and Abramovich conducted with each other. Here is Service’s testimony on December 2, 2011:

“My position is that we do not know the precise details of the business transactions that we’re talking about here.
“MRS JUSTICE GLOSTER: That’s your main point?
“That is my main basic point, and that these general statements about what actually happened in each of the loans-for-share deals aren’t yet convincing because what documentation is available is too slim.”

According to Service, “I’m asked to give evidence here as a historian, I don’t accept anybody’s word, just because they say that something happened, without the kind of evidence to back it that does not come from the person who is saying it. So there has to be a sort of — in a perfect world, there has to be a multiplicity of sources to corroborate anything as having happened or not having happened… I would just add the reservation that the statements by big businessmen in Russia in the 1990s about what they did or did not do are riddled with cases of falsification, obfuscation and the rest of it. One has to be very, very careful about accepting anything from any of them.” The evidence for the business history of Russia in the 1990s, he concluded, “is just not in yet.”

Gloster followed Service’s warning; but her judgement is not the first to rule on a case of major significance in Russian business history. Equally important are the judgements of Justice Christopher Clarke on Michael Cherney v Oleg Deripaska in 2007, supported by the Court of Appeal; and the two judgements of Justice Andrew Smith against the state shipping company Sovcomflot and its chief executive, Sergei Frank, in December 2010 and March 2011.

Expert and media analysis in Russia and abroad of the conclusions in those cases has been minimal. The previous cost record of $140 million for a Russia-related litigation in the UK High Court was the case of Tajikistan Aluminium Plant (TadAZ, Talco) which Deripaska and United Company Rusal, among others, lost between 2005 and 2008. It is all but forgotten now.

What then is the significance of Gloster’s judgement, at least that part which she has already released? The short answer is that she did not rule on a significant issue of fact, historical or commercial, except for her disbelief of Berezovsky’s claims to have struck agreements on asset ownership and profit share with Abramovich. The reason, she spelled out, is that there was no other evidence on which she felt confident in relying. So far she has ignored saying what she judges of the credibility of most of the witnesses called by Berezovsky and Abramovich.

This doesn’t let Deripaska, one of Abramovich’s witnesses, off the hook, now that he is on trial before Justice Smith on Cherney’s claims to the shares in Rusal which Deripaska and Abramovich accumulated between them. Gloster is simply passing the buck to her fellow judge. Counsel for Cherney and Deripaska gave their opening statements in July; witness testimony and cross-examination begin in the High Court on September 27.

The evidence in that case is very different. So too is the evidence to be presented in the case against Deripaska being pursued by Rusal minority shareholder, Victor Vekselberg, in the London Court of International Arbitration.

In the Berezovsky case, according to Gloster, there was no reliable written or documentary evidence she could accept to corroborate what Berezovsky or Abramovich had to say. “Significantly there were no contemporaneous notes, memoranda or other documents recording the making of these alleged agreements or referring to their terms. Such documents as were relied upon by Mr. Berezovsky as circumstantial evidence supporting his case, were usually (but not invariably) considerably later in origin than the alleged agreements; not documents that were communicated to Mr. Abramovich or his representatives; and were documents which were open to various interpretations as to whether they were supportive of Mr. Berezovsky’s case.”

Such oral evidence as was presented, Gloster ruled, is “extremely stale…Apart from the fact that, not surprisingly, it is often difficult for witnesses to remember what happened many years ago, and they can rarely be expected to remember the specific words which they used, witnesses can easily persuade themselves that their recollection of what happened is the correct one.”

That left the judge with a predicament. “The lapse of time and staleness of the claims also gave rise to the inevitable problem that the court did not have before it all the evidence which it might otherwise have done, had the dispute been resolved nearer the time that the alleged oral agreements had been made, rather than 16 years after they were alleged to have been concluded.”

According to one leading UK lawyer specializing in Russian litigation, “my interpretation is that she had to come down on one side or the other – that’s her job – and she did so decisively. [That] makes an appeal much more difficult!” The Court of Appeal has already made clear in the Cherney v Deripaska proceedings, as well as in the Sovcomflot case and others, that it is reluctant to second-guess a High Court trial judge on the presentation and interpretation of evidence.

