Legal Business Blogs

White & Case to act for Russian government in $12bn Pugachev arbitration

White & Case has won a lucrative instruction to defend the Russian government on the $12bn arbitration case taken against it by Sergei Pugachev, a tycoon once dubbed ‘Putin’s banker.’

Founder of Moscow-headquartered Mezhprombank, Pugachev took the decision to sue Russia when his business empire was carved up after falling out of favour with the country’s president Vladimir Putin. He alleges that government investigations against the bank were constructed because of ‘political motivations’.

Russia will be represented in the $12bn arbitration, filed in September 2015, by a team at White & Case fielded by London and Moscow partner David Goldberg (pictured). The case is filed at the Permanent Court of Arbitration in The Hague, the Netherlands on the basis of the France-Russia bilateral investment treaty.

Lazareff Le Bars is currently acting as counsel to Pugachev with partner Benoit Le Bars acting as lead counsel, having taken over from King & Spalding earlier this year.

Pugachev, who struck up a close friendship with Putin during his early years as president, was accused of embezzlement and fraud by Russian authorities and later fled to London after Mezhprombank collapsed.

An English court has since ordered Pugachev to give up his Russian and French passports and remain in the UK while the Russian government’s Deposit Insurance Agency case against him continues. Pugachev, who lives in Battersea with his socialite partner Alexandra Tolstoy, a descendent of the novelist Leo Tolstoy, has had his assets frozen.

Russian courts ruled that Pugachev along with several others should be held liable for the insolvency of Mezhprombank. They were ordered to pay nearly 75.6bn rubles in damages and Russia’s Supreme Court upheld the ruling in January this year.

Fried, Frank, Harris, Shriver & Jacobson was acting for Pugachev in litigation brought in the English courts by the Deposit Insurance Agency but stopped after Pugachev could no longer pay for the work. The DIA was represented by Hogan Lovells with a team led by partner Michael Roberts.