Oleg Deripaska accuses rival bringing £1.6bn suit of running protection racket

Russian oligarch’s claims of extortion and bribes dismissed by Michael Cherney’s lawyers as ‘cynical tactic’ to deflect attention

Oleg Deripaska, the Russian oligarch close to financier Nat Rothschild and Lord Mandelson, has accused his rival Michael Cherney of bribing politicians and “masterminding” a protection racket.

The allegations emerged in London’s high court on Monday where Deripaska looked to supplement his defence against a £1.6bn suit brought by Cherney by painting the claimant as a leader of an organised crime ring. Cherney’s lawyers immediately branded the claims as a distraction.

Cherney alleges that he was a partner in Deripaska’s aluminium business Rusal, but was never paid for his stake. The Rusal boss is fighting the claim, claiming their relationship was actually that of a businessman being extorted by a crime boss.

Deripaska’s lawyers are attempting to persuade the court to consider allegations that Cherney made mysterious payments to Israel deputy prime minister Avigdor Lieberman and “a former prime minister in Bulgaria”, as well as extracting protection payments from the billionaire Reuben brothers when they ran a company called Trans World Group (TWG).

Mark Howard QC, for Cherney, said that the move was “a plainly cynical tactic” to “deflect” attention from the case. “Previously Mr Deripaska had not suggested that the relationship between Mr Cherney and the Reubens was improper. Now he says that Mr Cherney masterminded a krysha [Russian protection racket] on TWG.”

He concluded: “[The allegations] don’t have any relationship to the facts of the case”.

Cherney lives in exile in Israel and filed his lawsuit in 2006 in London on the grounds that he could face assassination if he returned to Russia. The decision to hear the case in the UK promises to provide a fascinating insight into how oligarchs made their fortunes in the post communist Soviet republics.

In his 2008 ruling on where the case would be heard, Mr Justice Christopher Clarke said “a considerable body of evidence has been put in relating to Mr Cherney’s alleged criminality” while adding: “Mr Deripaska, himself, is the subject of serious allegations … In July 2006 the US authorities revoked Mr Deripaska’s entry visa.

“According to the Wall Street Journal, the entry ban related to concerns by US law enforcement officials that Mr Deripaska had ties with organised crime in Russia”.

The trial, which is scheduled to begin in April, follows the three-month battle between two more Russian oligarchs, Boris Berezovsky and Roman Abramovich, as well as the recent libel action by Rothschild against the Daily Mail which hinged on his connections to Deripaska.

Lieberman has previously denied allegations of wrongdoing in relation to dealings with Cherney. A spokesman for the Reubens did not comment, however the brothers have not had a business relationship with either Cherney or Deripaska for a number of years. A spokeswomen for Deripaska did not add to what had been said in court, although the tycoon’s aides insist he is now able to travel to the US.

A spokeswoman for Cherney’s legal team added: “[He] will certainly deny any allegations of this sort [in court] if [Deripaska] is permitted to make them.”

When the trial will be heard, however, is uncertain. Judge Andrew Smith, who is hearing proceedings, said the April trial may be now be delayed, until the parties are more prepared.