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BP decision in Russia a shame, lawyer says

Nov. 14, 2011 at 11:18 AM
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MOSCOW, Nov. 14 (UPI) -- A ruling in favor of BP in a Siberian court shows the Russian legal system is still far behind the rest of the world in terms of corporate law, a lawyer said.

BP won a pair of legal victories in a Siberian court against TNK-BP, the British company's joint venture and third-largest oil company in Russia.

Andrey Prokhorov, a minority shareholder in TNK-BP, couldn't prove the joint venture lost $13.4 billion in profits following the collapse of a proposed deal between BP and Russian oil company Rosneft in January, Bloomberg News reports.

A proposed January deal between BP and Rosneft for work in the arctic collapsed after TNK-BP said the proposal violated terms of its shareholder agreement with BP. Rosneft later landed a similar deal with U.S. supermajor Exxon Mobil.

Prokhorov couldn't get enough support to go ahead with a $2.8 billion claim against the BP directors on the TNK-BP board. He owns a tiny fraction of 1 percent in TNK-BP.

BP described the claims filed by TNK-BP as "absurd." The British company had its Moscow offices raided during the summer in connection with the complaints. Both sides have a stormy past reaching back to at least 2008 when BP Chief Executive Bob Dudley, then serving as head of TNK-BP, was chased out of Moscow.

"This legal process showed Russia has a long way to go to match international standards of corporate law," Prokhorov's lawyer, Dmitry Chepurenko, was quoted as saying. "Minority shareholders, who are on the weak side in corporate disputes, can't defend their rights after they've been breached."

Prokhorov is said to be appealing the decisions.

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