The case, brought by Arkady Gaydamak against Lev Leviev (Levaev) in London in 2012, over disputed unpaid commissions and dividends from diamonds business in Angola. Involves testimony on the roles of the US-Russian rabbi Berl Lazar and an Angolan general. Gaydamak lost the suite.
Gaydamak is convicted in the so called French “Angolagate affair” of arms sales and money laundering between France and Angola during the civil war in Angola (1975-2002). The amount of these sales is estimated at some $ 790 million.
The first instance sentence for the “Angolagate affair” was handed down on October 27, 2009 in Paris. Gaydamak, alias Bar Lev ARYE (his Israeli ID) and Falcone were found guilty of illegal arms deals, tax fraud, money laundering, embezzlement and others, sentenced to six years in prison and fines. Gaydamak was sentenced in absentia.
The Paris Court of Appeal’s decision was given on April 29, 2011. Gaydamak’s sentence was reduced to three years of prison and €375,000 fine for tax evasion and laundering of money of “serious criminal origin” (p.73 of the document). The appeal decision confirmed the international arrest warrant for Gaydamak (ibid). The appeal court cleared the majority of defendants, including Gaydamak, for proper arms trafficking, accepting their claims that they acted on behalf of Angola’s government.
In 2013 a group of Angolan citizens submitted a complaint to Swiss prosecutors against Gaydamak, his partner Russian senator Vitaly Malkin and others, pretending they helped to embezzle Angolan State debt to Russia to Swiss accounts.
In 2018 brother and son of Leviev were reportedly arrested in Israel in the case of diamonds smuggling. (See also mentions of Levaev in a Gennady Petrov’s conversation from Tambovskaya gang case and an Austrian Prosecution’s document on Leviev’s link to Mikhail Chernoy from Izmaylovskaya gang).
Taiwanchik (Alimzhan Toktakhunov) claimed in an interview that Gaydamak was his friend. Gaydamak resides in Moscow.
In 1972, Gaydamak emigrated to Israel and than to France from USSR on the so-called Jewish exit visa. See more on this type of emigration and suspicion of cooperation with KGB of the new immigrants also involved in organized crime, raised by Swiss Intelligence (2007) and an FBI report (90ths).
The text of the document has been extracted automatically and may contain errors.
### Text extracted from: https://tbcarchives.org/wp-content/uploads/gaydamak-vs-leviev-UK.pdf
Neutral Citation Number: [20121 EWHC 1740 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before :
MR JUSTICE VOS
Between :
Arkady Gaydamak
– and –
Lev Leviev
Case No: H C 11 COO 192
Royal Courts o f Justice
Strand. London, W C2A 2LL
Date: 29 06,2012
Claimant
Defendant
Mr David W olfson QC and Ms Zoe O ’Sullivan (instructed by M ishcon de Rcya LLP) for the
Claim ant
Mr Justin Fenwick QC and Mr Neil M endoza (instructed by Stewarts Law LLP) for the
Defendant
Hearing dates: 23rd to 25 th May, 29lh May to 1 s‘ June, 12th June, and 14th to 15th June and 18th June
2012
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken o f this
Judgm ent and that copies o f this version as handed down may be treated as authentic.
Approved Judgment
Mr Justice Vos:
Introduction
Gaydamak v. Leviev
1.
2.
3.
4.
5.
6.
This action is brought by the Claim ant, M r A rkady G aydam ak ( “Mr G aydam ak”) to
enforce an alleged w ritten agreem ent dated 13,h D ecem ber 2001 with M r Lev Leviev
(“ M r L eviev” ) (w hich I shall call the “ 2001 A greem ent” , w ithout there being any
im plication that there was such an agreem ent). The defences arc simple: first, that the
2001 Agreement was never signed, and secondly, that the claim s under it were
com prom ised by a settlem ent agreem ent betw een the parties entered into on 6lh August
2011 (the “ Settlement A greem ent”).
The claim s arise out o f the parties’ business activities in Angola, m ainly in relation to
diam onds. Angola is the third largest diamond producer in Africa, and the fifth largest
in the world. The legal position in Angola is (and was) that diamonds arc state property
and can only be exported with a licence from a state-ow ned com pany called Em prcsa
de Diamantcs de Angola (“Endiam a”).
The background to the claims can be very briefly described as follows. M r G aydam ak
w as involved in A ngola during the 1990s and becam e influential with the G overnm ent
and President dos Santos.
In the late 1990s, he claim s to have suggested to the
G overnm ent that it should control the diam ond industry m ore effectively to prevent
A ngolan rebels continuing to obtain funding from so called “blood diam onds” . This led
to the establishm ent o f a diam ond trading com pany called A scorp S.a.r.L (“A scorp” )
whose shareholders were Sociedade de Com erzializacao de Diamantes de Angola
Sodiam S.a.r.L (“ S odiam ” ), a G overnm ent ow ned entity, as to 51% , the G oldberg
G roup – Leviev W clox – Ltd (“W elox”) as to 24.5% , and T rans A frican Investm ent
Services, T.A.LS. – Ltd (“TA IS” ) as to 24.5%. These shareholdings arc not in doubt,
but the interests lying behind Wclox and TAIS are less clear. At the least, it seems now
to be com m on ground that Mr Leviev held an indirect interest in 50% o f W clox, with
the other 50% being held ultim ately by two businessm en, a M r Silvain G oldberg (“ M r
G oldberg” ) and a M r Ehud Laniado (“ M r Laniado” ).
M r G aydam ak says that he introduced Mr Leviev, an internationally renow ned diam ond
trader, to front for him as he (M r G aydam ak) w as experiencing reputational problem s in
France and elsew here from at least D ecem ber 2000, when an international arrest
w arrant was issued against him. Mr Gaydam ak says that M r Leviev agreed to hold half
his (M r L eviev’s) interest in Ascorp for him, and that he and Mr Leviev agreed to split
their
to “ profit and
interests
responsibility” 50/50.
respective A ngolan businesses, as
in all
their
The oral agreem ent to split their interests 50/50 w as, according to M r Gaydamak,
ultim ately recorded in w riting in the 2001 A greem ent, and it is that agreem ent that Mr
G aydam ak seeks to enforce in this action. The 2001 Agreem ent was, according to Mr
G aydam ak, handed for safe-keeping to the C h ie f Rabbi o f Russia, Rabbi Bcrl Lazar
(“ Rabbi L azar” ), since M r G aydam ak and M r Leviev w ere both leading m em bers or
sponsors o f the Jewish com m unity in Russia which Rabbi Lazar led.
A s I have said, M r Lcvicv’s defence is that the 2001 Agreem ent was never signed by
him. His case is that the docum ent that he gave to Rabbi Lazar w as a m anuscript
agreem ent made in S eptem ber 2000 for M r G aydam ak to m ake regular charitable
Approved Judgment
Gaydamak v. Leviev
7.
contributions to the Jew ish com m unities they both supported (the “ Septem ber 2000
Agreem ent” ).
The second m ajor issue in the case relates to the “drop hands” Settlem ent Agreement
that was undoubtedly signed by each o f M r G aydam ak and M r Leviev in Luanda on 6h
A ugust 2011. M r G aydam ak contests the enforceability o f the Settlement Agreem ent
contending first that it was not intended to com e into force until a date had been agreed
for it to do so, and secondly that it w as induced by fraudulent m isrepresentations made
on Mr L eviev’s behalf by General M anuel H elder Viera Dias (“General K opelipa” ) in
the presence o f M r A ntonio C arlos Sum bula (“ M r S um bula” ), to the effect that M r
Leviev w ould m ake M r G aydam ak a proposal for com pensation to be paid to him
proportionate to the volum e o f business being transacted in A ngola. M r Gaydamak
says that a sum o f U S$500 m illion was m entioned, with US$50 m illion being paid at
once. Mr Leviev’s response is to say that he did not agree to pay Mi* G aydam ak a cent,
and that he m ade that very clear to G eneral K opelipa and M r Sum bula. His two
conditions for entering into the S ettlem ent A greem ent w ere that he w ould pay M r
G aydam ak nothing and that he would not meet Mr G aydam ak in person (w hich he did
not do). Not surprisingly, therefore, issues as to the authority o f General K opelipa to
act for M r Leviev and to make representations on his behalf have arisen. General
K opelipa was at the tim e the M inister o f State in Angola. It appears that his position is
akin to that o f Prime M inister. M r Sum bula was the C h ie f Executive O fficer o f
Endiam a. I will set out the precise issues that will need to be decided once I have dealt
in a little more detail with the chronology o f the extraordinary events that have led to
this litigation.
Chronological background
8.
9.
On I s’ August 1998, Mr Avi Dagan (“M r Dagan”) and Mr Danny Yatom (“ Mr Y atom ”),
set up SCG Israel Limited (“ SCG ” ), a com pany ow ned by M r G aydam ak, M r Yatom ,
and financed by M r G aydam ak, with a view to
M r Dagan and M r M oshe Levy
providing security services in Angola.
On 19,h Septem ber 1998, SCG entered into a M em orandum o f U nderstanding with the
Republic o f A ngola to establish “a security’ Unit for the protection o f V.l.P. Institutions
and Intervention”. M r Gaydam ak explained this agreem ent in his evidence as being, in
effect, a necessary cover to allow SCG to bring arm s into A ngola to protect the
diam ond industry, even though diam onds arc not mentioned in the agreem ent itself. Mr
Yatom was a previous head o f Mossad, and M r Dagan was likewise ex-Israeli security.
10.
At or about the end of 1998, M r G aydam ak met M r Leviev for the first time.
11.
On 7th O ctober 1999, a M em orandum o f U nderstanding between “ RDR” and W elox
was signed (the “ 7th O ctober agreem ent” ). According to M r Gaydam ak this was an
understanding betw een tw o com panies ow ned by M r L aniado and M r G oldberg in
relation to the re-organisation that was taking place in the A ngolan diam ond industry.
The agreem ent was signed by Mr G oldberg, M r Laniado, M r G aydam ak and Mr
Leviev, amongst others. M r Gaydam ak claim ed that the 2% levy on turnover o f rough
diam onds that the 7,h O ctober agreem ent provided to be paid to RDR was intended to be
for him . RDR was, according to M r G aydam ak, transform ed into A scorp, and the
express term s o f the 7th O ctober agreem ent contem plated that it would be binding on
R D R ’s successors and assigns, even if RDR were re-organised. M r Leviev said that Mr
j u l j * z . v v i , i v i i iv iv ^ iik – i v i a i i i c i
v_>ti
Limited (“Calsen”), a BVI company. He was the sole registered shareholder of Calsen.
but it appears that he held that share for Mr Gaydamak.
iv j l i i v i a i i i L i )
i v i a m c i
m v
22.
23.
In July 2001. according to Mr Leviev, he met Mr Gaydamak and agreed to discontinue
their joint business activities in Kazakhstan and Africa Israel.
On 28lh August 2001, a letter of understanding was signed between Mr Gaydamak and
Mr Leviev whereby Mr Gaydamak’s company, A.K.S., sold his holding in Africa Israel
back to Mr Leviev’s Memorand Limited.
VppniAcd Judgment
Gavchimak \. Lc\ic\
24.
25.
26.
27.
28.
On 25’h November 2001. Calsen invoiced L.L.D. Ltd. for USS2.273.385.35 for 1515.59
carats of polished diamonds. Mr Gaydamak denied that this invoice reflected a genuine
sale of polished diamonds, but said that it was an invoice requested by Mr Leviev to
conceal a payment to him from Mr Leviev in respect of their partnership arrangements
in Angola. Mr Leviev originally denied that this invoice had been received by his
company, but ultimately accepted that it represented a sale of polished diamonds to
Calsen. LLD Diamonds Limited (not LLD Limited) is accepted by Mr Leviev to be his
main diamond trading company. That company is hereafter refereed to as “LLD
Diamonds”.
On 4lh December 2001. Mr Dagan’s son-in-law, Mr Elad Koren, emailed Mr Mantel
saying that Mr Dagan “spoke with Vered [Rax] from LLD yesterday and she said that
she made the transfer before last week-end, so I guess you will see that today please
inform me because [Mr Dagan] will he busy today”.
On 5lb December 2001. Mr Dagan emailed Mr Mantel as follows. The email is badly
spelt and hard to understand: “I forgot to cleare it on my last E mail that you should
transfer from “calsen” to your privet acount. Nov. payment o f S3 5k. Please confirm.
Until now, I did not have the chance to talk to the “father” regarding the payment to
Kianda, (his wife has arrived, and he did not come to the “Mate “, any way we will do
it from “calsen “. Do you have the bank details’? On camming Wednesday, 12/12/01 I
plan to go to meet our Mr. futhis, do you think that it will be better that you will call
him? after all, I met him only once. 1 want to deal with the new Co. and to make a
transfer from “calsen ” to the new Account. I also think it will be wise to arrange the
background fo r the “big” transfer when it will arrive from Chepa”. It was put to Mr
Gaydamak that this email demonstrated that the payments to Calsen were in respect of
food provided to Angola by a Mr Chepa in Russia.
On 6lh December 2001. US$2,273,354.03 was paid to Calsen by LLD Diamonds,
corrcsponding to Calsen’s invoice dated 25b November 2001. This is common ground.
On 10th December 2001, Mr Gaydamak wrote to Mr Leviev “further to our telephone
conversation” in relation to an article published (by Mr Leviev, with information from
someone at Africa Israel, according to Mr Gaydamak) in the Marker Newspaper in
December 2001 alleging that Mr Gaydamak was suspected of bribing French
personalities including the son of President Mitterand. The letter also complained about
the statement in the article that Mr Leviev had severed his connections with Mr
Gaydamak as a result of the allegations, when Mr Gaydamak said that it was he that had
asked Mr Leviev to buy back his shares in Africa Israel, because he was dissatisfied
with the management of the company. The letter said that the article was false and
libellous and said that Mr Gaydamak would be demanding an apology.
29.
On 13lh December 2001. the office of Israeli Advocate Mr Eytan Modan (“Advocate
Modan”) allegedly date stamped as received a manuscript document written in Hebrew
by Mr Dagan (“Mr Dagan’s manuscript note”) saying:-
“OMEGA
WELOX
LL
49%
\ppr
Ascorp.
5. AG access to all accounting and records confidential.
6. First day o f each month reports.
50%opartnership in Zaire
50% in all future activities in Angola related to diamonds and
any activities arisingfrom the activities in Angola.
And AG reserves the right to come out officially.
He is entitled to sell his share to anyone he wants to and offer
the right o f first refusal to LL”.
30.
31.
This document is said by Mr Leviev to constitute Mr Gaydamak’s instructions to
Advocate Modan to draft the 2001 Agreement. Mr Gaydamak denies that he instructed
anyone, let alone Advocate Modan, to draft the 2001 Agreement. Mr Gaydamak’s case
is that the 2001 Agreement was drafted by a Mr Jacques Zimmerman (“Mr
Zimmerman”) on behalf of Mr Leviev.
On 13lb December 2001, a draft of the 2001 Agreement was allegedly sent by Advocate
Modan to Mr Ze’ev Zakharin (“Mr Zakharin”), a business associate of Mr Gaydamak,
by fax.
