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Court tosses Russian racketeering case



By Upstream staff 

Photo by Erik Means


A US judge has thrown out a long-running lawsuit accusing Russian financier Mikhail Fridman and others of a racketeering and money laundering scheme aimed at taking control of a large part of the Russian oil industry.

US District Judge Laura Taylor Swain, in a written ruling issued today, said the lawsuit filed by Canada's Norex Petroleum could not proceed against Alfa Group, owned by Fridman, and the other defendants, including US industrialist Len Blavatnik and Russian billionaire Viktor Vekselberg.

Norex did not show that the alleged activity took place in the US and therefore the claims should not be heard in a US court, the judge said in the ruling, Reuters reported.

Norex, in its lawsuit, had claimed the defendants illegally took control of its majority stake in Russian oil company Yugraneft Corp through fraud and bribery of Russian government officials. Norex sought damages of at least $1.5 billion.

The suit also accused the defendants of illegal takeovers of other Russian oil companies, including Tyumen Oil Company, known as TNK. The scheme was funded through hundreds of millions of dollars wired through banks in the US, Norex contended.

TNK is now part of TNK-BP, co-owned by BP Plc (BP.L: Quote, Profile, Research). It is Russia's third-largest oil company.

The lawsuit was originally filed in US District Court in New York in February 2002. It was dismissed two years later, but reinstated by a federal appeals court. Norex then filed an amended version in December 2005, naming additional defendants including BP.

Judge Swain said in her ruling Norex could not refile the case, finding that the company "failed to sustain its burden of demonstrating the existence of subject matter jurisdiction and that granting leave to file a further amended complaint would be futile."

Bruce Marks, an attorney for Norex, said the company was disappointed with the ruling and would appeal. He said a number of the defendants were American and that the alleged scheme was carried out in the US.

"We think the US courts plainly have jurisdiction over Americans who use the United States as a base for a worldwide racketeering scheme," he said.


Tuesday, 25 September, 2007, 21:18 GMT  | last updated: Tuesday, 25 September, 2007, 21:18 GMT

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