London High Court Claim

Ziyavudin Magomedov was arrested with his brother Magomed in March 2018.

In a wide-ranging claim filed at the English High Court, Mr Magomedov and his representatives accuse a number of parties – both western corporations and entities linked to the Russian state – of unlawfully conspiring against him and his business interests. They are alleged to have assisted in, and profited from, a concerted campaign to deprive him of his liberty and his companies.

The detailed Particulars of Claim were filed at the English High Court in August 2023 and can be viewed here. Defendants in the claim include Texas Pacific Group (TPG), the US private equity giant, the UAE-headquartered logistics group DP World, and major Russian state companies Transneft and ROSATOM.

Mr Magomedov’s Summa Group was a large logistics and engineering conglomerate with investments in several assets. These included the co-ownership of the Port of Novorossiysk (NCSP) in the Black Sea, and a key stake in the FESCO Transportation Group, including the Commercial Port of Vladivostok.

According to the claim, the conspiracy divides into two essential features – namely, distinct attacks on NCSP and on FESCO. More can be read about each of these attacks in the boxes below.

Mr Magomedov is represented in the case by Seladore Legal in London.

NCSP conspiracy

In the years preceding his arrest, Mr Magomedov was engaged in a bitter dispute with state-owned transport company Transneft.

By early 2018, he faced pressure from powerful government interests to dispose of his assets. To comply with these demands, Mr Magomedov and his family agreed to sell their stake in NCSP for $1.3 billion. Following a long negotiation and just days before the deal was to be officially completed, Transneft president Nikolai Tokarev met with Russian president Vladimir Putin. The very next day Ziyavudin Magomedov and his brother Magomed Magomedov were arrested.

Facing threats, and without Mr Magomedov’s knowledge or permission, several individuals he trusted were induced into selling his stake in the port for a knock-down price of $750 million, according to the legal claim. Notably, it is alleged that Nikolai Tokarev (or his colleagues) told them that he would speak to President Putin to halt the prosecution if they agreed to a sale at that price.

Even despite this the Sberbank account containing the $750 million sale proceeds was frozen and later confiscated by the Russian state. Mr Magomedov was not afforded a fair trial to contest either the freezing or the confiscation. Despite several appeals, no explanation for the freezing order has yet been provided by the court.

FESCO conspiracy

Mr Magomedov is entitled to a majority and controlling shareholding in the FESCO conglomerate, owner of numerous strategic transport assets including the port of Vladivostok. Legal judgments in western jurisdictions have confirmed Mr Magomedov’s legal rights to the stake in FESCO. The stake’s current value is conservatively estimated to be $8.8 billion.

It is alleged that with Mr Magomedov in jail, a number of corporate and state interests, both Russian and international, conspired to raid a large block of Mr Magomedov’s shares in FESCO, remove his right to a controlling interest in the company, and allow the state-controlled ROSATOM to take the company over.

Specifically, TPG sold its shares in the joint venture company in which it held shares in FESCO along with Mr Magomedov to businessman, Mikhail Rabinovich (who, it is alleged, acted on behalf of ROSATOM). This was an unlawful action, taken against contractual obligations, and went contrary to personal reassurances sent by TPG founder David Bonderman to Mr Magomedov after he was jailed, according to Mr Magomedov’s legal claim.

The sale to Mr Rabinovich gave control over the joint venture company owning Mr Magomedov’s stake in FESCO to a party hostile to Mr Magomedov. It is alleged that soon afterwards, Mr Magomedov’s allies on the FESCO board were removed through a combination of threats, bribes and other unlawful tactics.

Video evidence has come to light suggesting how much of this multi-pronged attack was planned in advance. The governor of Primorsk was filmed as early as November 2020 telling FESCO employees that the Russian government had decided that ROSATOM, the state atomic energy company, was to become the owner of FESCO. Numerous local and international media have reported that FESCO’s assets are likely to be auctioned to ROSATOM.

A Russian prosecutor has since obtained orders which purport to confiscate Mr Magomedov’s interest in FESCO altogether. These are being appealed.

Outside Russia, Mr Magomedov’s attempts to fight these unlawful manoeuvres have been more successful. In 2022, an LCIA Tribunal found that the corporate vehicle used by TPG and Mr Rabinovich acted unlawfully by completing the deal. Further information about this judgment can be found here.

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Other Cases

Following his arrest in 2018, Mr Magomedov was held for almost five years without a trial, before being convicted in December 2022 by a Moscow judge whose verdict uncritically parroted the prosecution’s case.

As well as being deprived of his liberty, Mr Magomedov has faced an unbridled assault on his business interests – in both FESCO and his NCSP port business.

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