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A Russian oligarch and a British publisher walk into an Australian court

Lawyers and bankers in London have been warned by the British prime minister not to defend the wealth and reputations of Russian oligarchs who have ties to Vladimir Putin’s government.
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The war in Ukraine has led to soul searching about how Russian oligarchs have built cosy relationships with institutions around the world.

Lawyers and bankers in London have been warned by the British prime minister not to defend the wealth and reputations of Russian oligarchs who have ties to Vladimir Putin’s government.

And one of those oligarchs actually has a connection to Australia as well, last year Roman Abramovich launched legal action in NSW.

Today, journalist for The Saturday Paper Kieran Pender on why a Russian oligarch launched a lawsuit in an Australian court. 


Guest: Lawyer and contributor to The Saturday Paper, Kieran Pender.

Read Transcript

[Theme Music Starts]

RUBY:
From Schwartz Media I’m Ruby Jones this is 7am.

The war in Ukraine has led to soul searching about how Russian oligarchs have built cosy relationships with institutions around the world.

Lawyers and bankers in London have been warned by the British Prime Minister not to defend the wealth and reputations of Russian oligarchs who have ties to Vladimir Putin’s government.

And one of those oligarchs actually has a connection to Australia as well. Last year Roman Abramovich launched legal action in NSW.

Today, journalist for The Saturday Paper Kieran Pender on why a Russian oligarch launched a lawsuit in an Australian court. 

It’s Wednesday May 4 

[Theme Music Ends]

RUBY:
Kieran, this story is about Roman Abramovich. Could you start by telling me a bit about him, his early life, who he is? 

KIERAN:
Sure. So Roman Abramovich is a really rich Russian. And he's best known, I think, for two things. One, his close relationship with Russian President Vladimir Putin. And two, for his ownership of Chelsea Football Club in the UK. So we know a few details about Abramovich's early life. He was born in southwest Russia, a few hundred miles from the border with Ukraine. He was orphaned when he was very young, very sadly, and he was raised by relatives. 

He in a rare interview with The Guardian, he said, To tell the truth, I cannot call my childhood bad. In your childhood, you can't compare things. One eats carrots, one eats candy. Both taste good. As a child, you cannot tell the difference. But it sounds like he did have an underprivileged childhood. But as an adult, he quickly amassed a vast fortune. 

Archival Tape -- UK Reporter:
“Roman Abramovich is a Russian billionaire. His wealth dates back to the collapse of the Soviet Union, a time when new Russian companies assumed state assets.”

KIERAN:
He was involved as the Soviet Union split up. He was one of the oligarchs who accrued money and political power fighting for control of industry as deregulation and privatisation took place. 

Archival Tape -- Reporter:
“The idea was simple persuade the Russian government to combine some of the vast state oil facilities, create a giant new company and then sell it off.”

KIERAN:
He was involved in the aluminium wars, which was very sort of a tense time in Russian business and politics. He said in an interview that every few days someone was being murdered. But ultimately, Abramovich did well out of all this. 

Archival Tape -- Reporter:
“Today his net worth is valued at $12.3 billion by Forbes, and his fleet of yachts is world famous.” 

KIERAN:
He accrued a vast wealth. He spent that on Chelsea Football Club, 

Archival Tape -- Abramovich:
“If I feel we need to buy any particular player to get the results we want, I'll just spend my money.” 

KIERAN:
on properties all around the world..

Archival Tape -- Reporter:
“It's close to Chelsea football club and it cost him 30 million pounds.”

KIERAN:
and became very influential. 

Archival Tape -- Reporter:
“He also owns two yachts and a Boeing seven, eight, seven Dreamliner reputed to be the most expensive private jet in the world.”

RUBY:
And so what does someone like Abramovich What's his connection to Australia? This orphan turned oligarch? 

KIERAN:
So at first glance, not very much. But last year Roman Abramovich launched a lawsuit in Australia. He alleged that a book that had been published by HarperCollins called Putin's People Had defamed him.

Now, I've done a lot of reporting in Russia. I have an interest in Russian politics. And so this caught my eye sort of went went under the radar a bit, didn't get a lot of media traction here. But I thought it was really interesting and unusual that a Russian oligarch was suing a British journalist in Australia. 

RUBY:
Right! So can you tell me about the book that was published by HarperCollins - ‘Putin’s People’? What does it say about Abramavich, how does he say that it defames him?

KIERAN:
So a very distinguished British journalist, Catherine Belton. She was based in Russia for a long time. 

Archival Tape -- Catherine Belton:
“you know, it was a bit of a different era. Most oligarchs, most of the billionaires in some shape or form wanted to be in the pages of the F.T.” 

KIERAN:
She'd written for the Financial Times, Reuters, The Washington Post. She published this book, Putin's People. 

Archival Tape -- Catherine Belton:
“We had the ability to cultivate relationships with many of the Yeltsin era billionaires, for instance, and with some of those around Putin, including senior government ministers and those who'd served in the Kremlin administration.” 