The 2001 Agreement is dated the 13″‘ December 2001. I shall set out the precise terms
of the 2001 Agreement in due course, but suffice it to say for the time being that it
provided for Mr Leviev to hold all his mutual business assets and interests in Angola
and Zaire including his share in Ascorp and the income derived from those assets on
trust in equal shares for himself and Mr Gaydamak. The 2001 Agreement was
allegedly entered into at a meeting between Mr Leviev and Mr Gaydamak in a room at
the Diamond Exchange, Naom Building, Ramat Gan, near Tel Aviv. Mr Dagan and Ms
Hortense Borenshtein (“Ms Borenshtein”) waited outside the room. Mr Gaydamak
says, and Mr Leviev denies, that it was agreed that the only signed copy of the 2001
Agreement would be entrusted to Rabbi Lazar for safekeeping, and that that was done.
\ppr
Approved Judgment
Gaydamak v. Leviev
Angolan entities. He said that he would use his influence to persuade
Mr Leviev to pay me, and I had no doubt that he would be able to do so.
63. I made it clear that I would only accept the conditions o f the draft
Settlement Agreement in exchange for Mr LeAev promising to pay
me
compensation.
1 would not have signed the agreement if 1 had not been
told that Mr Leviev would pay me compensation.
At the time when I signed
it, I believed that he intended to do so” (emphasis added).
101.
In cross-examination, he said that he understood that the President wanted him to settle
with Mr Leviev. When he was asked whether Mr Sumbula and General Kopelipa made
it clear to him that if he wanted the right to buy diamonds in Angola he needed to do
what the President wanted, he embarked on a lengthy speech about the circumstances in
which the Settlement Agreement came to be concluded. He told me about how much
time Mr Sumbula had spent with him. looking for a house that he (Mr Gaydamak)
could buy in the Luandan suburbs, and trying out Mi’ Sumbula’s new Porsche. Then he
told me how Mr Sumbula and General Kopelipa came to him at his hotel on the night of
Saturday 6th August 2011 with the draft Settlement Agreement. This piece of evidence
is of great importance so I set it out as follows:-
tt
“So Mr Kopelipa arrived and he told me: “Let’s go to the business centre.
We went to the business centre, Mr Kopelipa, Mr Sumbula and myself and
then he took from his briefcase a few papers, and he told me: “That is the
agreement that you should sign with Mr Leviev”, and this agreement was
approved by the Presidential administration. And he showed me the paper
and the letterhead o f the Presidential administration. Mr Kopelipa, by the
way, he is the state minister supervise the security and Presidential
administration and (inaudible), and de facto he is the controller o f the
Angolan oil. So Mr Kopelipa then show me the two documents, with four or
five page each document, and he told me that was approved by the
Presidential administration and he show me a letter, and the letterhead o f
Angolan administration, and it was written in Portuguese, but because I am
fluent in French, and I have a basic knowledge o f Portuguese, it was ven-
easy to me to understand what was written, and then he gave me the
document. I saw immediately that the document is not a translation, it’s
written in English, but it’s not a translation. Myself I was a translator fo r
many years, and I can see immediately when the text is written straight in
English or translated in English. So — and I start to check these few pages,
and I saw immediately no one word about the financial condition. Maybe I
am wrong with my legal knowledge, but I know the contract without any
compensation when you give something and you have nothing in exchange
would be not valid contract. At the same time, I saw the last specifically
indicated paragraph in this agreement said this agreement will be valid or
come into force only from the date on the first page o f this agreement. I
checked the first page, it was no date. So I told to myself from one side I
should be pleased to Kopelipa. So it is very clear it’s a set-up. and he did it
completely in accordance with, together with Mr Leviev. It’s a malicious set
up. By the way, later on I can show some proof and some rumours that Mr
Leviev planified this kind o f set-up, even before to come to Angola. So for
me, it was clear that it is set-up. and I told to myself: first, it is no financial
Approved Judgment
Gavdamak v. Lev iev
conditions that ire discussed; secondly, it’s no date, and dale, without date,
Secondly, I
this agreement is not valid, it’s veiy clearly saying here.
understood that it iraj an agreement prepared by Leviev’s legal adviser,
because Mr Leviev is follow or using the lawyers, and it was dear fo r me
that it was done by Leviev’s lawyer, and 1 wasn 7 assisted by the lawyer. It is
also written why I can always to ask revision o f this agreement. So I told to
them, immediately to Mr Kopelipa: where is the financial condition? And
he told me: it will he done later, I guarantee you. With my influence of
Mr Kopelipa, Mr Leviev will never dare not to execute what he promised.
My position is, as you know, so influential that he told me that it will he
payment. So I signed as the wording of the agreement by knowing
without date it will he never valid, and I gave it to Mr Kopelipa, took
office. Immediately both o f them, I didn’t knew that Mr Leviev will leave the
same night, but immediately. once they got. they went immediately to see Mr
Leviev before the departure” (emphasis added).
102. Mr Gaydamak was then asked about paragraph 62 of his first statement, and he said
this:-
” Q
– in paragraph 62 [you] say: he had raised it with Mr Leviev,
compensation would be proposed later by Mr Leviev, and he would use his
influence to persuade Mr Leviev to pay you.
.4. To persuade, and also with his position. Mr Leviev cannot not to realise
It is kind o f guaranteed that 1 will he paid. That’s what I
hi.s promises.
understood.
Q. He never told you that Mr Leviev had promised to pay you, did he?
.4. Absolutely he said that he Mill offer me elaborated compensation latei- on.
He said it absolutely.
O. You knew that
.4. And Mr Suniblda a m finned me that also.
Q. You knew that General Kopelipa and Mr Sumbula were representing the
Angolan government and the Angolan President, didn’t you?
4. No. they’ve been in the middle to oy to settle, in aceonlanee with their
own official interest die dispute, bid also they are a long-term business
partner for the w iy important businesses with Mr Levie\\ both o f them, and
their main interest irus to protect the interest o f their business partner.
Q. The deal
A. But also, thev are the employee o f Angolan administration, and no doubt
they pre fer not to have a noise.
Q. The deal that
A. IVliv President never raised that in our conveisation?
ippro.ed Judymenl
Gaydamak v. Leviev
Q. The deal that they promised you lirt.S’ that if you abandoned your claim
against Mr Leviev, then they would cooperate with you over your purchase
o f diamonds and you would have a new diplomatic passport. That was the
agreement.
A. Also, but the main point was the payment o f Mr Leviev o f compensation.
But also no doubt diplomatic passport, assistance, businesses, also, but
concretely speaking, it was very clear 1 ask $500 million compensation, and
they said he will provide to me offer”.
103. Mr Gaydamak was recalled on day 4 of the trial, when further documents were
disclosed from December 2001 showing that he had written to Mr Leviev on 10″‘
December 2001 complaining that he had falsely alleged bribery against him in the
Marker newspaper. It was put to Mr (iaydamak that the timing of this complaint made
it very unlikely that Mr Leviev would have been disposed to enter into the 2001
Agreement on 13Ih or 17Ih December 2001. His answer was not altogether clear but can
be summed up in the following answer:
“No. not nt all. The article, it ix — it tru.s’ not nice, but it will be not one
article that will bother something iniju irtant. Do you think if I rwi.s- not happy
with the article I will refuse to protect my riyhl on my part in the very big
diamond market in Angola? I was not happy about Mr Leviev, but it was
another proof o f his dishonesty, h not means that I will tell: if you publish
this kind o f article now, keep my shares for nothing and I go away. No”.
104.
To sum up Mr Gaydamak’s evidence, 1 did not find him a reliable witness. He was
garrulous and unstructured in his answers and keen to act as his own advocate rather
than focussing on the questions. He could certainly not be relied upon as regards the
details of his evidence. Since he saw things so much from his own perspective of the
world, it was difficult also to rely upon his evidence in some particular respects. But 1
thought there were veins of truth that ran through what he said. 1 will return to this in
due course.
Mr Avi Pagan’s evidence
105. Mr Dagan gave evidence in paragraphs 34-40 of his witness statement about the 2001
Agreement as follows:-
“34 I was with Mr Gaydamak in Tel Aviv in mid-December 2001 al a
business meeting. He got into my cur and were going back to Mr
Gaydamak’s house m Herzlia (on Rehov Havazelet Hasharon 39) which was
being used as an office. I had been working from Mr Gaydamak’s office (in
his house! fo r about 18 months by then. I spent almost every working day
there. On the imv out o f Tel .-ivh’. Mr Gaydamak said to me ire needed to
stop at Mr Leviev’s office in order to sign the agreement and formalise their
relationship and partnership with regard to the Angolan diamond business.
35. We drove straight to Mr Leviev’s office in the Noam Building in the
Diamond Exchange ut Ramat < ran (near Tel Aviv). We had been there before
together.
kppnived Judpmenl
Gaydamak v. Lev iev
36. I recall that ne were both shown into Mr Leviev's office. We sat together
in his office for about 15 mi mites on sofas near a little coffee table. I then
went out o f the room as it was clear that Mr Leviev and Mr Gaydamak
wanted to have a private conveisation. I chatted to Hortense. Mr Leviev’s
secretaiy. whom I had met several times before, and we passed about 15- 20
minutes that irur.
3". Mr Leviev (hen came mu smiling and clearly in a good mood. Mr
Gaydamak followed him Then Mr Gaydamak handed me a piece o f paper
(pages 38 Io 39). Mr Gaydamak gave another, signed, piece of paper to Mr
Leviev in front o f me. and Mr Leviev gave it to Hortense and she put it in a
Mr Leviev xaid that he would t^ive this
white middle size envelope.
The unsigned paper was in my
envelope for safe-keeping to Rabbi Lazar.
hand.
38. When they emerged from their private meeting, both Mr Gaydamak and
Mr Leviev appeared very pleased. 1 was left with the clear impression that
they had just signed an agreement and finalised the commercial terms o f
their relationship with regard to the Angolan diamond business. Mr Leviev
and Mr Gaydamak were both smiling. After giving the signed document to
Hortense. Mr Leviev shook hands with Mr Gaydamak and said "mazel
u ’bracha " which means "good luck and blessings " (in both Hebrew and
Yiddish).
39. I understood what i7 meant as these are the customaiy words used by
diamond dealers when a deal has been completed. Diamond dealers tend to
conduct entire business deals without signed documents: indeed it is unusual
for any signed documentation Io exchange hands. I do not have personal
knowledge about the diamond brokering business but it is common
knowledge, certainly in Israel, that this is how people involved in the
diamond industiy do business. It is known that when two diamond traders
shake hands and sav mazel bracha it is a contract.
40. After ire left the office. Mr Gaydamak explained to me in the car that he
and Mr Leviev had agreed to lodge the sole signed copy o f the agreement
with Rabbi Berl Lazar, the ( 'hief Rabbi o f Russia. Mr Gaydamak said it iraj
Mr Leviev's idea. I thought it iraj a bit strange that there was one signed
copy because in my usual experience there are two copies hut Mr Gaydamak
told me that in the Russian Jewish tradition this was the irqr things were
done, and it was usual to have only one signed copy which would go to the
Rabbi The unsigned copy he gave me was his copy. I think. He said the
signed copy would go to Rabbi Lazar but he said to
me "Avi keep the
This was not a surprise to me because 1
unsigned one for our records ' .
knew that Rabbi Lazar was close to both o f them, he was the moral authority
fo r both o f them, and they both respected him and had a relationship with
him. I was aware that when Rabbi Lazar came to Israel he would stay with
Mr Gavdamak and that they Mere close.
Approved Judypiienl
Gaydamak v. Leviev
42. As is my usual custom with documents I have been given, I kept the copy
o f the unsigned document that Mr Gaydamak had given to me".
106. Mr Dagan's perspective was that he hail no knowledge of the 2001 Agreement before it
was signed, that Mr Gaydamak played his cards close to his chest, but that he (Mr
Dagan) had glimpsed the signed version as Mr Leviev’s secretary placed it in an
envelope after the meeting between Mr Gaydamak and Mr Leviev had concluded.
107. Mr Dagan denied receiving any of the faxes from Mr Modan enclosing drafts of the
2001 Agreement, and said that Mr Dagan's manuscript note was written after the event
when he was explaining the terms of the 2001 Agreement to someone on Mr
Gaydamak's staff. 1 found this part of Mr Dagan's evidence impossible to believe. He
was embarrassed w hen giving it. and I was wholly unconvinced by the story he was
telling.
108. Mr Dagan was asked about his affidav it sworn on 2 4 1 March 2010 shortly after he was
That affidavit, as it seems to me. more
first reminded about the events of 2001
accurately represented what actually happened in relation to the drafting as follows:-
"11. Subsequently, at the encl o f 2001. Mi Gaydamak presented me with a
draft copy o f the contract between him and Mr Leviev. prior to its signature,
and requested that 1 will review the document"
109.
The affidavit went on to confirm that die 2001 Agreement was signed, but does not say.
as Mr Dagan said in evidence to me. that he had seen the signed copy. Interestingly
also, the affidavit says that it w as Mr Dagan who used the expression "mazel u'bracha",
not Mr Leviev or Mr (iaydamak, and that it was only later that Mr Dagan was told by
Mr Gaydamak that the only signed copy of the 2001 Agreement had been placed in an
envelope and sent to Rabbi Lazar.
110. Mr Dagan was asked numerous questions about the payments allegedly made by Mr
Leviev to Calsen and then Pusan. Mr Dagan pretended that he was not involved in the
invoicing process whereby Calsen invoiced I.I.D Limited for "polished diamonds in
various sums. I formed the view that he was indeed involved with Mr Mantel in that
process, and that he was the conduit through which information was passed as to what
should be invoiced and when. I shall return to the question of whether the payments
were in fact for food, as Mr Fenwick suggested in cross-examination, or in pursuance of
the 2001 Agreement as Mr Gaydamak and Mr Dagan suggested.
H I. Mr Fenwick spent some time trying to establish that Mr Dagan's evidence that he had
flown to Luanda with Mr Leviev and Mr Gaydamak on Mr Leviev’s private jet after the
2001 Agreement was a fabrication. ( ,'ertainly this did not occur in late December 2001
as Mr Dagan originally said (because Mr Leviev's passport showed that he did not
leave Israel between Iff1' December 2001 and 10“' January 2002), but it may have
occurred later - or indeed earlier 1 am not sure that the point, in itself, is of any real
significance. What was significant was that Mr Dagan had written to Mr Gaydamak's
solicitors seeking to correct paragraph 43 of his statement (where he had said that the
trip to Luanda with Mr Leviev had been at the end of December 2001), but had not then
made that correction when he gave evidence. Thus, he gave the continuing impression,
absent cross-examination, that he had flown to Luanda with Mr Leviev in December
2001, and on that occasion Mr (iaydamak and Mr Leviet had gone together to see the
kpproved Judgment
Gaydamak v. Leviev
President. He knew that to be false. The episode confirmed my view that Mr Dagan's
evidence could not be relied upon.
112.
Finally, I should mention an email put to Mr Dagan at the end of his evidence in which
Mr Dagan wrote to Mr Mantel about documents relevant to this case in which he
concluded by saying that "perhaps uv will even he able to make a few cents out o f this".
