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New York Supreme Court Filing
Norex Filing in Support of its Billion Dollar Suit Against BP and Russian Oligarchs
Newly Discovered BP Documents Demonstrate that BP was Aware of and Complicit with Illegal Conduct by Russian Oligarchs
Norex Contacts
Chronology of Events
DATE DESCRIPTION
1998-1999 BP was a victim of TNKs takeover of its Sidanko units subsidiaries Chernogorneft and Kondpetroleum through ordered bankruptcy. BP provides report to CIA.
2001
  • Defendants engaged in a scheme to strip Norex of its controlling interest in Yugraneft. This scheme began with the same forced bankruptcy that victimized BP as a stakeholder in Chernogorneft (through its interest in Sidanko) in 1998/1999 because Chernogorneft was also Norexs joint venture partner in Yugraneft. Defendants used the fraudulent bankruptcy of Chernogorneft to, among other things, get a foothold in Yugraneft (as a minority 40% shareholder), which in 2001 they upped to a controlling 80% interest through a manifestly corrupted court case in a Tyumen court in Western Siberia, described by the Russian Federal Bankruptcy Service Director at the time, Georgi Tal, as the legal department of TNK. Tal was later gunned down in the streets of Moscow. In 2001, under cover of the corrupted default judgment (Norex wasnt even served in the case), TNK stormed Yugranefts corporate office and took control over its oil field.
  • Even though it had been victimized by TNK, BP then seeks to recoup its losses and pave the way for future Russian investments, responding to TNKs theft of Chernogorneft and Kondpetroleum by doubling down on its investment. BP agreed to up its stake in Sidanko, by then controlled by TNK, from 10% to 25% in return for TNK returning Chernogorneft to Sidanko, and agreeing to later buy a 25% stake in TNK. (In 2003, BP expanded its planned 25% investment in TNK into a full 50-50 joint venture, which became TNK-BP.) TNK-BP received TNKs oil and gas assets, including its stake in Yugraneft that it knew was stolen from Norex, a Cypriot company with an office in Calgary, Canada. BP was aware, when it entered the joint venture, of TNKs reputation and tactics, applied to Chernogorneft, Yugraneft, and other takeover targets.
February 2002
  • Norex brings civil claims under RICO seeking $1.5 billion in treble damages in U.S. District Court in New York City alleging that a group of American citizens and U.S.-based companies Access Industries, Inc., Renova, Inc. Alfa Group, the Crown companies - engaged in a scheme to take over Norexs Yugraneft oil production unit. Defendants move to dismiss. Norex Petroleum v. Access Industries, 02-cv 1499, U.S. District Court, Southern District of New York (Manhattan).
  • Internal BP emails recently obtained by Norex as part of the discovery process show that BP executives knowingly joined the corrupt agreement to divest Norex of its ownership interest in and profits from Yugraneft. Indeed, from the beginning of its involvement with TNK, BP had first-hand knowledge of the AAR/TNK defendants wrongdoing vis--vis Norex. BP knew that the formation of TNK-BP, funded through BPs contribution of more than $6.5 billion, would prejudice Norex. At this time, BP determined that its official response to Norexs very long running battle with the notorious TNK and its even more notorious senior executive, German Khan, should be that it had nothing to do with us, BPs Sam Bennett emailed to others within BP on Feb. 27, 2002.
  • Bennett also acknowledged internally that BPs own history was intertwined with the events that befell Norex dat[ing] back to the good (bad) old days. In fact, the record now shows that BP was so concerned about Norexs meritorious claims against TNK, and the AAR/TNK Defendants were so eager to bring BP into their conspiracy, that AAR/TNK expressly agreed in TNK-BPs formation documents to indemnify BP for any losses incurred as a result of the Norex RICO litigation. In sum, at this time, the evidence shows that BP understood that in exchange for its purchase of 50% of TNK, BP would share in the profits from the valuable Chernogorneft oil assets, including those generated by Yugranefts lucrative oil field that had been stolen from Norex.
June 2002 The Moscow office of Norex was subjected to an illegal search by Russian government agents in connection with fabricated criminal charges against Yugraneft and the officers of Norex.
July 2003 Norex files opposition to defendants motion to dismiss the RICO complaint including proof of profit diversion, money laundering and tax evasion claims. February 2004 The New York federal court decides to dismiss Norexs claims against the defendants on the ground that New York is an inconvenient forum for Norexs claims. Norex appeals.
July 2005 The U.S. Court of Appeals for the second circuit vacated the initial judgment that granted dismissal of the action on grounds of forum non conveniens. The appellate court unanimously reverses the District Judge and reinstates Norex's claims. The appellate court rejects the defendants' attempts to dismiss Norex's claims at this time. The appeals court rules that Russia is not an adequate alternate forum for Norexs claims, that the district court did not give proper deference to Norexs choice to sue in New York, and that Norex can challenge the validity of a Russian default judgment entered against it in a Western Siberian court.
December 2005 Norex files amended complaint to U.S. District Court for the Southern District. Norex added BP as a defendant and made additional claims. The defendants asked the district court to dismiss Norex's claims.