KIERAN:
And in it, it looked at how the KGB and Putin and Russian oligarchs had really accumulated power and wealth. 

Archival Tape -- Catherine Belton:
“What in fact was happening was the Kremlin had cowed the Yeltsin era billionaires and was taking command ever more cash flow until it sort of reached the degree where it has all this kind of hundreds of billions of dollars stashed away in offshore havens.”

KIERAN:
And it alleged that Russian oligarch Roman Abramovich had close connections to Putin and had accumulated power and wealth in connection with that relationship.

And so in this lawsuit that Abramovich filed, Kennedy's, an international law firm acting for him, argued that those were defamatory imputations. So they claimed that, for example, the book imputed that Abramovich had a corrupt relationship with Putin, was acting as his cashier and custodian of slush funds, had covertly provided Putin with access to his fortune, and even that he had acquired English football powerhouse Chelsea at Putin's secret direction in order and I quote, to infiltrate, manipulate and corrupt the British elite. So Abramovich strongly denied all that said that that was false. And more to the point, said that it was defamatory. 

RUBY:
Hmm. Okay. And so I suppose the very obvious question and the one that must have struck you when you saw this is why is this case being launched in Australia if we're talking about a British author whose writing about a Russian oligarch?

KIERAN:
Yes. The answer to that is twofold. Firstly, it's not the only place that legal action was launched in relation to this book. 

The Federal Court proceedings in Australia were brought effectively in parallel with the defamation case that Abramovich lodged against HarperCollins, the publisher and Belton, the author in London. 

And indeed, Abramovich was not even the only Russian oligarch to sue in relation to this book in early 2021, within a period of just two months. Five separate defamation claims were lodged in London by different Russian oligarchs and a Russian oil giant, the company Rosneft. 

And then there was this claim in Australia. So Abramovitch and his lawyers in their court pleadings allege that he had a reputation in Australia as the owner of Chelsea Football Club, that he was, you know, well known in Australia because of that. But certainly seemed a bit unusual.

RUBY:
Right so Abramavich files for defamation in London, and also in Australia, saying that his reputation has been damaged by this book about him, written by this journalist. So what does the publisher do, Kieran? Does HarperColllins defend the book? 

KIERAN:
So In August last year, HarperCollins hit back in Australia. They filed an interlocutory application seeking for the Australian dimension of litigation to be thrown out, stayed or at least paused until the English proceedings had been determined. They also asked for a lot of money. 

They asked for what's called security of costs. The idea that Abramovitch be required to deposit millions of dollars with the Federal Court to pay HarperCollins legal fees if he lost. And this was a pretty bold gambit. In their submissions, HarperCollins described the billionaire's Australian litigation as an abuse of process. 

Subsequently, Arabella Pike, a HarperCollins publishing executive, described this wave of litigation on both hemispheres as David versus Goliath on steroids. A phalanx of the world's richest men ganging up against a lone journalist.

And so that would have been a really important Australian court case, This interlocutory application  it would have been a really important judgement on how an Australian court would approach this parallel defamation litigation. But then the case settled. 

The oligarch had a preliminary legal win in England, a technical win where a judge found that subject to any defences. The claim of defamation was made out and HarperCollins then settled and they agreed to make some minor changes to the book, pay a small amount of money to a charity, and include additional comments from a premature spokesperson. 

And so because of that, we never got this important Australian judgement and I think this case would have been forgotten. 

You know, this unusual David and Goliath would have been consigned to legal history, remembered as little more than a footnote in a defamation textbook. But then Russia invaded Ukraine. 

RUBY:
We'll be back after this. 

[Advertisement]

Archival Tape -- Reporter:
“Vladimir Putin has just addressed the Russian people moments ago, announcing what Putin called the start of a military special operation, in his words, to demilitarise Ukraine, that Russia would bring in troops.” 

Archival Tape -- Boris Johnson:
“Our worst fears have now come true and all our warnings have proved tragically accurate.”

**Bomb sounds**

Archival Tape -- Reporter:
“another barrage before dawn, as the assault closes in on Kyiv.” 

**Bomb sounds**

Archival Tape -- Reporter:
“Two and a half million civilians are suddenly on the frontline.” 

Archival Tape -- Boris Johnson:
“Today, in concert with our allies, we will agree a massive package of economic sanctions designed in time to hobble the Russian economy.”

RUBY:
Kieran, In February Russia invaded Ukraine, which was the beginning of whats now been two months of warfare. In the wake of that invasion you’ve been looking at this defamation case launched by the Russian oligarch Roman Abramovich. So can you tell me more about why that is? What is his connection to Ukraine? 

KIERAN:
I think it's important because it throws new light on this case because of the reaction of a number of Western governments to Roman Abramovich in light of the war in Ukraine. So he has been sanctioned by governments in Australia, in Canada, in the EU, in the UK. There's been discussion that the American government is contemplating sanctioning Roman Abramovich. 