His explanation failed to persuade me that he had not meant what the words actually
say. namely that he was hoping to be paid. Again. I was confirmed in my opinion that
Mr Dagan was not a straightforward witness.
Mr Amos Ben Haim's evidence
113. Mr Ben Haim was a former Israeli Brigadier General. He worked for SCG in providing
security for the diamond contracts in Angola in 2000 and 2001. and later became
involved in Mr Gaydamak's farming and education projects in Angola. His evidence in
chief was to the effect that he observed the power and influence that Mr Gaydamak
wielded in Angola at that time, and how Mr Leviev played, in effect, second fiddle to
Mr Gaydamak. He also said that he had received cash sums of between USS 100,000
and US$400,000 from Mr Leviev’s manager. Mr Mordechai (Moti) Kramash ("Mr
Kramash”) and Mr Ramot on more than 5 occasions.
114.
I fanned a favourable view of Mr Ben Haim's evidence. I thought him a truthful and
careful witness. He was not deeply involv ed w ith Mr Gaydamak's business. As he told
me. he w as the man on the ground, but he w as able to form an impression from what he
saw and heard. He was heavily cross-examined about a sentence in his statement to the
effect that, if Mr Leviev w anted to meet the President, he had to ask Mr Gay damak to
arrange it. 1 think that was true, as Mr Ben Haim confirmed, in 2000 and for much of
2001. but he w as not so certain that it was true thereafter. He told me that Mr Leviev
and Mr Gaydamak spoke in English 40% of the time (which he understood) and in
Russian for 60% of the time (which he did not understand). He was. nonetheless
absolutely sure that Mr Gaydamak and Mr Leviev were in business together. He said
this:-
"I know that Mr Arkady Gaydamak'Lev Leviev was in a business connection
in the diamond business in Angola. 1 don’t know if they signed an agreement
or no. 1 understood that they have agreement, but I didn't see the agreement,
it's not my business. It for me was sure for 100 per cent — not 99 per cent.
100 per cent — they are together in the business o f the diamonds in Angola.
Very clear. Very, very clear and simple. Not complicated".
115.
I accept that this was true from Mr Ben Haim's perspective, and I accept that he
received cash from Mr Leviev’s people in Angola in the way he described.
Mr Gidon Marinovsky’s evidence
116. Mr Marinovsky is a financial consultant and a friend of Mr Gaydamak’s, having met
him at martial arts classes. He travelled once to Angola in January 2004 and says that
he attended meetings concerning Mr Gaydamak’s and Mr Leviev’s Angolan diamond
business in Israel. His main evidence was. however, about being asked by Mr
Gaydamak to audit the accounts relating to the diamond partnership between Mr
Gaydamak and Mr Leviev in 2003. When, however, he met Mr Leviev’s accountant.
approved .lutlpmi'nl
Gavdamak v. Leviev
Mr Nadav Grinshpon ("Mr Grinshpon ”). he was told that Mr Leviev would not allow
Mr Gaydamak access to any reports or accounts concerning the joint activities of Mr
Gaydamak and Mr Leviev.
117.
He too confirmed that it was
Mr Marinovsky was a careful and truthful witness.
common knowledge that Mr Gaydamak and Mr Leviev were in partnership together,
and that he had once been told by Mr Gaydamak that he had signed an agreement with
Mr Leviev in 2001.
Advocate Ronel Fisher's evidence
118.
Advocate Fisher has been Mi' Gaydamak's Israeli lawyer since 2006. His evidence
concerned the unsuccessful efforts he made to obtain information from Mr Leviev and
Rabbi Lazar in 2006. I found him a truthful witness.
Mr Sergiy Milyutin’s evidence
119
Mr Milyutin joined Mr Gaydamak’s entourage in 2002. He gave evidence about the
continuing cordial relations between Mr Leviev and Mr Gaydamak between 2002 and
2010, and about what Mr Alexei Lenetsky ("Mr Lenetsky”) had told him about the
period between 2003 and 2008 when he (Mr Lenetsky) had acted for Mr Gaydamak. In
particular, he recorded how Mr Lenetsky had said that he did not understand how Mr
Leviev could deny the 2001 Agreement, since it had been discussed in relation to the
proposed June 2005 MoU.
120.
Mr Milyutin said that when he was together with Mr Gaydamak and Mr Leviev. they
spoke Russian, and that he met Mr Gaydamak when he returned from Angola with Mr
Leviev on a few occasions.
Mr Pierre < irotz's e\ idence
121.
122.
123.
124.
Mr Grotz gave evidence by video link from Luxembourg where he is a financial
adviser. He has known Mr Gaydamak since 1997 and advised him for many years also.
Mr Grotz’s evidence in chief related only to a conversation he had had with Mr
Zakharin in August 2011. when he told Mr Grotz that he was friendly with Mr Leviev
and that he was assisting Mr Levies m his battle with Mr Gaydamak "hying to destroy
Mr Gaydamak completely and "drown him
In cross-examination. Mr Grotz explained the circumstances in which he had ceased
acting for Mr (iaydamak in 2005 when Mr Gaydamak moved his assets out of
Luxembourg Mr Grotz had sued Mr Gaydamak and was now continuing his litigation
against the trustees for Mr Gaydamak, whom he said had defrauded both him and Mr
Gaydamak. I accept Mr Grotz’s evidence.
Mr Yuri Bakharev’s evidence
Mr Bakharev has known Mr Gaydamak since 2 004. From 2002 to June 2011. he
worked for Alrosa. His evidence concerned Mr Gaydamak's influential position in
Angola, and his efforts in relation to the creation of Sunland in 2005. and Mr Leviev’s
attempts to obtain a share in Sunland. He also claimed to have assisted in the
discussions concerning a settlement of this dispute in 2011. having met both Mr
It seemed to me from what he said that he was as likely to
completely unpersuasive.
have written his name and number in Mr Gaydamak’s office in 2001 as in 2002. His
certainty may have been as much driven by a desire to help Mr Gaydamak, having just
made peace with him, as by a real recollection. The evidence did not much assist in
deciding whether Mr Dagan’s manuscript notes were given to Advocate Modan before
the 2001 Agreement was drafted.
Written evidence for Mr Gaydamak
129.
130.
Mr Gaydamak relied on a witness statement from Mr Alexei Lcnetsky concerning how
he acted for Mr Gaydamak in the drafting of the June 2005 MoU. I cannot say that I
derived much assistance from this statement.
The next statement relied upon by Mr Gaydamak was made by Mr Danny Yatom on
27'11 February 2012. Mr Yatom says that, at Mr Gaydamak’s request, he introduced Mr
Leviev to him at the end of 1998. Mr Yatom also said that he went to Angola with Mr
Gaydamak in September 1998 to meet President dos Santos to make a proposal for the
provision of security services for the Presidential Guard. Mr Yatom was involved with
SCG between August 1998 and April 1999, at which time he joined the Israeli Prime
Minister’s administration as his chief of staff.
Approved Judgm ent
( 'Hydnmak v lcvicv
131.
Finally, Mr Gaydamak relied on a statement from Mr Moshe Mantel concerning
Calsen’s operations. Mr Mantel gave details of how the payments from Mr Leviev to
Mr Gaydamak were made by LLD Diamonds to Calsen, and how invoices were raised
in respect of polished diamonds at the request of Mr Zakharin and Mr Dagan. He
alleges that the persons dealing with the payments on behalf of LLD Diamonds were a
lady called Vered and Mr Karmush. It appears that Mr Mantel refused to attend to give
evidence unless he was paid.
132. Whilst criticisms have been made of the failure of these witnesses to attend court to
give their evidence, it does not seem to me that this criticism is very significant (as it is
for Mr Gaydamak himself). Mr Mantel's demand to be paid was apparently beyond Mr
Gaydamak's control, and Mr Yatom is not a witness of such importance that his
attendance was necessary: indeed what he says does not seem to be much in dispute.
As I have already said, Messrs Lenetsky and Fisher had nothing of great significance to
say.
Defendant’s evidence
Mr Lev Leviev’s evidence
133. Mr Leviev gave his evidence in Hebrew, notwithstanding that he had made his first two
witness statements in English, and plainly spoke English adequately.
134.
His third witness statement starts by setting out his overall position to the effect that:
"ft]he alleged partnership [between me and Mr Gaydamak] is a figment o f Mr
Gaydamak's imagination", and "the [2001 Agreement] is not an agreement, but rather
a sham, around which Mr Gaydamak has cunningly spun a web o f false claims in an
attempt to wrongfully get his hands on my property".
135. Mr Leviev’s interest in Angola began in 1996 when he invested, through Daumonty
Financing Company B.V. (“ Daumonty”) in a large diamond mine there called the
Catoca mine, which was owned in part by Alrosa.
136. Mr Leviev gave extensive evidence in chief in 4 witness statements. I shall confine my
recitation of these statements to the most crucial parts concerning the events
surrounding the alleged signing of the 2001 Agreement and the conclusion of the
Settlement Agreement. I have, however, considered these statements in their entirety.
137.
In relation to the signing and lodging of the September 2000 Agreement with Rabbi
Lazar, Mr Leviev’s evidence was that the document was signed some 15 months before
the alleged 2001 Agreement, as follows: -
“61. In September 2000 1 travelled to Moscow for the celebration o f the
opening o f a new and very modern Jewish Community Centre, which
included: a synagogue: a libraiy: Kosher restaurants; auditorium: etc.. This
was a high profile event, which ... was attended, among others, by Mr
Vladimir Putin, the then President of Russia. ... In addition to Mr Putin, the
celebration was also attended by the Chief Rabbi o f Russia. Rabbi Berl
Lazar, and by Rabbi Mordechai Eliyahu, the fonner Sephardi Chief Rabhi o f
Israel (1983-1993), who were both (together with Mr Putin and myself)
standing on a dais.
Approved Judgm ent
Gaydamak v I cvicv
62. Mr Gaydamak, who travelled with me as my guest to the event, was also
present: however he iiB.s not standing next to us on the dais, but rather
amongst the rest o f the very respectable guests. 1 recall that following the
event Mr Gaydamak was upset with me for not inviting him to stand on the
dais. He reminded me that he had been making contributions to the
Federation at Jewish Communities fo r some time and made it very clear that
he expected appropriate acknowledgement in return.
63. Several days later Mr Gaydamak joined me in my private jet. together
with a few other significant donors, on a tour to visit several o f the Jewish
communities that ite were supporting in Ukraine (Zhytomyr: Kharakuv;
Dnipropetrovsk). During those days. Mr Gaydamak came to my house in
Moscow. We sat in the living room, together with Mr David Mondshine. the
person responsible for the financial aspects o f the Federation o f Jewish
Communities in the Commonwealth of Independent States. Mr Gaydamak,
who was clearly still very upset from the lack of respect showed to him (as he
understood it to be) during the celebration o f the new Jewish Community
Centre, told me that he felt that his contribution to the Federation of Jewish
Community deserved an appropriate acknowledgement and that he was
interested in being elected to the position of President o f the Federation o f
Jewish Communities in Russia. Mr Gaydamak then requested my support.
64. 1 note, in this context, that being nominated for such a position carries
with it a lot o f responsibility towards the congregation but also involves a lot
qf influence both within the Jewish community' as well as within the Russian
authorities, mainly as a result o!' Rabbi Lazar’s warm and fertile
relationships with the Russian regime.
result o f Rabbi Lazar's
65. 1 replied that 1 thought Mr Gaydamak was the right kind o f person to
take the position o f President o f the Federation o f Jewish Communities in
Russia, but went on to mention the irregularities in Mr Gaydamak's
donations. 1 also said that although 1 had been impressed by Mr Gaydamak's
willingness to donate to charity, a position o f that stature required a
commitment on a different scale.
66. Mr Gaydamak was made very upset and reacted veiy irritably - leaving
the room in anger On his return a short while after. 1 tried to calm him
down and explained to him again why 1 could not offer my support fo r his
candidacy under the present condition. 1 then told Mr Gaydamak that if he
increased significantly the amount o f his monthly donation and committed
himself to a two-year programme o f transferring donations to the Federation
o f Jewish Communities in the CIS. then by the end o f these two years I was
prepared to support his candidacy to the position he was after.
67. Mr Gaydamak agreed to my conditions, but was keen for the above to be
put into writing.
IVe therefore moved into my study accompanied - at Mr
Gaydamak's plea - by Mr Mondshine (notwithstanding the latter's protest - it
was rather late and Mr Mondshine was expected at home by his vrife). Mr
Gaydamak then took a blank piece of paper off the printer and handwrote (in
Russian) a document stating something along the following lines (the
"Document “):
A pp raved Judgm ent
Gaydamak v I cvicv
a. Mr Gaydamak undertwk to transfer to the Federation o f .Jewish
Communities in the CIS significant donations amounting to 350.000 USD per
month for two years (the “Commitment to Donate “):
b. Subject to compliance with the Commitment to Donate. 1 undertook to
support, by the end o f the two years, the appointment o f Mr Gaydamak to the
position that he desired - President o f the Federation o f Jewish Communities
in Russia.
68. We then both signed the Document and placed it in an envelope.
69. Since Rabbi Lazar would be very influential to the appointment o f Mr
Gaydamak to the sought-after position when the time came. Mr Gaydamak
asked fo r the letter to be deposited fo r saf ekeeping in the hands o f Rabhi
Lazar and 1. obviously, agreed.
70. The envelope was left in my possession. I used to hold meetings with
Rabbi Lazar from time to time in order to discuss community matters. As far
as I can recall, during a meeting that was scheduled in advance (prior to the
signing o f the Document) that took place shortly after the signing o f the
Document. I discussed with Rabbi Lazar the current matters o f the
congregation. At the end o f the meeting, which lasted fo r about half an hour,
I gave the envelope to Rabbi Lazar. As far as I recall, though 1 cannot recall
with absolute certainty. I indicated that it concerned an obligation taken by
Mr Gaydamak to transfer donations and that Mr Gaydamak expected to be
appointed President o f the Federation o f Jewish Communities in Russia. As
fa r as I can recall. Rabbi Lazar, who was in a hurry fo r another meeting, did
not pay special attention to what 1 told him about Mr Gaydamak. I asked
Rabbi Lazar to keep the envelope. To the best o f my recollection. Rabbi
Lazar placed the envelope in his desk’s drawer and left fo r his next meeting".
138.
In relation to the alleged 2001 Agreement, Mr Leviev said this at paragraphs 88-95 of
his third witness statement:-
^88. Through my various relations with Mr Gaydamak I was slowly learning
more and more about his character and his nature, and by mid-2001. 1 had
Mr
started to become concerned about Mr Gaydamak's character.
Gaydamak proved to be unpredictable and often irrational in his conduct.
Whenever matters did not go his way. he would he offended easily and would
become very- emotional. He was also veiy capricious and turned out to have
extreme mood shifts, as a result o f which it was never really possible to know
what to expect from him. Consequently. 1 started to lose my trust in him.