September 2007 The ruling by the same U.S. District Judge again was to dismiss in favor of the defendants for lack of subject matter jurisdiction over Norexs claims. Norex appealed.
January August 2008 BP runs afoul of TNK when it seeks greater control over the TNK-BP joint venture.
August 2008 Forced expulsion of Robert Dudley, TNK-BPs then CEO (now BPs CEO) from Russia. TNK wanted TNK-BP to do business with unsavory counterparts, including Cuba, Iran and North Korea, which Dudley opposed, and which would have created public relations and perhaps legal problems for BP. TNK ultimately strong-armed Dudley out.

A leaked US Embassy evaluation, reported by the Telegraph, discussed BPs concerns:
  • According to a western TNK-BP official, the raids should be seen as the latest in this multi-year attempt to drive out or scare away the foreign managers of the company, which made nearly $9 billion in profits last year. [TNK senior executive German] Khan has traditionally led the charge to get rid of the western managers who have brought to the company western business practices such as accountable corporate governance, transparency, and fiscal discipline. In particular, senior western TNK-BP executives have pointed to the company's procurement as a sore point for Khan and to a lesser extent the other billionaires. TNK-BP spends several billion dollars a year on equipment and supplies. The BP half of TNK-BP has been able to limit directed purchases and kick-backs, much to the chagrin of some of their business partners.
TNK arranged for most of the expats visas not to be renewed, including Dudleys, forcing them to leave Russia. As part of this struggle for control of TNK-BP, Law firms representing BP were raided by police.
September 2010 A U.S. Appeals Court in Manhattan upheld the dismissal, citing a June ruling by the U.S. Supreme Court that limits the reach of civil claims for certain federal statutory violations occurring outside the U.S. Based on this Supreme Court decision, the Second Circuit overruled its RICO precedents and affirmed the dismissal of Norexs RICO claims without reaching the merits, holding that RICO has no extraterritorial application.
January 2011 BP announced a huge Arctic exploration deal with Rosneft. TNK blocked the deal, claiming that BP could invest in Russia only through TNK-BP.
March 2011
  • Norex now files new civil claims in New York State Supreme Court seeking to recover $500 million in damages arising out of the theft of Yugraneft by Defendants Leonard Blavatnik and Victor Vekselbergmulti-billionaire Russian expatriates who are New York residents.
  • Defendants Blavatnik and Vekselberg are, respectively, the owners of Defendants Access Industries, Inc. (Access) and Renova, Inc. (Renova), both of which are companies organized under the laws of New York and whose principal places of business are in New York.
  • Defendant Alfa systematically and continuously does business in New York, and together with Access and Renova, wholly owns Defendant TNK.
  • Defendants Blavatnik and Vekselberg both sat on TNKs board at all times relevant to this lawsuit.
  • Defendant BP is a multinational corporation that does significant business in New York and directs public and investor relations from its New York office. BP is the largest non-U.S. company that trades on the New York Stock Exchange.
  • Finally, Defendant Kukes, the former President and CEO of TNK, is an American citizen who incontestably maintained his domicile in New York City with his family at the time this case originally commenced. Defendants Blavatnik, Vekselberg, Access, Renova and BP do not dispute that they are subject to personal jurisdiction in this Court. Defendants move to dismiss.
May 2011 A suit Tyumen initiated by a minority shareholder (with TNKs approval and likely at its prompting), claimed billions of dollars in damages against BP. The minority shareholder suit was followed by widely reported official raids on BPs Moscow office to seize documents in support of the lawsuit. A source close to BP told the Wall Street Journal that the suit had no merit but such suits often proceed in Russian courts, particularly if they have powerful local sponsors. BP prevailed on British Prime Minister David Cameron to speak publicly about Russian corruption and to discuss the raids directly with Russian President Medvedev.
May 2011 TNK thwarts BPs deal with Rosneft. The deal with Rosneft valued TNK-BP at more than $62 billion, increasing the valuation of Yugraneft, still an important part of TNK-BPs asset class.
June 2011 Norex amends its complaint to allege damages in access of $1 billion and streamlines its complaint.
October 26, 2011 Plaintiff Norex Petroleum Limited (Norex) by its attorneys, Simpson Thacher & Bartlett LLP, respectfully submits an Omnibus Memorandum of Law, together with the Affidavit of Barry R. Ostrager dated October 26, 2011 (Ostrager Aff.), in Opposition to Defendants Joint Motion to Dismiss; BP p.l.c.s (BP) Motion to Dismiss; Alfa Group Consortiums (Alfa) Motion to Dismiss; OAO Tyumen Oil Company (TNK) and TNK-BP Limiteds (TNK-BP) Motion to Dismiss; and Simon Kukes Motion to Dismiss. Norex also submits the expert affidavits of Bernard Black (Black Aff.), William Butler (Butler Aff.), Peter Maggs (Maggs Aff.), and Peter J.M. Lown, Q.C. (Lown Aff.) in opposition to Defendants motions to dismiss and these affidavits are referenced in appropriate places in this Omnibus Memorandum of Law.
September 17, 2012 Trial court enters Decision and Order dismissing case on statute of limitations grounds.
November 5, 2012 Norex files appeal in New Yorks Appellate Division - First Department.