And as part of that, we've got a new understanding of the way at least Western intelligence views his relations with Putin. So, for example, a statement issued by Britain's sanction office in early March described Mamma, which as a pro-Kremlin oligarch associated with a person who is or has been involved in destabilising Ukraine and undermining and threatening Ukraine's territorial integrity. Namely, Vladimir Putin. And that document goes on to allege that Abramovich has had a close relationship for decades with Putin. He's obtained financial benefits or other material benefits for Putin and the Russian state and receive preferential treatment and concessions as a result.

Archival Tape -- UK MP: 
“He’s a person of interest to the home office because of his links to the Russian state and his public association with corrupt activity and practices.”

KIERAN:
It even alleges that a company that Abramovich has a major shareholding in a Russian company called Evraz is directly involved in the war effort by supplying steel to the Russian military. 

Archival Tape -- UK MP: 
“Surely Mr. Abramovich should no longer be able to own a football club in this country. Surely we should be looking at Seising some of his assets, including his £152 million home.”

KIERAN:
And as a result of all that, Abramovich has been forced to relinquish a lot of his assets. He's been forced to sell Chelsea Football Club. And, you know, that's been a whole saga in the UK. 

So I guess all of that led me to revisit this, this case in Australia. And I thought it sort of sheds new light on the way that Abramovich had brought a claim in Australia against the publisher of critically acclaimed investigative journalism. And what that says about whether our defamation regime, whether public interest journalism is sufficiently protected within it. 

RUBY:
So, knowing what we know now, after the invasion of Ukraine – how does it inform how we look back on this defamation case in Australia?

KIERAN:
Because the case settled, it's unclear what the federal court would have done, whether they would have summarily dismissed Abramovich's claim or let it go ahead to a hearing, even to get to that really early stage of litigation. 

The publisher spent an estimated quarter of 1,000,000 AUD. The total cost for the English litigation was almost 3 million, and millions more would have been spent in legal fees if the two cases had gone on. As Pike from HarperCollins said, these sums can bankrupt publishers, let alone individual writers. 

I think it's important just to add here that we're not suggesting that Abramovich or his lawyers acted inappropriately. The law firm Kennedys was merely acting on Abramovich's instructions, and he was entitled to commence these proceedings because a book containing potentially defamatory imputations against him was published in Australia. 

And we went to Kennedy for comments and they noted that the English decision meant that Abramovich's cause of action was therefore established and was not an abuse of process or vexatious.

RUBY:
Right

KIERAN:
But I do think it's worth reflecting on the bigger picture here. You know, London is often described as the liable capital of the world. Frequently used by foreign litigants to vindicate their reputation. And in recent months following the invasion of Ukraine, there's been a lot of soul searching in England about the ease with which Russian oligarchs, assisted by English lawyers, could use the British court system. 

You know, London's been mockingly described as London grad spokesperson for Prime Minister Boris Johnson warned law firms they should think very carefully if they're continuing to do anything that props up the Putin regime.

And so I think the Abramovich case shows that if Sydney hasn't followed London into becoming a global libel hub, then it's probably been so by accident rather than design. I spoke to David Rolfe from Sydney Law School, a defamation expert, and he said that although there are mechanisms for dealing in Australian law with parallel proceedings, particularly if they're vexatious or oppressive, the tests for those forms of counter relief are very high. He added that Australian defamation law has been criticised with some justification for being insufficiently protective of public interest journalism. 

I think this case is a reminder about the state of Australian defamation law and there have been calls to reform defamation law. There has already been some reforms. We haven't seen how those will play out and whether they might lead to more protection for public interest journalism. But but I guess something we perhaps haven't thought enough about is, you know, how our defamation regime here might be attractive to overseas litigants, potentially rich and powerful overseas litigants. And do we want to become a jurisdiction that's attractive to litigants like that? Do we want Australian law being used against public interest journalism or do we want to have robust safeguards within our law to ensure that public interest journalism is protected and empowered

RUBY:
Kieran, Thank you so much for your time,

KIERAN:
Thanks

[Advertisement]

RUBY:
Also in the news today…

The Reserve Bank has increased interest rates for the first time in more than 11 years, with a 25-basis-point hike taking the cash rate target to 0.35 per cent.

The decision, which comes after inflation reached 5.1 per cent, comes in the middle of the election campaign, which has been focused on cost of living pressures. 

Reserve Bank governor Philip Lowe also confirmed more rate rises would be coming.

And The US Supreme Court will reportedly overturn the most important legal precedent protecting the right to abortion access in the United States.

A draft of the court’s opinion, overturning the historic Roe vs Wade decision, was leaked to the website Politico on Tuesday.

If the opinion is formally published by the court, it would allow each state to decide whether to restrict or even ban abortion.

It is the first leak of a draft opinion in US Supreme Court history.

I’m Ruby Jones, this is 7am, see you tomorrow.

 

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