International oil giant BP was smarting yesterday from a Siberian court order to shell out $3.1 billion in damages for its failed Arctic oil exploration tie-up with the state giant Rosneft.
TNK-BP office in Tyumen, Western Siberia. Picture: The Siberian Times
The UK company reacted with fury claiming the verdict in Tyumen amounted to a 'corporate attack', and announcing an appeal.
At issue was alleged damages caused by BP seeking a tie-up with Rosneft to which other shareholders at its Russian joint venture TNK-BP objected.
BP's Russian partners AAR successfully blocked the Arctic deal in the European court of arbitration, arguing that BP had an obligation to offer TNK-BP priority rights to any operations it would like to conduct in Russia and Ukraine.
Ahead of the verdict, minority shareholder Andrei Prokhorov had argued TNK-BP suffered badly from BP's attempt to seek a joint venture with Rosneft in the Arctic.
He denied he was acting as a front man for the four tycoon shareholders behind AAR.
The scale of the court defeat seemed to stun BP.
'This court ruling seriously damages the Russian court system's reputation and proves its inability to defend honest investors against illegal corporate attacks,' blasted BP lawyer Konstantin Lukoyanov.
'All of the plaintiff's claim are based on absurd assumptions that have nothing in common with the interests of TNK-BP or its shareholders.'
To make matters more complex, the AAR shareholders are bidding for a slice of BP's stake in TNK-BP, but so is Russian oil giant Rosneft.
BP's spokesman in Russia, Vladimir Buyanov, said: 'We consider this ruling unfair. We expect a court of appeals to make a well-founded and fair verdict.'
The decision came in a week when prime minister Dmitry Medvedev had stressed the need to attract foreign investment.
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