89. As i f to make things worse. I also believed that Mr Gaydamak felt
growing envy and hostility towards me. in particular after we reached a
parting o f ways in our business activities. From his point o f view I had a
strong international reputation and received favourable press fo r among
others things, the regalarisation o f the diamond industry in Angola. Mr
Gaydamak on the other hand was receiving negative press as a result o f the
"Angola-Gate " affair.
Approved Judgment
Gaydamak v. Lcvicv
90. Al the end o f 2001. despite, the fact that our joint business activities had
Th is request
ended, Mr Gaydamak asked to be my partner in ASCORP
came as a complete surprise to me. He came to my office in Ramat Gan,
accompanied by Mr Dagan (who did not join us in the meeting itself and
told me that as he was the one who introduced me to the President of Angola,
he deserved to he my partner. While reminding me that he was the one to
introduce me to the President and emphasising that I must have benefited a
lot from knowing him (Mr Gaydamak), he then made it very clear that if I did
not agree to his request he could "take away" what he allegedly "had
given" (as he saw it) by making my business activities in Angola very
difficult. Although he did not specif’ the way in which he would make my
activity in Angola difficult, his tone was aggressive and he clearly insinuated
that i f 1 did not cooperate, my business interests in Angola would suffer.
91. He then presented me with a one page document o f English text, which
was supposed to be a partnership agreement of some sort, which he wanted
me to sign. I did not pay particular attention to this document, as 1 viewed
the whole idea as nothing more than a ludicrous, unjustified demand, which I
did not take seriously. 1 rejected Mr Gaydamak's request and told him that 1
had no interest in being his business partner. In retrospect 1 can only assume
- based on Mr Gaydamak’s claim and nothing more - that the document
presented to me by Mr Gaydamak in 2001 is the same as or similar to the
2001 Document on which Mr Gaydamak’s Particulars of Claim are based.
92. 1 did not take a copy oj the 2001 Document from Mr Gaydamak and 1 did
not even read it (and probably could not have done given the fact that I do
not read English well). There was no reason to keep the document because it
was irrelevant given that 1 had rejected any prospect of a partnership deal.
93. A fter rejecting the "partnership " request, Mr Gaydamak then mentioned
that he had many expenses in Angola and he would appreciate receiving
financial assistance fo r these expenses. I understood his request for money'
for Angola to be a request fo r money for him.
It was obvious to me (in
particular after the rejection o f his "partnership demand") that Mr
Gaydamak's request fo r money was backed by his willingness (and ability) to
harm my business interests in Angola. In response 1 therefore said that 1
would be willing to consider his request fo rf inancial assistance in the future.
94. The meeting then ended and ice both left my office. The meeting ended
on a superficially amicable note. On my way out 1 saw Mr Dagan. who was
waiting outside. 1 shook Mr Dagan’s hand and, after a short courtesy
exchange, left fo r my other daily business.
95. For the avoidance o f any doubt I should note that:
a. as a rule. I do not sign contracts without first consulting my legal advisers.
Needless to say. I would never even consider signing a document written in
English (of which 1 only had a veiy basic command at that time) that had
been drafted without my involvement and presented to me for the first time,
without first having the document properly translated and discussing it with
Approved Judgment
Gaydamak v. Lcvicv
my legal advisers. Mr Gaydamak's claim that 1 did otherwise is in sharp
contrast to common sense and in sharp contrast to my business conduct:
b. although it is correct that Mr Gaydamak arranged my first meeting with
the President o f Angola, through his contact with Mr Ambassador, when the
meeting took place I had been operating in Angola fo r several years and the
arrangement o f such a meeting could not provide - not even remotely -
justification for Mr Gaydamak expectations".
139.
In relation to the payments that Mr Leviev allegedly made to Calsen, he said this at
paragraph 105 of his third witness statement:-
“Mr Gaydamak claims in paragraph 8 o f the Particulars o f Claim, that
between 2000 and 2003 1 made monthly payments o f on average, 3 million
.4s alleged
USD to him pursuant to the 2001 Document. This is not true.
proof o f these payments Mr Gaydamak has provided details o f six payments
allegedly made to [Calsen] during this period ... and identified six credits
recorded in Calsen's bank statements which apparently correspond to sums
that were paid to Calsen. as indicated above ... .
/ have no recollection o f
ever coming across the company Calsen before. That said. 1 cannot
remember the name o f the company/companies that Mr Gaydamak used in
order to sell polished diamonds (which he did. from time to time), and in the
absence o f the relevant accounting books 1 cannot check and verify the name
o f these company/companies. This stems from the fact that under Israeli law
there is no requirement to keep bookkeeping documents for longer than
seven years and uv did not For the avoidance of doubt. I own all the shares
in a company named LLD Diamonds Ltd. ... which is a leading diamond
exporter from Israel. It is not called LLD Limited".
140. Mr Leviev then gave a number of reasons why the later payments to Calsen cannot have
been made by him. He did, however, countenance that he had made payments to Mr
Gaydamak in paragraphs 107-108 of the same statement as follows :-
"107. 1 do recall however, that during the years 2001-2003, Mr Gaydamak
approached me from time to time with requests fo r financial aid fo r the
purpose, so he claimed, o f advancing projects in Angola in which he was
involved, or in order to help the country in funding various needs. I always
understood perfectly well that underlying these requests was the implied
threat that Mr Gaydamak could make my business life in Angola very
difficult. 1 was concerned that Mr Gaydamak had the power to undermine
my business of purchasing raw diamonds in Angola as a result of his
connections to Mr Ambassador, who knew the Angolan President veiy well.
This was a risk that I clearly wished to avoid. As fa r as I remember some o f
these requests were therefore accepted and ad hoc payments, amounting to
no more than a few hundred thousand USD each, were made to Mr
Gaydamak. However, because o f the time that has passed and the fact that
bookkeeping documents this old are not kept. I find it hard to reconstruct and
verify' exactly what payments were made and o f what amount.
108. Whenever Mr Gaydamak's requests for financial participation were
accepted. Mr Gaydamak would give me a sheet of paper with the name o f a
Approved Judgment
Gaydamak v. Lcvicv
company and the relevant bank account details to which the payment should
be transferred. 1 would then organise for the transfer o f the required
payment using funds that happened to be available at the relevant time in
any of a number of companies that 1 used for the running of business
activity'".
141.
In relation to the conclusion of the Settlement Agreement, Mr Leviev said this at
paragraphs 123-130 of his third witness statement:-
“123. On 3 August 2011 1 travelled from London to Luanda in Angola, for
business purposes. The day after my arrival, on Thursday 4 August 2011. 1
attended a business meeting in Luanda. While there. I received a phone call
from Angola's Minister o f State. General Kopelipa (General Manuel Helder
Vieira Dias Junior) asking whether he could come and meet me.
124. We agreed to meet up and indeed after a short while General Kopelipa
arrived accompanied by Antonio Carlos Sumbula, Endiama's President. We
met al offices in Luanda where I was holding other business meetings.
General Kopelipa told me that he had heard from Mr Gaydamak, who
happened to be in Angola, about Mr Gaydamak's legal claim against me and
that he thought we should try to reach some settlement in order to end the
dispute. General Kopelipa also said to me that Mr Gaydamak wanted to
meet me with that goal in mind. 1 understood that General Kopelipa ’s
motives in this regard were to avoid the embarrassment of a public case in
England about issues relating to Angola.
125. Faithf ul to my decision not to hold meetings with Mr Gaydamak again. 1
immediately answered General Kopelipa that I had no desire to meet Mr
Gaydamak. I also told him that 1 had no intention whatsoever o f paying Mr
Gaydamak as there was no partnership between us and I did not owe him
anything at all. I also told General Kopelipa that Mr Gaydamak had caused
me tremendous harm by initiating the present claim,
First, 1 had wasted
huge amounts o f time and incurred large legal costs.
Secondly, 1 had
suffered as a result o f letters that Mr Gaydamak’s attorneys have sent on his
behalf to third parties, untruthfully maintaining that Mr Gaydamak was my
partner and that I was in breach o f the partnership agreement and
demanding that these third parties refrain forthwith from dealing with me. I
told him that in fact, in this regard I intended to bring my own legal claim
against Mr Gaydamak in due course.
126. General Kopelipa then asked me whether 1 would he willing to sign an
agreement with Mr Gaydamak fo r a full and final mutual waiver of all legal
claims. I replied by saying that 1 would indeed be willing to reach such an
agreement, subject to the following conditions:
i)
it )
there would be no payment whatsoever involved: and
I would not have to meet Mr Gaydamak in person.
127. General Kopelipa then left and told me that he would meet with Mr
Gaydamak and present him with the terms o f the proposed settlement. A few
Approved Judgment
Gaydamak v. Lcvicv
hours later. General Kopelipa phoned me and said that Mr Gaydamak gave
his consent and that an appropriate agreement should be drafted.
128. A settlement agreement (the “Settlement Agreement “) was therefore
drafted on my instructions by my legal advisers in England and 1 gave it to
General Kopelipa on Friday, 5 August 2011.
129. In the evening hours o f the day after, Saturday, 6 August 2011, while I
was already on my iiljiv to Luanda's international airport. General Kopelipa
phoned me. told me that Mr Gaydamak had signed the Settlement Agreement
and asked to meet me again. General Kopelipa and 1 therefore agreed to
meet up and 1 therefore returned to offices in central Luanda fo r the meeting.
General Kopelipa arrived al the meeting accompanied by Mr Sumbula and
canying three copies qfthe Settlement Agreement — all originally signed by
Mr Gaydamak and by Mr Sumbula, as a witness to Mr Gaydamak's
signature.
130. 1 then signed all three copies of the Settlement Agreement and so did
Mr Sumbula - this time, as a witness to my signature. Two copies of the fully
signed Settlement Agreement were left with General Kopelipa and one copy
was given to me and is safely kept in my possession ...".
142.
Mr Leviev was asked in cross-examination about the date of the Settlement Agreement,
and the following exchange then took place:-
"Q. You saw, when you were presented with the document, signed by
the
Mr Gaydamak that the date had not been put on the front
document but Mr Gaydamak had put the date bv his signature.
A. Yes. I saw it.
Q. I suggest that it must have been obvious to sou that Mr Gaydamak
had not completed the dates at the front o f the agreement because he
did not intend that agreement to be immediately binding.
A. No, unless he wanted to deceive me. unless 1 don't know. It's clear
to me that when you sign and there is a date next to the signature, then
this is the date which is valid. In the meantime, there is a trial against
me when there is no agreement and no signature and in this ease there
is an agreement and it's signed and dated.
Q. You say that General Kopelipa told you that Mr Gaydamak had no
money and couldn't even par his hotel bill.
A. Yes. that his financial condition is difficult.
Q. I suggest to you that that is absurd and General Kopelipa never
said anything o f the sort.
A. I say what Ip ersonally heard. It’s your right to think differently".
Approved Judgment
Gaydamak v. Lcvicv
143. Mr David Wolfson Q.C., counsel for Mr Gaydamak, started his cross-examination of
Mr Leviev by asking him about paragraph 126 of his 37 statement in which he said he
had told General Kopelipa on Thursday 4Ih August 2011 that he would be willing to
sign an agreement with Mr Gaydamak for a full and final mutual waiver of all legal
claims, subject to two conditions: "a. there would be no payment whatsoever involved;
It was put to Mr Leviev
and b. I would not have to meet Mr Gaydamak in person ".
that, since condition (b) meant that he would not meet Mr Gaydamak, and since he
knew General Kopelipa was meeting Mr Gaydamak, he must have been content for
General Kopelipa to transmit his two conditions to Mr Gaydamak on his behalf. Mr
Leviev’s responses were evasive and unhelpful. He said, in essence, that he did not
care what General Kopelipa did and that he was not acting on his behalf. As it seemed
to me. however, it was plain and obvious that Mr Leviev knew and expected that
General Kopelipa would carry his two conditions to Mr Gaydamak, so that, to that
extent anyway, he gave General Kopelipa some authority to represent him. I will return
to the legal ramifications of this evidence, but the facts arc at least clear, despite Mr
Leviev’s unwillingness to accept them.
144.
Thc start of Mr Leviev’s cross-examination had another feature that I at first thought
unfortunate. In the following exchange, Mr Leviev confirmed that he intended to sue
Mr Gaydamak after these proceedings:-
"O. When you told General Kopelipa [on 4“' August 2011] that you intended
to bring your own legal claim against Mr Gaydamak, the fact is that you had
not started any such claim, had you?
A. Ni>.
Q. You have still not started any such claim against Mr Gaydamak, have
you?
A. I intended, after the court here, to rue him.
Q. Is that still your intention?
A. Q fcourse”.
145.
This evidence seems to fly in the face of the substance of the Settlement Agreement that
Mr Leviev is seeking to rely upon in these proceedings. If he succeeds in establishing
the validity of the Settlement Agreement, all claims between him and Mr Gaydamak
will be compromised – yet, Mr Leviev nonetheless, said that he intended to pursue
claims against Mr Gaydamak after these proceedings. I asked Mr Leviev at the end of
his evidence about the apparent contradiction. He explained, and I accept, that he had
meant that he would only sue Mr Gaydamak if he did not succeed in upholding the
Settlement Agreement in these proceedings.
146. Mr Leviev was asked many questions about the events that led up to the signing of the
Settlement Agreement. The closest that he came to accepting that he had been asked to
pay Mr Gaydamak was in the following passage:-
“O. Did you ask yourself what General Kopelipa had promised Mr
Gaydamak to get him to sign ?
Approved Judgment
Gaydamak v. Lcvicv
A.
I didn’t ask. After we signed, General Kopelipa told me that Mr
Gaydamak’s condition iW/.s quite difficult, he was in the hotel, a new hotel,
Talatona, and that he lost his assets. We agreed that ice owe him nothing
we know that we owe him nothing, but i f you want to help him with
something, as a human being 1 said, as 1 said before, “I will not even give
charity fo r children who got hurt by
him a dime. I’m willing to donate to a
.. And General Kopelipa
landmines, and I’m happy to donate to this charity,
smiled and that was the end o f the story.
Q. Although I think, to be fair, you say you didn’t actually make that
donation.
A. No, they never got hack to me”.
147.
In respect of the signing of the 2001 Agreement. Mr Leviev said the following in cross-
examination
“When Mr Gaydamak entered with me, he war very nervous,
very stressed. He said that, “I introduced between you and the President qf
Angola. You became famous in the world and you have only good publicity
on you and 1 suffer, and 1 also want to be a partner in this venture”, and he
which I assume
gave me a paper in my hand, that 1 assumed it’s the same
it’s the same paper that he gave me at the end when he claimed that he had
found it”.
148.
Shortly thereafter, Mr Leviev gave an important answer in a rather less arrogant and
self-assured manner than he had previously spoken. He said:-
“I made huge efforts not to fight with Mr Gaydamak because in our
discussion Mr Gaydamak let me understand — more than hinting only, he let
me understand that in the same irui’ that he got me into Angola, ju st as
quickly I can find myself out o f Angola. This was the very clear hint bv Mr
Gaydamak. Because I didn’t want my business to be affected and I knew Mr
Gaydamak’s abilities, that he can damage like he eventually did, I told Mr
Gaydamak, “Arkady, you should not be angry, [partners] we shall not be”.
