Norex Petroleum Asks N.Y. Court to Reinstate Blavatnik Suit

May 06, 2014 5:23 pm ET

(Updates with defense in third paragraph.)

May 6 (Bloomberg) -- Norex Petroleum Ltd. asked New York’s highest court to reinstate a $1 billion lawsuit in which billionaires Leonard Blavatnik and Victor Vekselberg are accused of using gunmen and corrupt court proceedings to steal a controlling stake in a Siberian oil field.

Norex claims Blavatnik, Vekselberg and others illegally took control of ZAO Yugraneft, a company which was valued at $500 million and owns an oil field in western Siberia. Norex sued in New York state court in March 2011 after a federal judge threw out the suit. New York State Supreme Court Justice Eileen Bransten in September 2012 also dismissed the lawsuit, ruling it was filed too late.

Norex is forum shopping after having failed in previous lawsuits, said Owen C. Pell, an attorney representing Blavatnik and the other defendants.

Blavatnik is the world’s 46th-richest man with a net worth of $16.7 billion, according to the Bloomberg Billionaires Index. His former college classmate, Vekselberg, ranks 64th with a net worth of $15 billion.

Fatigue-wearing militiamen armed with AK-47 assault rifles stormed Yugraneft’s corporate offices in June 2001, acting on Blavatnik’s, Vekselberg’s and others’ orders and took control of the company, according to the lawsuit.

The two billionaires bribed Russian officials to influence a lawsuit in that country that sought to reduce Norex’s 60 percent stake in Yugraneft, according to the complaint. A Russian court in 2002 cut Norex’s stake to 20 percent.

Company Sale

Norex, a Cypriot company with an office in Calgary, also accused BP Plc and its partners of profiting from the scheme at its expense. OAO Rosneft, Russia’s largest oil producer, in March 2013 bought TNK-BP, the joint venture between BP and the billionaires that controls Yugraneft, for $55 billion.

Barry R. Ostrager, an attorney with Simpson Thacher & Bartlett LLP representing Norex, urged the New York Court of Appeals today to reinstate the lawsuit, saying the original claim was filed in U.S. district court in 2002, within a month of the alleged activity.

“The plaintiff had every right to initiate the case in federal court,” Ostrager said. “It was timely under any statute of limitations whether it was the Alberta statute of limitations, the New York statute of limitations or any statute of limitations.”

Pell, with White & Case LLP, told the court today the claims have already been litigated in Russia and that the plaintiffs are hunting for a court that will be favorable to their case.

“They chose Russia and they lost, then they came to New York, they decided to go to federal court instead of state court,” Pell said. “This is clearly a forum shopping case.”

The case is Norex Petroleum Ltd. v. Blavatnik, 650591/2011, New York State Supreme Court, New York County (Manhattan).