Gloster has played to that gallery by including this insurance premium against being overturned on appeal: “the burden of proof was on Mr. Berezovsky to establish his claims. As the only witness, on his side, who could give direct oral evidence of the making of the alleged agreements or the alleged threats, the evidential burden on him was substantial. Ultimately, it was for Mr. Berezovsky to convince the court, on the balance of probabilities, that the alleged oral agreements and threats had indeed been made, not for Mr. Abramovich to convince the court otherwise… in the event this case fell to be decided almost exclusively on the facts; very few issues of law were involved. Because of the nature of the factual issues, the case was one where, in the ultimate analysis, the court had to decide whether to believe Mr. Berezovsky or Mr. Abramovich. It was not the type of case where the court was able to accept one party’s evidence in relation to one set of issues and the other party’s evidence in relation to another set of issues.”

During the witness testimony, Abramovich made a great many claims which were unbelievable. Gloster has not ruled that she believes them. What she has done instead is to say that on the claims presented, Berezovsky wasn’t believable.

She could have gone further. Had Gloster ruled that the evidence from all sides, whatever its substantiation, constituted evidence of crimes under UK law, she could have called a pox on all the claimants in court, ruling that whatever agreements had been agreed or disputed between Berezovsky and Abramovich, they were criminal conspiracies to corrupt government officials, procure a false election outcome, extort and defraud asset owners, launder the proceeds to avoid tax, deceive UK banking authorities, file false affidavits, etc. But then the judge would have been adjudicating on the facts – something the ruling she has now issued avoids doing.

Had Gloster done that, it is certain that both Berezovsky and Abramovich would have had legal grounds for appealing and perhaps overturning Gloster’s ruling in the higher court. With a single pistol shot—to Berezovsky’s head – Gloster has avoided the heavy cannons the Court of Appeal would have rolled out.

Berezovsky all but invited the head shot, according to Bruce S. Marks, a leading US lawyer with a record of litigating against the Russian oligarchs. “[Justice Gloster] concluded Berezovsky was a liar and thus deferred to Abramovich on all disputed issues of fact. This is likely an example of poor lawyering by Berezovky’s attorneys unless he was completely out of their control. One must repeatedly prepare Russian witnesses for testimony and not allow them to think they will get away with it if they try lie, because they get caught in the end. Pleasing your client may get you to trial, but it does not get you through trial.”

During his appearance in the witness box, Professor Service warned the judge “the statements by big businessmen in Russia in the 1990s about what they did or did not do are riddled with cases of falsification, obfuscation and the rest of it. One has to be very, very careful about accepting anything from any of them.” So what is to be understood from Gloster’s judgement that Abramovich was “a truthful, and on the whole reliable, witness”?

This is as narrow as the judgement against Berezovsky is broad. That’s because Gloster is not ruling on what happened in the privatization of the Sibneft oil company in 1995-1996 or the forced sale of the aluminium smelters which turned up in the Rusal conglomeration between 2001 and 2004.

The Sibneft arrangement, Gloster says, “was one which, by its very nature, might have caused Mr. Berezovsky and Mr. Patarkatsishvili to have regarded themselves, in the vernacular, as having, or being entitled to “a piece of the Sibneft action” or to have “owned” Mr Abramovich. That, in a very loose sense, was the nature of the deal with Mr. Abramovich, and the nature of many payments under so-called patronage or “protection” arrangements. But that does not translate into the complicated contractual agreements for which Mr. Berezovsky contended. Having rejected Mr. Berezovsky’s case, I do not need to decide what the precise terms of the arrangement between the three men were.”

As far as Berezovsky’s claim to a stake in Rusal, the judgement issued on Friday finds there was no “contractually binding agreement between the two men.” Instead, the judge appears to have misunderstood the Russian term “krysha”, ruling that while Abramovich hadn’t threatened Berezovsky with state sanctions, Berezovsky had extorted Abramovich with reciprocal threats. According to Gloster, “the relationship between Mr. Berezovsky and Mr. Abramovich was based upon a protection, or krysha, type relationship.”

There is one finding of fact of Gloster’s which has political, as well as historical significance; this is the one regarding Berezovsky’s campaign against on Putin: “I accept Mr. [Alexander] Voloshin’s [former chief of the presidential staff under Yeltsin and Putin] evidence that no such threats were made, either by him or President Putin at such meetings. I likewise accept Mr. Abramovich’s evidence that no such threats were made by him.” This has yet to be spotted by the Anglo-American commentaries.

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