… Then he said that he has lots o f expenses, because he is veiy active in
Angola and he needs to do some social projects and it costs him money, and
1 contribute nothing to Angola. 1 said: i f this a problem, 1 from time to time
willing to pay
am willing to pay. And then he smiled, and this is why we finished it
amicably in good spirit”.
149. Mr Leviev then strenuously denied having used the term “mazel u’brucha”. I found his
denial unconvincing, despite what I have said about Mr Dagan’s evidence on this point.
And, having seen Mr Gaydamak give evidence. I found it wholly implausible to think
that Mr Gaydamak would have smiled and concluded the meeting amicably had he been
lectured by Mr Leviev and had Mr Leviev refused to sign his proposed agreement. Mr
Gaydamak would rather, I think, have reacted in a volatile and aggressive manner.
There would, in short, have been no smiles and no shaking of hands. It was in this
aspect of Mr Leviev’s story that, I think, lay the key to what really happened.
Approved Judymcnt
Gaydamak v. Lcvicv
150. Mr Leviev denied allowing any of the partners in Ascorp to remove cash from the
office in Luanda, because, he said, the cash was brought in to Angola for the sole
purpose of buying diamonds on the informal market. He did not deny, however,
making some payments to Mr Gaydamak’s order. There was much questioning about
Calsen’s invoices.
I was unable to accept Mr Leviev’s evidence that any of them
related to real sales of polished diamonds. I have little doubt that Calsen’s invoices (or
at least some of them) were raised by LLD Diamonds (Mr Leviev’s company) with his
knowledge, to conceal various large payments to Mr Gaydamak’s order.
151. On the last day of his cross-examination. Mr Leviev was questioned extensively about
the two agreements dated the 7h and 1 llh October 1999. The thesis of the questioning
was that the 7Lh October agreement was the pre-cursor to the 1 l Lh October agreement,
and that Mr Gaydamak had signed the 7″’ October agreement, because he was to be Mr
Leviev’s silent partner in the arrangements that were eventually concluded for the
creation of Ascorp. There are numerous discrepancies and unanswered questions in the
two agreements, but, ultimately, I have come to accept that thesis. I was unable to
accept his evidence in the following passage where he suggested (as he had in his
statement) that Mr Gaydamak signed the 711’ October agreement as a representative of
the Government of Angola: –
“Q. … You will see that Mr Gaydamak has signed this memorandum
Price on that page, as have you. He signed this memorandum because
he was integral to the setting up o f ASCORP. As 1 have been putting to
you, this document is the precursor to the setting ip of ASCORP. That
is correct, is it not?
A. No. Mr Gaydamak signed as a representative o f the government.
It is a fact that on the document that was signed with TAIS, the
determined document with TAIS. Gaydamak did not sign that
document.
Q. The State o f Angola is not a party to this memorandum o f
understanding, is it?
A. That is why Mr Gaydamak sigped it as a representative qfthe state.
He wanted something to be proud o f to show that he also contributes
to the state, he’s not only receiving and making profits o f billions, he is
also contributing. He brings investors like Leviev, who will pay more
tax.
O. Everybody else who signed this document iwf/.s’ signing because they
had an economic stake in the venture which the document sets out, and
that is as true fo r Mr Gaydamak as it was true fo r everybody else.
A. I repeal, when ire draft an agreement, everything is clear in the
agreement. Mr Gaydamak does not appear here as Welox or ASCORP
or atty party to this matter. He signed. 1 don’t remember exactly why
he signed, but I say that if he signed, it’s only because o f the matter o f
the tax, to show to the President o f Angola that his — allegedly his
achievement, while it has already been submitted to the President, the
whole reform in the market.
Approved Judgment
Gaydamak v. Lcvicv
O. Mr Leviev. you have just said that you don’t remember why Mr
Gaydamak signed, and you are offering a possibility as to why he
signed.
A. I remember — I certainly remember that Mr Gaydamak did not sign
this document as a shareholder”.
152. Mr Leviev was not the kind of man to foiget this kind of detail. I am sure he knew very
even if it did not come to
well why Mr Gaydamak signed the 7″‘ October agreement
fruition – and that was because he (Mr Gaydamak) was. in 1999, going, in some form,
to be Mr Leviev’s partner.
153.
I did not find Mr Leviev an entirely reliable witness. He displayed an arrogance, even a
contempt, for Mr Gaydamak, which ill-became him since he had been so closely
involved with him in 1999 and 20(X). Having admitted to paying Mr Gaydamak
unspecified sums for unspecified reasons. I think his denial of any partnership
arrangement of any kind was simply implausible and frankly unbelievable. Hard-nosed
businessmen like Mr Leviev do not pay out sums in the hundreds of thousands of
dollars for no reason, and Mr Leviev certainly did not pay Mr Gaydamak without any
obligation to do so. All that said. I think Mr Leviev attempted to be truthful in relation
to peripheral matters that did not. as he saw it. affect his case. This will be relevant
when I have to decide the truth of what really happened in September 2000, December
2001 and August 2011.
Mr Jacques Zimmerman’s evidence
154. Mr Zimmerman is an Israeli lawyer who acts for Mr Leviev. He was also the Company
secretary for Africa Israel, and he accompanied Mr Leviev on some trips to Angola in
1998 and 1999. He was born in Brazil so that Portuguese is his first language. He also
speaks almost perfect English. In his witness statement, he denied absolutely that he
had had anything to do with the drafting of the 2001 Agreement as contended for by Mr
Gaydamak.
155. Mr Zimmerman was cross-examined extensively about his involvement in drafting the
2001 Agreement and the June 2005 MoU and other documents. He denied drafting the
2001 Agreement, saying that he could tell by reading it that he had certainly not drafted
it. This was not on tire basis that it was in English, but because it was. he said, simply
not his document. He also told me that he could not recall the other documents he was
asked about. I thought Mr Zimmerman was a careful and broadly truthful witness, and
I accept what he said.
I was entirely satisfied that he had not drafted the 2001
Agreement. The other matters he was asked about were entirely peripheral.
Ms Hortense Borenshtein’s evidence
156. Ms Borenshtein has been Mr Leviev’s personal secretary since 1997, and has worked
for him since 1990. In her witness statement, she denied receiving the 2001 Agreement
from Mr Leviev in December 2001 or hearing Mr Leviev say “mazel u’bracha” after
the meeting with Mr Gaydamak.
157.
In cross-examination. Ms Borenshtein admitted that she did not recall the meeting in
December 2001 at all. She said, tellingly I thought that there were meetings involving
Approved Judgment
Gaydamak v. Lcvicv
Mr Dagan, but she could not say when they were. She knew she had not chatted for 15-
20 minutes with Mr Dagan. because she had never held a 15-20 minutes conversation
with a person that arrived for Mr Leviev. Likewise, she said she knew that the words
“mazel u’bracha” had not been used, because such a thing was not usual and she did not
recall it.
158.
Since Ms Borenshtein did not. on her own admission, recall the meeting at all, I did not
find that evidence very compelling. It seemed to me that she could add nothing very
helpful to the existing accounts of what happened.
Mr David Mondshine’s evidence
159. Mr Mondshine is responsible for the finances of tire Federation of Jewish Communities
in the Commonwealth of Independent States (the “Federation”).
160. Mr Mondshine said in his statement that in September 1999, during a conference of tire
Federation in Ukraine. Mr Gaydamak accompanied Mr Leviev on a trip to the Ukraine
to visit one of the Jewish communities, and that “[fjollowing the visit, Mr Gaydamak
offered to donate I DO.()()() USD a month. From then on, 1 maintained regular contact by
telephone with Mr Gaydamak, asking and reminding him to pass along the donations,
in order to keep up with the plan ”. Mr Mondshine confirmed that such donations had
indeed been made.
161. Mr Mondshine also explain’d in detail in his statement how (he said in September
2000), a few days after Mr Putin had opened a Jewish Community Centre in Moscow,
Mr Gaydamak had become upset at the lack of recognition for him, and had agreed to
make regular donations to the Federation. He described these events in his statement at
paragraphs 16-23 as follows:-
“16. After the ceremony, Mr Gaydamak arrived at Mr Leviev’s home in
Moscow. The three o f us sat in Mr Leviev’s living room. Mr Gaydamak wn.s’
extremely upset due to lack o f respect shown to him (to his understanding)
during the Inaugural ceremony o f the new Jewish Community Centre. Mr
Gaydamak told Mr Leviev he thought his contribution to the Jewish
Community in Russia deserves proper acknowledgement, demanding to be
elected as President qfthe Federation o f Jewish Communities q f Russia. As
far 1 can recall, I had previously heard from Mr Gaydamak about his
that will give him more
exjtectatioiiv’
acknowledgements, though 1 had never previously heard such a resolute
demand.
to receive an official role
18. Mr Leviev did not reject the idea. Mr Leviev mentioned that in order to
justify the appointment with other donors, there would be a need fo r regular
donations, on a different scale.
19. Mr Gaydamak Uas made ve/T upset and reacted veiy irritably – leaving
the roam in anger. 1 became nervous and fearful about his future donations.
Moments later. Mr Gaydamak returned to the room and Mr Leviev tried to
calm him down. After having exchanged some words, it was agreed between
Mr Leviev and Mr Gaydamak that Mr Gaydamak would donate to the
Federation a sum o f 350,000 USD a month for a period o f two years and Mr
Approved Judgment
Gaydamak v. Lcvicv
Leviev would back his candidacy after he would complete what he had
committed to (hereinafter: “The Agreements”).
20. As far as I can recall, it was already rather late and 1 my wife was post
birth, taking care o f a baby and young children. 1 requested Mr Leviev’s
permission to go home, but Mr Gaydamak held me up asking me to stay with
him and Mr Leviev, as he would like to put the agreements in writing. We all
moved into Mr Leviev’s study (on the living room level), where Mr
Gaydamak took a blank piece o f paper o ff the printer and haillwrote (in
Russian) a document summarizing the “agreements” (the “Document “).
21. Mr Leviev and Mr Gaydamak signed the Document which wuts then put
in an envelope.
22. Mr Gaydamak proposed the envelope be deposited for safekeeping with
Rabbi Berel Lazar. Mr Leviev agreed, and I went home.
23 Mr Gaydamak did indeed transfer the donations to the community in
accordance with the agreements”.
162.
In cross-examination, Mr Mondshine accepted that he had. in effect, worked for Mr
Leviev since 1994, and that Mr Leviev’s Ohr Avner charity paid his salary. He
accepted that he had a close relationship with Rabbi Lazar in that he saw him every day
at prayers and worked with him also. He confirmed that Rabbi Lazar was in good
health (the implication being that he could, had he chosen, have given evidence).
163. Mr Mondshine had failed to provide any evidence of the alleged donations that were
made by Mr Gaydamak pursuant to the September 2000 Agreement, though he said that
he should have such evidence in his “personal records”. After he gave evidence, the
IRS returns for the Federation for the 3 years from July 2000 to July 2003 were
produced, but they did not show any donations by Mr Gaydamak before July 2001,
demonstrating the falsity of Mr Mondshine’s implied statement that Mr Gaydamak had
paid the US$350,000 per month from September 2000. In any event, it appears from
evidence produced after I reservedjudgment that these contributions are disputed.
164. Mr Mondshine was not cross-examined in detail on his evidence about the September
2000 Agreement and the proposal that it should be deposited with Rabbi Lazar. It was
simply put to him that there was no September 2000 Agreement and that his whole
story was incredible and untrue. Mr Mondshine was not a particularly impressive
witness. He seemed most concerned to support Mr I .evict in everything he had said.
Mr Valery Morozov’s evidence
165. Mr Morozov is the Chief Executive Officer of Ruis Diamonds Ltd. and head of Mr
Leviev’s diamond related activities in Russia. His witness statement concerned his
involvement of the negotiations for the June 2005 MoU; Mr Leviev had asked him to
approach the “Angola Group” and Mr Gaydamak to begin negotiations for that MoU.
166.
In cross-examination. Mr Morozov said that, in negotiating the June 2005 MoU. he had
obtained instructions from Mr Leviev. He accepted also that the term “Partner A” used
to denominate the person with whom Mr Leviev would share ownership of DRT in
any outer way, io ivir oen natm or to any person on ivir yjayaumuK s oenaij.
Mr Ben Haim has given evidence in this case that on at least five occasions
during 2002 or 2003 he collected sums o f between $100,000 and $500,000
from the ASCORP office in cash. He says that instructions to collect that
cash came from you. from Mr Zacharin, from Mr Ramot and from Mr
Gaydamak. I suggest to you that that is precisely what happened, and Mr
Ben Haim is being truthful when he says that.
A Not hue.
Q. You called Mr Ben Haim, and he came to the ASCORP office to collect
the cash which we agree was held at the office.
A
I never called Mr Ben Haim. The cash was kept in ASCORP’s office, but
they kept it. it was in a safe and I couldn’t do with this money on my own
whatever I want to do.
0. -4,s Mr Dagan says. you also sometimes prodded details for insertion into
invoices to be issued by a company called Calsen. That’s also correct, is it
not?
A. Never happened.
Approved Judgment
Gaydamak v. Lcdcv
O. Because you were Mr Leriev’s man on the ground in Angola, were you
not?
A. 1 guess I was, res. In Angola I was.
(). Why are you hesitant about it? I mean, you were, were you not?
A. Well, because the thing is that the invoice that you presented that was
shown to me was made by LLD. and LLD is a different company in Israel
and I was never part o f this part of business which is in Israel. So there’s no
reason why I should give invoice from Angola to — or figures to LLD to make
these invoices.
O. Unless, as Mr Dagan says, what you were talking about was payments to
be made by Mr Leviev to Mr Gaydamak under their agreement’?
A. Never. I was never involved with such payments”.
172. Mr Kramash’s evidence about his involvement in the Settlement Agreement was,
perhaps, more remarkable. He had received the calls for Mr Leviev from General
Kopclipa’s office on his mobile on 4lh August 2011, but had not heard or understood the
conversations they had (which was in Russian).
173. At the end of his cross-examination, the following exchange occurred:-
Q After that. Mr Leviev drew up a proposal to compensate Mr Gaydamak
for withdrawing his claims, did he not?
A. Not that I know about.
Q He prepared a written proposal to transfer shares in ASCORP to Mi-
Gay dam a k and gave that document to you.
A No. he didn’t.
(). In October 2011. you were prepared to hand over that document to Mr
Gavdamak, as you told Mr Sumbula.
A. No.
0. Mr Leviev decided at the last minute that that document should not be
handed over. That’s the truth, isn’t if?
A. There was no document like this, and 1 newer spoke with Mr Leviev about
this opportunity, possibility”.
Written evidence for Mr Leviev
174.
First and foremost amongst Mr Leviev’s written evidence is the witness statement of
Rabbi Lazar dated 15lh April 2012. Had he attended to give evidence, a statement from
such a prominent religious leader would have been formidable support for Mr Lcvicv’s
case. As it is. no satisfactory explanation has been offered for his non-attendance, nor
\ppro%ed Jud^menT
Gaydamak \ . Le\ ic\
for his unwillingness to give evidence by video link as many other witnesses did. The
force of his written evidence is. therefore. I regret to say, very much depreciated.
