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For decades, London’s courthouses have served as cherished hubs for powerful Russian interests seeking to advance their business, shield their assets, silence critics, and shuffle dirty cash around.
Drawn by the UK legal system’s reputation as a global leader in dispute resolution, coupled with the capital’s less illustrious role as veritable haven for illicit finances, many are the Kremlin allies who’ve turned to the British courts with “collusive litigation” over the years, suing one another on secretly pre-agreed terms so as to launder their wealth through the resulting settlement fees.
Others still have taken advantage of the nation’s punitive defamation laws, bringing vexatious claims against critical journalists and activists so as to both intimidate them from further reporting or campaigning, and to drain their resources through lengthy and costly legal proceedings.
Perhaps the most spectacular cases of such ‘lawfare’, however, are those that have seen Russian oligarchs engaged in the vicious pursuit of strategic lawsuits as part of wider wars of attrition waged against their business rivals, with the promise of handsome profits for the droves of lawyers, consultants and litigation funders only too willing to help them along the way.
Byline Times’ new investigation delves deep into the latest of these bitter and winding legal sagas, laying out how Russian businessman Alexander Gorbachev’s litigation against former Kremlin politician Andrey Guriev for lucrative shares in a Moscow fertiliser company was bankrolled by a controversial Israeli businessman, a UK group owned by “enablers” of Georgia’s autocratic regime, and a scandal-ridden Miami firm that once held sizable investments in several European football clubs.
That these actors held a stake in the lawsuit is no secret to Guriev himself, who was sanctioned in 2022 for his control of assets generating significant revenue for Russia’s war in Ukraine. But the Vladimir Putin ally now believes that another, perhaps more powerful set of hands may ultimately have been behind Gorbachev’s claims – and he is determined to find out who.
Assets, Dirt Cheap
With holdings worth more than $7.6 billion, PhosAgro is one of the world’s largest producers of phosphate fertilisers. Based in Moscow, its roots go back to the early 1990s, with oligarch Mikhail Khodorkovsky’s purchase of a lucrative mining complex in Russia’s far northwest during the anarchic privatisation of state assets that followed the Soviet collapse.
Better known by his reputation now as one of Putin’s harshest critics, Khodorkovsky would eventually flee Russia in 2013 for exile in London, having served eight years on fraud, embezzlement and money laundering charges he says were politically motivated.
Guriev, a co-director at Khodorkovsky’s holding company and a member of the Russian Federation Council who built PhosAgro during the wildcat years of Russian capitalism, was joined there by Gorbachev, an old friend from his days as a Communist Party youth secretary, as vice-president of the new firm.
After prosecutors seized Khordokovsky’s mining interests following his 2003 arrest, PhosAgro moved swiftly to purchase those assets from the state at below-market rates. Guriev went on to become a wealthy man – with a current net worth of roughly $9.5 billion, he was at one point the owner of the $450 million Witanhurst estate in Highgate, London’s second largest private residence after Buckingham Palace.
He eventually stepped back from politics in 2013. While some of his shares in PhosAgro have since been sold back to the Kremlin, he and his family continue to control a sizable portion of the group through an offshore trust, which saw them targeted with Western sanctions following the 2022 invasion of Ukraine for ownership of assets feeding Russia’s war machine.
By that stage, Guriev was already embroiled in a vicious dispute over the very same interests that had seen him sanctioned. These troubles began in 2015, when he received a letter from a team of private investigators in the UK, which included two high-ranking former Met Police officers, informing him of their ongoing probe into his ownership of PhosAgro and the circumstances of its listing on the London Stock Exchange, warning that civil, even criminal, proceedings would likely follow.
Their investigation, later described by a judge as “aimed rather to intimidate” than elicit answers, had been driven by a claim that some of Guriev’s shares in PhosAgro were in fact meant to have been held in trust for his old comrade Gorbachev, who’d progressed from vice-president to chairman before leaving the firm in 2004. Community Safety Development Ltd (CSD), as the PI firm was known, wound up amassing 15,000 documents on Guriev and his wife, only for their sleuthing to backfire spectacularly when the oligarch successfully used UK Data Protection laws to force them to hand over all the information they’d gathered.
The Funders
It was Gorbachev who hired the private investigators and who then brought legal proceedings against Guriev, initially in Cyprus. But court proceedings can be costly, and claimants often seek outside help to fund their cases.
Here, the mystery deepens, as Gorbachev would end up seeking funding from a trio of seemingly unconnected companies, all of whom have connections to Russians with football interests.
First into the picture comes Marholm Ltd, an offshore firm registered in the opaque tax haven of the British Virgin Islands, which bankrolled both Gorbachev’s private investigators and his Cyprus lawsuit. Court filings obtained by Byline Times indicate the controlling interest behind Marholm was ultimately an Israeli businessman by the name of Levi Kushnir, better known for his ill-fated stint as chairman of Portsmouth FC shortly before its financial collapse in 2010.
Kushnir purchased his initial stake in the club from Alexandre Gaydamak, a Franco-Russian oligarch who later fled to Moscow after being found guilty by a French court of illegal arms trading in Angola.
His other partners at Portsmouth FC included Daniel Azougy, a lawyer disbarred for 14 years by the Israeli Supreme Court following his 2002 conviction for fraud and breaking and entering. Another was Yoram Yossifoff, a fellow Israeli attorney implicated in the UK’s notorious Southern Cross Care Homes scandal. Azougy would later claim Yossifoff, before dying of a sudden heart attack in 2016, had also been muscled out of his shares in the Park Lane Club, a London casino popular with Russian expats, following a concerted campaign of “pressure” from a Latvian businessman. Azougy even claimed that at one point, Yosifoff had had a grenade thrown at him by an unknown assailant.
Kushnir’s company continued to fund Gorbachev’s litigation in the Mediterranean island