175.
Rabbi Lazar’s statement compliments Mr Gaydamak on his charitable donations to the
Federation, and then describes him as paranoid, prone to exaggeration, and hysterical.
He goes so far as to say that Mr Gaydamak “has the tendency to join together half
truths into lies, which he then ends up believing”.
176.
In paragraphs 16-21 of his witness statement. Rabbi Lazar deals with the crucial
question of the envelope as follows:-
“16. In section 92 o f his Witness Statement. Mr Gaydamak claims that in
December 2001. 1 confirmed to him that 1 had received some agreement
between him and Mr Leviev; he claims that I was aware that this was a
contract; and that Mr Gaydamak would allegedly work well with Mr Leviev,
and everything would be all right. I wish to emphasize that nothing o f the kind
ever took place. Mr Gaydamak is proving, once again, that he has a very rich
imagination.
/ 7. 1 do remember that during 2000 (and most certainly not at the end o f2001,
as claimed in Mr Gaydamak’s Witness Statement), shortly prior to the
relocation o f my offices to the new community building in Moscow. 1 received
a sealed envelope (to the best o f my memoiy, the envelope was blank, and it
was not marked with any markings). I was already running late, and I was
hurrying on to the next meeting which had been scheduled for me. ! was not
told at that time by anyone that the envelope contained an important
document o f any kind. To the best o f my memory, I was told that the
document inside the envelope had something to do with donations and that Rabbi
David Mondshine
who, as aforesaid, was responsible for the financial
was familiar
aspects, including the matter of donations to the Federation
with it and knew about it. As a result. I u-as not really bothered by the matter.
I also remember that Mr Leviev has told me (I cannot remember precisely
when) that the envelope contained a document comprising an undertaking
by Mr Gaydamak for the transfer o f donations. 1 do not remember where I
put the envelope in my office, but Ido remember that 1 have never opened it.
18. I wish to note that from an inspection o f the photocopies o f my Russian
passport from that time, one can see that between the dates o f November 15.
2001 and December 27, 2001, I was in Russia (seepage I o f the Appendix).
19. I also wish to note that 1 am not in the habit o f keeping documents o f a
commercial nature, and such conduct is also neither common nor customary.
20. During 2003 or thereabouts (I cannot remember precisely when), Mr
Gaydamak had words with me and asked for the envelope. I told Mr Leviev
about the request and 1 conducted a thorough search o f my office, however I
»cav unable to find the envelope. I had to tell M r Gaydamak that the
envelope was no longer in my possession. 1 believe that the envelope must
haw gotten lost during the relocation o f my office to the new community
building in Moscow, in late 2000 or early 2001.
\p proved Jud^inviil
Gaydamak v Le\ie\
177.
178.
179.
1X0.
181.
182.
1X3.
21. After 1 had given Mr Gaydamak my answer. Mr Gaydamak no longer
requested the envelope, neither in writing nor orally, up until March 2006″
(emphasis in original).
Apart from this evidence, Rabbi Lazar deals with other contacts with Mr Gaydamak
over the years, none of which is intended to redound to his credit. I have not found
much assistance in the details of these allegations.
Mr Leviev also relied upon a letter dated 3rd April 2012 from Mr Zakharin saying (hat
he and Mr Dagan were asked by Mr Gaydamak in December 2001 to assist him in
preparing the 2001 Agreement, and that he had asked his lawyer. Advocate Modan, to
prepare the document, which he did. Mr Zakharin says that neither he nor Advocate
Modan was in touch with Mr Leviev concerning the preparation of the 2001
Agreement. He also says that, later on. he asked Mr Gaydamak whether the document
had been signed and that “z7 was clear from his answer that the document had not been
signed”.
On 14’h March 2012. Advocate Modan wrote a letter to Mr Zakharin, upon which Mr
Leviev also relics, confirming that he had prepared and printed the 2001 Agreement “in
my office on 17 December 2011”, and sent by fax on that date to Mr Zakharin and Mr
Dagan.
Finally. Mr Leviev relies on a letter to him dated 25th April 2012 from Mr Grinshpon, in
which he denies sending funds in the name of Antanta to Mr Gaydamak.
The same point can be made about the non-attendance of these witnesses as I have
already made in relation to others. Mr Fenwick did, however, submit in closing, and I
accept, that the point is somewhat less powerful in relation to Mr Zakharin and
Advocate Modan, who have previously acted for or worked with Mr Gaydamak. It is,
perhaps, not surprising that they should wish to put their documents before the Court,
but not to attend to give evidence that is in direct contradiction to their former principal
or associate. Likewise, I did not think that the criticism that their documents had not all
been produced at once was particularly forceful, bearing in mind their previous
relationships with Mr Gaydamak.
Expert evidence
The parties agreed to admit the evidence o f two expert document examiners without
cross-examination. Mr David Browne, for Mr Gaydamak, examined Mr Dagan’s copy
of the 2001 Agreement and opined that it was not a copy of a received fax and had
never been through a fax process. He expressed the opinion in respect of the faxes
dated 13th, 16lh and 17’h December 2001 that they were not themselves received faxes
and had not been through a fax process.
Dr Audrey Giles, for Mr Leviev, made two reports. Her first report confirmed that Mr
Dagan’s copy of the 2001 Agreement was not a received fax. but was unable to say
whether it was a photocopy or laser printed document, or whether it had boon
subsequently transmitted by fax. Her second report confinned that the 13h, 16‘“ and 17′
December 2001 faxes were the result of fax transmissions (which is not inconsistent
with what Mr Browne said). She also found that there were impressions of Mr Troum’s
name and number on Mr Dagan’s manuscript notes.
\pproicd Judgment
The Law’
Gaydamak v. Lev icv
1X4.
This is a case that is primarily factual. I have heard a great deal of conflicting evidence,
It is useful to be reminded first of the
much of it about events many years ago.
principles that should be applied in dealing with cases where there is such a conflict.
Lord Goff in Grace Shipping v. Sharp & Co [1987] 1 Lloyd’s Law Rep. 207 said this at
pages 215-6:
“And it is not to be forgotten that, in the present case, the Judge was faced with
the task of assessing the evidence o f witnesses about telephone conversations
which had taken place over five years before. In such a case, memories may
very well he unreliable; and it is o f crucial importance fo r the Judge to have
regard to the contemporary documents and to the overall probabilities. In this
connection, their Lordships wish to endorse a passage from a judgment o f one
o f their number in Armagas Ltd v. Mundogas SA. (The Ocean Frost), [1985] 1
Lloyd’s Rep. 1, when he said at p. 57:
“Speaking from my own experience. I have found it essentia! in cases of
fraud, when considering the credibility o f witnesses, always to test their
veracity by reference to the objective facts proved independently o f their
testimony, in particular by reference to the documents in the case, and also
to pay particular regard to their motives and to the overall probabilities. It is
frequently very difficult to tell whether a witness is telling the truth or not;
and where there is a conflict o f evidence such as there was in the present
case, reference to the objective facts and documents, to the witnesses’
motives, and to the overall probabilities, can be o f very great assistance to a
Judge in ascertaining the truth. ”
That observation is. in their Lordships’ opinion, equally apposite in a case where
the evidence of the witnesses is likely to he unreliable: and it is to be remembered
that in commercial cases, such as the present, there is usually a substantial body of
contemporary documentary evidence”.
1X5.
Mr Wolfson has contended that there arc two grounds upon which the Settlement
Agreement should be set aside:-
i )
i i )
Because General Kopelipa was acting as agent for Mr Leviev and, therefore, Mr
Leviev is fixed with responsibility for any fraudulent representations that
General Kopelipa made, whether or not he (Mr Leviev) knew of that wrongful
conduct (sec Mullens v. Miller (1883) LR 22 Ch D 194, Goldrci. Foucard & Son
v. Sinclair [19IX] 1 KB 1X0, and BCCI v. Aboody [1989] 1 AC 923 at pages
972H-973A),
Because Mr Leviev knew or turned a blind eye to the fact that General Kopelipa
had made fraudulent misrepresentations to induce Mr Gaydamak to enter into
the Settlement Agreement before the Settlement Agreement was concluded (sec
Bainbriggc v. Browne (1881) 18 Ch D 188 per Fry J at page 197, RBS v.
Etridgc (No 2) [2002] 2 AC 733 at paras 40, 144 and 144 (per Lord Scott),
Logicrose v. Southend Football Club [1988] I WLR 1261 per Millett J at page
1261).
Approved Judgmenl
Gaydamak v. Leviev
1X6. Mr Wolfson argues then for two types of authority: actual and ostensible or apparent
authority. Dealing first with actual authority, he says that General Kopelipa was given
actual authority by Mr Leviev to convey Mr Leviev’s two conditions to Mr Gaydamak,
and (later) to obtain Mr Gaydamak’s signature on the Settlement Agreement.
Therefore. General Kopelipa must be regarded as having had actual authority to make
representations about payment (since one of the conditions concerned payment), and to
make whatever representations were necessary to achieve the mandated objective. The
cases relied upon in the latter respect are not entirely straightforward, because in the
common case of a bank mandating a borrower to obtain a spouse’s signature on a
mortgage of a matrimonial home securing business liabilities, the agency analysis that
was previously prevalent has now been replaced by the application of the doctrine of
notice (Barclays Bank v. O ’Brien [1993] QB 109 per Scott LJ at pages 137-139;
Barclays Bank v. O’Brien [1994] 1 AC 1X0 per Lorcl Browne-Wilkinson rejecting the
agency theory at pages 191 and 194). Mr Wolfson, however, contends that the agency
principles applied in one of the older cases of Kings North Trust v. Bell [19X6] 1 WLR
1 19 per Dillon LJ at pages 123-4 continues to be applicable, at least in a case of this
kind (sec also Colduncll v. Gallon [19X6] QB 11X4 perPurchas LJ at page 1206).
1X7. Mr Fenwick docs not wholly reject these submissions, but urges caution in three
respects.
i)
n)
First, as regards the authority to put forward Mr Leviev’s two conditions, Mr
Fenwick draws a distinction between an express authority to negotiate or agree a
transaction (as was alleged in the Ocean Frost), and authority to convey take it
or leave it terms (as he submits was the case here).
Secondly, as regards the authority granted to get the Settlement Agreement
signed, he says that the mortgage and surety cases are different, because the
documents arc themselves complex and require an explanation; in most cases, a
guarantee or a charge document will not show the nature of the debt being
guaranteed or secured, so the agent empowered to obtain the signature will he
expected to have to give some explanation, and if he gives a false explanation, it
is to be expected that the principal would be fixed with it. Here, however, the
draft Settlement Agreement was simple and self-explanatory.
iii)
Thirdly, he says that the Dubai Aluminium case infra (at paragraph 32 per Lord
Nicholls and at paragraph 130 per Lord Millett) expressly referred to the
relevance of the agent having his own interest or being on a frolic of his own.
1XX.
Both parties relied on Dubai Aluminium v. Salaam [2003] 2 AC 366, where the House
of Lords laid down the test to ascertain whether an act was within the scope of an
agent’s actual authority (per Lord Nicholls at paragraph 23 and per Lord Millett at
paragraph 122 and 129). The question is whether the alleged fraud was sufficiently
closely connected with the agency such that it could be fairly and properly regarded as
done by the agent in the ordinary course of his agency. Lord Nicholls said this in
paragraph 23: “Perhaps the best general answer is that the wrongful conduct must be
so closely connected with acts the partner or employee was authorised to do that, for
the purpose o f the liability o f the firm or the employer to third parties, the wrongful
conduct may fairly and properly be regarded as done by the partner while acting in the
ordinary course o f the firm’s business or the employee’s employment”.
kppnned Judgment
Gaydamak
Leviev
1X9.
in reliance
In the alternative, Mr Wolfson argues for apparent or ostensible autliority on the basis
that Mr Leviev represented by his words and conduct that General Kopelipa had actual
authority and Mr Gaydamak has relied on that representation.
In The Ocean Frost
[1986] AC 717. Lord Keith said this at page 777: “Ostensible authority comes about
where the principal, by words or conduct, has represented that the agent has the
requisite actual authority, and the party dealing with the agent has entered into a
contract with him
on that representation. The principal in these
circumstances is estopped from denying that actual authority existed. In the commonly
encountered case, the ostensible authority is general in character, arising when the
principal has placed the agent in a position which in the outside world is generally
regarded as carrying authority to enter into transactions o f the kind in question.
Ostensible general authority may also arise where the agent has had a course o f
dealing with a particular contractor and the principal has acquiesced in this course o f
dealing and honoured transactions arising out o f it. Ostensible general authority can.
however, never arise where the contractor knows that the agent’s authority is limited so
as to exclude entering into transactions o f the type in question, and so cannot have
relied on any contrary representation by the principal: see Russo-Chinese Bank r Li
Yau Sam [1910] AC 174. It is possible to envisage circumstances which might give
rise to a case of ostensible specific authority’ to enter into a particular transaction, but
such cases must he very rare and umtsual. Ex hypothesi the contractor knows that the
agent has no general authority to enter into the transaction, as was the position here.
The principal might conceivably inform the contractor that, in relation to a transaction
which to the contractor’s knowledge required the specific approval o f the principal, he
could rely on the agent to enter into the transaction only if such approval had been
given. In such a situation, i f the agent entered into the transaction without approval,
the principal might be estopped from denying that it had been given. But if is very
difficult to envisage circumstances in which the estoppel could arise from conduct only
in relation to a one-off transaction such as this one was”. (Sec also The Raffaclla
[1985] 2 Lloyd’s Rep. 36 per Lord Browne-Wilkinson at page 43 column 1. and First
Energy (UK) Limited v. Hungarian International Bank Limited [1993] BCLC 1409 per
Stcyn LJ at page 1421-3). Mr Fenwick submitted that ostensible authority was almost
impossible in the case of a one-off agent, such as General Kopelipa.
190.
Finally, in the recent case of Thanakham Kasikom Thai Chamkat (Mahachon) v. Akai
Holdings Limited (No 2)
(2010) HKCTAR 479 in the Hong Kong Court of Final
Appeal, Lord Neuberger (with the other Justices agreed) returned to both the questions
of ostensible authority and reliance. His helpful judgment was cited with approval by
Gross LJ in the English Court of Appeal in Paul Quinn v. CC Automotive Group
Limited t/a Carecraft [2010] EWCA Civ 1412. Lord Neuberger said this in relation to
reliance:-
“52. In a commercial context, absent dishonesty or irrationality, a person
should be entitled to rely on what he is told: this may occasionally produce
harsh results, but it enables people engaged in business to know where they
stand. As to principle, apparent authority is essentially a species o f estoppel
by representation (see per Diplock LJ in Freeman & Lockyer [1964] 2 QB
480. 503, cited above, and per Brennan J in the High Court of Australia in
Northside Developments Pty Ltd v. Registrar-General (1989 1990) 170 CLR
146, 173-4). In the field of misrepresentation, it is clear that “it is no defence
to an action fo r rescission that the representee might have discovered its
Approved Judgment
Gaydamak v. Leviev
falsity by the exercise o f reasonable care” – per Chitty on Contracts (3(F
per Chitty on Contracts (30
edition) para.6-039 and the cases cited in footnote 190. Even more in point,
there is this passage in Halsbury s Laws (4th edition reissue) Vol !6(2),
para.1072. dealing with estoppel by representation: “If … [the party
contending that he relied on the representation] really has relied upon its
truth, it is no answer to say that, i f he had thought about it. he must have
known that it was untrue; the representation itself was what put him off his
guard. I f the representation is clear and unequivocal … he is under no
obligation to make investigation or inquiry to ascertain whether it is true. ”
62 1 conclude that it is open to the Bank to rely on Mr Ting ‘s apparent
authority (if he had such authority) unless the Bank’s belief in that
connection was dishonest or irrational (which includes turning a blind eye
ami being reckless)”.
191.
Though the parties placed hugely different emphasis on tire authorities, I did not divine
much difference of substance between them. This was confirmed by the fact that they
had broadly agreed issues I 7-24 (as set out above – subject to some minor changes 1
have made), which reflect the legal position as I have summarised it. Ultimately, as I
have already said, this case turns on the facts.
The 2001 Agreement
192.
193.
194.
Issue 1: Did Mr Zimmerman or Advocate Modan prepare the 2001 Agreement?
1 have considered the competing evidence on this point in some detail. Although 1 am
not sure that the point is, in itself, determinative, I have reached the clear conclusion
that the 2001 Agreement was drafted by Advocate Modan, and that Mr Zimmerman had
little or nothing to do with it. One of the most important reasons for this finding is that
Mr Dagan’s affidavit, when he was first asked about these events, said that “at the end
o f 2001, Mr Gaydamak presented me with a draft copy o f the contract between him and
Mr Leviev, prior to its signature, and requested that I will review the document”. Mr
Dagan denied the truth of this statement, but I think what he said was correct, and
reflected the veracity of Advocate Modan’s documents.
I also think that the suggestion that Advocate Modan, as a professional lawyer, would
have conspired to manufacture 3 forged faxes and a forged date stamp is simply
unthinkable – and wholly implausible on the facts of this case. The exercise would
have been far from straightforward so long after the event, and what I know about
Advocate Modan’s conduct docs not suggest to me that it is something he would have
done. 1 know that I have heard evidence that Mr Zakharin has somcanimus against Mr
Gaydamak, but I do not think Mr Zakharin could have produced these materials without
Advocate Modan’s intimate involvement.
In addition. I found Mr Zimmerman a reliable witness and I accepted, in particular, that
the 2001 Agreement was simply not his document.
I am not quite sure why Mr
Gaydamak was so adamant that he had had nothing to do with the drafting
particularly since the document is as one-sided his way as the Settlement Agreement is
one sided in Mr Leviev’s favour. Having seen Mr Leviev give evidence, it would be
nothing short of remarkable, I think, if he had given instructions for such a document to
Vpprovcd Judgment
Gaydamak v. Leviev
be drafted.
Ironically, however, this observation does not lead inevitably to a
conclusion on whether the 2001 Agreement was signed, for reasons that I shall come to.
Issue 2: Was a copy of the 2001 Agreement faxed to Mr Dagan on 17h December
2001′?
For the reasons. I have already given. I am satisfied that a copy of the unsigned final
version of the 2001 Agreement was faxed from Advocate Modan’s office to Mr Dagan
on 17lh December 2001. This makes it most likely that, although the document is dated
at the top with 13′” December 2001, it was more likely signed, if it was signed, on or
after 171″ December 2001.
Issue 3: Was each of the 15 alleged payments to Calsen made?
Mr Gaydamak relied on 15 payments allegedly made to Calsen at the behest of Mr
Leviev between 6″1 December 2001 and 10″ December 2002 varying in amount
between US$599,649.96 and US$3 million. The early payments seem to have been the
subject of the email traffic between Mr Dagan and Mr Mantel w hich I have set out in
the chronology above. I have no doubt that some of these payments were made by LLD
Diamonds, on behalf of Mr Leviev, to Mr Gaydamak in respect of their business
interests in Angola. I have also no doubt that none of the payments, even the first, was
in respect of a genuine sale of polished diamonds. Indeed, Mr Leviev accepted that he
had made payments to Mr Gaydamak in the same period in respect o f “financial aid for
the purpose … o f advancing projects in Angola in which he was involved” on the basis
that he “understood perfectly well that underlying these requests was the implied threat
that Mr Gaydamak could make my business life in Angola l evy difficult”.
Mr Fenwick relied on the fact that the Bank of Cyprus documentation did not provc that
the Calsen payments (except the first) emanated from Mr Leviev, since the companies
like Wellfin Corporation, and Marshall Trading LLC. had not been shown to be
connected with Mr Leviev. This is not, in my judgment, enough to prove that the
payments were not made by Mr Leviev in the face of the emails and Mr Lcvicv’s own
admission that he made payments (albeit smaller ones) to Mr Gaydamak. It may be that
some of the payments were in respect of food, as Mr Fenwick sought to establish in
But that does not mean that they all were.
cross-examination. But that does not mean that they all were. The evidence is
relatively clear, in my judgment, that Calsen was one route through which Mr Leviev
paid Mr Gaydamak.
I do not think that I need, for the purposes of resolving the main issues in this case,
decide precisely which Calsen payments were actually made at Mr Lcvicv’s behest, and
which were not. I am satisfied that some of them (including the first) were indeed made
at Mr Lcvicv’s instigation to Calsen in order to satisfy Mr Lcvicv’s perceived
obligations to Mr Gaydamak.
Issue 4: If so. was each of those payments made, directly or indirectly, by Mr Leviev?
1 have already answered this question, so far as is necessary. Mr Leviev attempted to
distance himself from the Calsen payments by suggesting that he had no company
called “LLD Limited”, and that his company was “LLD Diamonds Limited”. 1 am
satisfied, as I have said, that some of the 15 payments to Calsen were made by entities
controlled by Mr Leviev or by entities acting at his direction. I do not have enough
195.
196.
197.
198.
199.
Xpproved .ludpmenl
Gaydamak v Leviev
evidence to make specific determinations in respect of each payment and each entity
and there is no need for me to do so.
Issue 5: Were further payments made by Mr Leviev to Pusan pursuant to the 2001
Agreement?
200.
This issue disappeared during the trial, when the letter of request issued to the Spanish
Court (on Mr Gaydamak’s application) produced Pusan’s bank statements.
It was
apparent from those statements that no large payments had been made by Mr Leviev to
Mr Gaydamak, as Mr Gaydamak had thought.
201. Mr Wolfson submitted, and I accept, that these events did not count against Mr
Gaydamak, as he had obviously mistakenly thought that payments had been made to
Pusan, when they had not. Otherwise, there would have been no point in his having
taken pro-active steps to obtain the bank statements by obtaining a letter of request.
There would have been no point in obtaining the letter of request if he had known that
no payments were made.
Issue 6: Were further payments made by Mr Leviev to Antanta pursuant to the 2001
Agreement?
202.
There is no hard evidence that such payments were ever made,
Mr Gaydamak’s
evidence that they were is not reliable, bearing in mind what he said about the payments
to Pusan. It does not seem to me that I can find, on a balance of probabilities, that
payments were made by Mr Leviev to Antanta. Mr Grinshpon denies arranging this in
his written evidence.
203. Again. 1 do not think that it matters overall whether particular payments arc or arc not
established. For the reasons I have given. I am sure Mr Leviev made some payments –
he admits as much – precisely which does not. I think, matter.
204.
205.
206.
Issue 7: Were payments made by Mr Leviev pursuant to the 2001 Agreement?
I do, however, also accept Mr Ben
I have already answered this question above.
Haim’s evidence that cash payments were made to Mr Gaydamak from the Ascorp
offices in Angola. Mr Fenwick suggested that this was implausible because of the
existence of the other shareholders in Ascorp. That would undoubtedly be the case in a
well-regulated European business environment; but I do not think the same approach
can be assumed in Angola. I accept Mr Gaydamak’s evidence as to how things worked
in Angola, and I am sure that he took money from Ascorp when he wished, by
agreement with Mr Leviev.
Issue 8: Did Mr Gaydamak and Mr Leviev sign the 2001 Agreement?
I should perhaps start my consideration of this issue by saying something about the
specific events that are alleged to have surrounded the meeting between Mr Gaydmak
and Mr Leviev in December 2001 at which the 2001 Agreement was allegedly signed.
Ills common ground that Mr Gaydamak met Mr Leviev at his office and that Mr Dagan
waited outside.
It is also common ground that the two men considered the 2001
Agreement document and that Mr Gaydamak sought to procure Mr Lcvicv’s agreement
to it. When they emerged from the meeting, Mr Gaydamak and Mr Dagan have made
\pproved .ludamcnl
Gavdamak v , b elief
much in the evidence of the alleged exchange of the greeting “mazel u’bracha”. On the
evidence. 1 have heard. I am quite satisfied that the greeting was used. Mr Fenwick
submitted, in his closing, ingeniously I thought, that if these words were said, they must
have referred to an oral contract, not a written one. So. he argued, it may be that they
were referring to Mr Lcviev’s agreement to contribute to Mr Gaydamak’s projects in
Angola (which was what Mr Leviev accepted he had said he would do) rather than to
the signature of the 2001 Agreement. Having seen Mr Gaydamak, 1 do not think he
would have been exchanging any kind of pleasantry with Mr Leviev if he had refused
his demand to sign the 2001 Agreement. Mr Leviev’s treatment of the point was half
hearted. and I equate his acceptance of the exchange of pleasantries with the use of the
“mazel u’bracha” greeting. Ms Borenshtein did not add anything, and despite my
scepticism about Mr Dagan’s evidence and Mr Gaydamak’s evidence generally, I
accept what they said on this point.
207.
This brings me to the core reasons why I am satisfied that the 2001 Agreement was
signed at the meeting between Mr Leviev and Mr Gaydamak in December 2001. They
may be briefly summarised as follows:-
i)
ii)
iii)
It is quite clear to me from Mr Gaydamak’s evidence, and indeed from Mr
Lcvicv’s evidence, that Mr Gaydamak was more politically influential in
Angola in 1998 than was Mr Leviev. Mr Gaydamak had direct access to the
President and Mr Leviev did not. That was important in Angola at that time.
This docs not mean that Mr Leviev did not have an interest in the Catoca mine
before he met Mr Gaydamak, but that interest did not put him in a position to
obtain the exclusive right to buy Angolan diamonds.
1 am satisfied that it was indeed Mr Gaydamak who conceived and developed
the idea of the establishment of Ascorp. and it being granted sole purchasing
rights. This was bound up with his provision of security services through SCG.
and could not have been brought to fruition without the President’s say so.
Thus. I am also satisfied that Mr Leviev had Mr Gaydamak to thank for his
being granted an interest in Welox. It is surprising that, in taking credit for the
idea and the execution of the idea. Mr Leviev omits to mention the roles of
Messrs Laniado and Goldberg. This demonstrated to me that he was re-writing
the history, leaving some of the crucial characters out of the story. I found that
approach consistent with his arrogance, upon which I have already commented.
I have already found that Mr Leviev paid Mr Gaydamak in various ways both
before after the 2001 Agreement. I do not think he did so out of (he goodness of
his heart, nor in order to avoid trouble. I think he did so because he had some
kind of loose partnership arrangement with Mr Gaydamak that probably
crystallised some time around the 71′ and 1 l lh October agreements, when Mr
Gaydamak decided for whatever reason that he did not wish to appear on the
documents as a shareholder in Welox. Mr Gaydamak is a volatile and impulsive
character and I do not think I need to speculate on his motives. I am sure they
were well understood at the time by Mr Leviev.
iv)
Nor do 1 think 1 need to detenninc precisely the nature of the partnership
arrangements that the two men made in 1999. The fact is that Mr Leviev knew
that he owed Mr Gaydamak money for the introduction that led to his being a
\ppriived Judgment
Gaydamak v. Leviev
V )
party (indirectly) to the 1 I”1 October agreement. That remained the position
when Mr Gaydamak presented him with the 2001 Agreement for signature.
I am sure that it was indeed Mr Gaydamak that presented Mr Leviev with the
2001 Agreement for signature.
I am equally satisfied on the balance of
probabilities that he signed it. I think he did so, because he did not expect it to
be formally relied upon, but to be used rather like an insurance policy. That is
why the eccentric idea of depositing it with a mutually trusted Rabbi was
devised. Despite the fact that Mr Gaydamak and Mr Leviev were disassociating
their business interests at that time, they had not fallen out. They were, like
many businessmen, able to shout at one another one day and enjoy each other’s
company the next – without seemingly bearing a grudge.
The grudges. 1
without seemingly bearing a grudge.
suspect, arose much later for reasons that I do not think have really been
It is not clear when precisely Mr
mentioned in the evidence for either side.
Leviev stopped paying Mr Gaydamak, but it was probably in or about 2003.
They then tried to patch up their Angolan business dealings by entering into the
June 2005 MoU. but that did not w’ork. and bad feeling seems to have grown
from then onwards.
It may have been partially caused by the cessation of
payments and the failure to agree the 2005 MoU. I know not.
vi)
1 am conscious that I have not accepted either side’s evidence in its entirety, but
I generally prefer the story told by Mr Gaydamak concerning the 2001
Agreement.
It accords far more closely with those few contemporaneous
documents we have: the 7lh and 1 Th October agreements, and the Calsen
payment documents, in particular.
208.
In reaching this conclusion. I have taken full account of the points already referred to
and also to the following specific arguments advanced by Mr Fenwick in closing:-
i)
ii)
It is true that, on 16’h December 2001, Mr Gaydamak was instructing his lawyers
to write to Mr Leviev demanding an apology for the article in the Marker
newspaper. Such an action seems to be at odds with Mr Gaydamak having just
entered (or being just about to enter) into an agreement with Mr Leviev to
receive 50% of his Angolan business proceeds. But Mr Gaydamak is not a
normal type of person – and I have been left wondering if he would truly sec a
conflict. He would sec himself by his own lights, as simply vindicating his
various rights. More significantly, perhaps, Mr Leviev must have been upset to
receive Mr Gaydamak’s letter of 6th December 2001. But ultimately, I do not
think that the existence of this ongoing correspondence can be determinative as
to whether or not the 2001 Agreement was signed between the 13lh and 17lh
December 2001 or thereabouts.
The fact that Mr Leviev said that he would not have signed any agreement in
English without advice from his lawyers – and that Mr Gaydamak said that he
I accept that Mr Leviev is a more cautious
knew this to be the case.
businessman than Mr Gaydamak, but that does not mean that he would not sign
anything without advice. If, as I have found, he had been paying Mr Gaydamak
large sums of money in cash and had just sent a large sum to Calsen. he was
fully aware of his deal with Mr Gaydamak, and the fact that their relationship
had cooled and needed to be formalised. In addition, as I har e also said. 1 do
not think cither side expected the 2001 agreement to be relied upon in the usual
L ip rm ed Judgmenl
Gaydamak’ 1 eviev
sense; it was a kind of insurance policy: I will return to the argument that it is
not binding for an absence of intention to create legal relations. Moreover, as I
have already indicated, I do not accept that Mr Leviev finds as much difficulty
understanding English as he maintained.
1 do not think that there is anything surprising in Mr Gaydamak’s various
attempts to obtain diamond concessions through Sunland and other companies
between 2003 and 2005. Mr Leviev had stopped paying him, and he wanted to
get back in the action. The fact that he had the 2001 Agreement lodged with
Rabbi Lazar as an insurance policy was not easily going to help him in terms of
hard cash. If he could get a new deal with Mr Leviev (in the form of the 2005
MoU), that would be far better than trying to enforce the 2001 Agreement.
Moreover, it is not to be forgotten that he was by this time in the thick of
Angola-gate, and finding it far more difficult to operate freely as he had before
December 2001.
The fact that Mr Gaydamak may not have needed obscurity before the issue of
the international arrest warrant against him in December 2001 is not a strong
argument in Mr Lcvicv’s favour for the reasons I have already tried to give.
The fact that Mr Gaydamak did not tell me the truth about the drafting of the
2001 Agreement has puzzled me. But in the end. I think it goes nowhere. It is
absurd to judge the parties in this case by the same standards as one might
consider the evidence of partners in a firm of City of London solicitors. One
untruth says nothing about the likelihood or unlikelihood of something else
being truthful – as is well known in criminal proceedings.
For the reasons that I will come to under issue 9. I do not accept Mr Lcvicv’s
and Mr Mondshinc’s evidence concerning the September 20(X) Agreement.
This makes it more likely, though by no means certain, that it was the signed
(rather than an unsigned) version of the 2001 Agreement that was lodged with
Rabbi Lazar.
iii)
iv)
v)
vi)
209.
In all the circumstances, as I have said. I think that Mr Leviev did indeed sign the 2(X) 1
Agreement and lodge it with Rabbi Lazar. It was convenient for Mr Leviev, but hardly
coincidental I think, that Rabbi Lazar lost or destroyed the envelope. Had he not done
so. 1 am sure he would have been happy to provide his oral evidence to the C ourt. After
all. he was content to discuss the matter on Israeli television.
Issue 9:
Was Rabbi Lazar given for safekeeping (a) a signed copy of the 2001
Agreement or (b) a document recording Mr Gaydamak’s agreement to make
contributions to the Federation?
210.
In the light of my existing findings, I need only consider under this heading whether
there ever was a September 2000 Agreement. It is to be noted that no mention was
made of such an agreement until very late in the day. Advocate Fisher wrote formal
letters in 2006 to Mr Leviev and Rabbi Lazar, but was not told anything, let alone that
Mr Gaydamak was mistaken in thinking there was a business agreement lodged with
the Rabbi, and that what had been lodged was an agreement to pay money to charity.
\pproved Judgmenl
Gaydamak a Leaiev
211.
In closing. Mr Fenwick relied on an email dated 22″1 April 2011 from Mr Mantel to Mr
Dagan in which he said that he had remembered that “ererr month ire transferred
S400.000 to a yeshiva in New York. I have a feeling that it is connected with that Rabbi
with whom the contract “that has disappeared” was deposited … ’’. Mr Fenwick says
that this is close to the $350,000 that Mr Leviev says that Mr Gaydamak promised to
pay to the Foundation in the September 2000 Agreement
and therefore supports its
existence.
212. As I have said also, on the last day of the triaL Mr Leviev produced the IRS returns of
the Federation, which showed (on their face) that, between August 2001 and July 2002,
Calsen had contributed US$3,199,855 in that period. The accounts for the years before
and after showed no donations that could be traced to Mr Gaydamak. Mr Fenwick
relied on this evidence as corroborating what Mr Mantel had said, and supporting the
conclusion of the September 2000 Agreement. For my part, it docs not seem to me that
these figures go anywhere towards supporting the conclusion of the September 2000
Agreement. Had that agreement been reached, Mr Gaydamak would, presumably (as
Mr Mondshine said he did), have started donating $350,000 per month to the Federation
from September or October 2000, yet the figures only show donations in (he year from
July 2001.
213. Whilst I am sure that Mr Gaydamak wanted to achieve a higher status in the Jewish
community, and that he discussed doing this with Mr Leviev and that donations (to
some entities) were discussed and indeed made, I cannot accept that, in September
2000, they entered into the kind of formalistic agreement that Mr Leviev and Mr
Mondshine describe. The $350,000 per month donations to the Federation do not seem
to have been made immediately after September 2000 in any event. And whilst it might
be marginally more likely that one would deposit an agreement to give to charity with a
Rabbi than a business agreement, in the context of these parties, either seems to me to
be possible. After considering all the available evidence on the point, I do not think
that the September 2000 Agreement was made, nor do I think it was deposited with
Rabbi Lazar. I think the whole episode is a story based on some real facts concerning
charitable events and Mr Gaydamak’s enthusiasm to be accepted and to gain the
Presidency of the Lubavitch community in Russia. I regret to say that the story seems
to me to have been manufactured to deal with the unfortunate position, from Mr
Lcvicv’s point of view, that Rabbi Lazar accepted on Israeli television that he had
indeed been given an envelope for safe keeping by Mr Leviev and Mr Gaydamak.
214. As 1 have already said, in my judgment it was a signed copy of the 2001 Agreement
that was lodged with Rabbi Lazar.
Issue 10: Docs the 2001 Agreement represent a concluded and enforceable agreement
between Mr Gaydamak and Mr Leviev?
215.
Two pleaded questions have been raised under this heading: first, whether there was
any consideration on the face of the 2001 Agreement passing from the promisee Mr
Gaydamak, and secondly, whether the 2001 Agreement is too uncertain to be enforced.
216. As for consideration. Mr Wolfson relied on clauses 6. 7, 8 and 11. Mr Fenwick
submitted that, since the 2001 Agreement was premised on Mr Gaydamak and Mr
Leviev already having half shares in the businesses “held end conducted” by Mr Leviev
in Angola and Zaire, clauses 6 and 7 merely confirmed Mr Gaydamak’s existing half
Approved Ju do merit
Gaydamak v. Leviev
share or a greater interest (as to the first US$500,000), which cannot amount to
consideration moving from Mr Gaydamak. 1 agree. But M r Fenwick had less
convincing arguments in relation to clauses 8 and 11. As it seems to me both those
clauses do indeed provide formal consideration for the 2001 Agreement. Under clause
8, each party grants the other a right o f “first o ffe f, which even if not a formal option,
at least looks like a right to be given the first opportunity to purchase the other’s share.
The fact that there might be argument as to the precise nature of that right does not
seem to me to detract from the proposition that it constitutes consideration moving from
each party. Under clause 11, both parties are enjoined to: “treat all information related
to their business relations, the assets and activities at issue as well as this Letter o f
Agreements as strictly confidential and shall not disclose any details related to any o f
them to any third party”, but Mr Gaydamak is given the sole liberty to “disclose his
interest in the said assets and activities, and to make use o f this Letter for preserving
his rights herein”. Whilst the second nart of clause 1 1 certainlv detracts sinnificantlv
though that agreement is, as Mr Fenwick submitted, extremely one sided,
217.
218.
The pleaded argument that the ternis of the 2001 Agreement are too uncertain to be
enforced seems to me to be doomed to failure. The terms may be hard to construe, and
may even invite litigation, but they do clearly provide a number of intelligible mutual
obligations. Difficulties of construction do not in themselves deprive an agreement of
its enforceability. As Lord Wright said in Hillas & Co. Ltd. v. Arcos Ltd. (1932) 147
L.T. 503 at page 514: “[bfusinessmen often record the most important agreements in
crude and summary fashion; … it is accordingly the duty o f the court to construe such
documents fairly and broadly, without being too astute or subtle in finding defects … ”,
In this case, 1 am entirely satisfied that the 2001 Agreement cannot be said to be too
uncertain to be enforced.
Mr Fenwick also sought to attack the validity and enforceability 2001 Agreement on the
grounds of an unpleaded allegation that the parties had no intention to create legal
In the
relations. This contention too seems to me to be doomed to failure.
This contention too seems to me to be doomed to failure.
circumstances of the conclusion of the 2001 Agreement that 1 have found, it seems
obvious to me that the parties intended to create legal relations. It may be that they had
odd ideas about what was to be done with the concluded agreement – they may even
have had some unorthodox notions of the circumstances in which it would actually be
enforced, But those matters are quite different from saying that they did not intend to
create legal relations; I am sure they did.
219.
In my judgment, therefore, the 2001 Agreement did indeed represent a concluded and
enforceable agreement between Mr Gaydamak and Mr Leviev when it was entered into.
The Settlement Agreement
Issue 11: Has the Settlement Agreement come into force, or was it made on terms that it
would only come into force on a date yet to be agreed?
Approved Judgment
Gaydamak v. Leviev
220.
221.
222.
223.
This issue was the first one to be raised by M r Gaydamak in relation to the Settlement
Agreement. According to his account of events, the absence of a date at the beginning
of the Settlement Agreement was something he considered at the time, even before he
signed it.
Despite this evidence, Mr Gaydamak accepts in his first witness statement that on
Monday 8″1 August 2011, he was told by his lawyers that they had received a signed
version of the Settlement Agreement.
Mr Leviev’s acceptance of the Settlement
Agreement was therefore communicated to M r Gaydamak in that way.
He then
received a call from Mr Sumbula praising him for signing the Settlement Agreement
and confirming the promise to provide him with an Angolan diplomatic passport. The
very same day. Mr Gaydamak went to the Ministry o f Foreign Affairs to arrange for the
issue of that passport. He was, therefore, acting as if he believed that the Settlement
Agreement had been concluded so that he could call upon the Angolan government for
what General Kopelipa had promised on its behalf.
On Monday 9″1 August 2011, Mr Gaydamak met General Kopelipa and Mr Sumbula at
the Ministry of Justice in Luanda and they showed him two original copies o f the
Settlement Agreement signed by both parties.
M r Leviev’s acceptance of the
Settlement was therefore, once again, communicated to Mr Gaydamak on that occasion,
Mr Gaydmak says that he queried the absence of a date at that meeting but General
Kopelipa “dismissed this as a point o f no importance”. Despite what Mr Gaydamak
says in his statement, he seems to have accepted General Kopelipa’s view on that
occasion, because he took his diplomatic passport and left Angola on 1 ldl August 2011.
Had Mr Gaydamak persisted in arguing with General Kopelipa that the Settlement
Agreement was not binding, I find it inconceivable that the General would have
allowed Mr Gaydamak to take his new passport and leave the country. After all, it was
General Kopelipa who seems to have invested the most effort to see that the Settlement
Agreement was concluded,
The result seems to me to be that Mr Gaydamak was duly informed that the Settlement
Agreement had been signed by Mr Leviev, and then acted in reliance on that fact. Even
accepting these facts, it is still possible, as Mr Wolfson contends, that as a matter of
construction, the concluded Settlement Agreement had not come into force because of
the absence of a date on the front page. The argument relies primarily on the words in
clause 9 that: “ft]his Agreement has been entered into on the date stated at the
beginning o f it”. In the face of the fact that Mr Gaydamak himself dated the document
directly below that clause and alongside his own signature, it does not seem to me
possible sensibly to argue, as a matter of construction of the whole of the Settlement
Agreement, that the parties are to be taken as having intended that it should not come
into effect until a date had been inserted on the front page, For this exercise, the
subjective evidence o f the parties’ intentions is not admissible. Looking at the
document itself, it seems obvious that the date on which the Settlement Agreement is to
be taken as having been entered into is the 611 August 2011, As 1 say, that date appears
in Mr Gaydamak’s own hand directly beneath the words in clause 9. Those words must
be given a sensible commercial meaning, namely that the date to which they refer is the
There is no evidence that the Settlement
one right next door to the clause itself.
Agreement was intended to be signed in escrow and completed formally between
lawyers. The extrinsic evidence confirms, as I have already indicated, that by 811
August 2011 (or the 9″1 August 2011) at the latest, Mr Gaydamak knew (and in fact
Approved Judgment
Gaydamak v. [ eviev
intended) that the Settlement Agreement had been signed and witnessed and had taken
effect.
224.
It would be an inappropriately technical and un-commercial construction to detennine
that the terms of the Settlement Agreement are to be construed so strictly as to provide
for an escrow arrangement that neither party ever discussed or mentioned before it was
signed. Any objective observer with all the background information available to the
parties would conclude that the Settlement Agreement was intended by the parties to be
taken as having been entered into (and taken effect) on 6lli August 2001, that date
appearing, as I have said, in Mr Gaydamak’s own hand, directly beneath the words in
clause 9 upon which Mr Gaydamak relies as providing for some unspoken escrow
arrangement, It is to be noted in this regard that Mr Gaydamak does not suggest in his
evidence that he mentioned the absence or alleged effect of the missing date when he
signed the Settlement Agreement, only that he himself noticed it.
225.
For these reasons, it seems to me to be clear as a matter of construction o f the
Settlement Agreement that it was to be taken as having been entered into on 6’11 August
2011, the date on which it was in fact signed by the parties. Moreover, it was also, on
its proper construction, intended by the parties to take effect on that same date.
Issue 12: Did General Kopelipa represent: (a) that if Mr Gaydamak signed the
Settlement Agreement. M r Leviev would make a proposal to Mr Gaydamak for the
payment of compensation to Mr Gaydamak, such compensation to be proportionate to
the volume of the business being transacted by Mr Leviev in Angola; and/or (b) that
M r Leviev honestly intended to pay compensation to Mr Gaydamak in return for his
giving up his rights?
Mr Wolfson’s argument in relation to these representations places reliance on the words
in paragraph 62 of Mr Gaydamak’s statement to the effect that General Kopelipa told
him, immediately before he signed the draft Settlement Agreement, that he had raised
the issue o f compensation with Mr Leviev and that “the compensation would he
proposed later on by Mr Leviev and that the compensation would be proportionate to
the volume o f the business activities realised by Mr Leviev in relation to Angolan
entities”.
Mr Wolfson submits that the second representation follows inexorably from the first.
As he put it in closing: “Mr Leviev told General Kopelipa: “Over my dead body’ is Mr
Gaydamak getting any money from me. Go and get this signed. Tell him these terms
effectively, and go and get this document signed”. General Kopelipa comes over to us
and says, “Here’s the document. Mr Leviev will pay you compensation referable to the
volume o f business he’s transacting in Angola”. Well, he knows that’s a fib, and we rely
on that and we sign up” .
The only corroboration for Mr Gaydamak’s evidence on these points is the evidence of
the recording o f the telephone call that took place between M r Sumbula and Mr
Gaydamak later in August 2011. But that recording reads more as if Mr Sumbula is
reassuring Mr Gaydamak in his own hope that Mr Leviev will pay him something.
That is so, at least, until Mr Sumbula seems to have said: “fife s, so, it was very clear
that they [Mr Leviev] must pay in return fo r … in return fo r … ”. Both that passage and
the lengthy second telephone conversation in October 2011 are consistent with General
226.
227.
228.
Approved Judgment
Gaydamak v. I eviev
229.
230.
231.
Kopelipa having said that he would use his influence to persuade Mr Leviev to pay Mr
Gaydamak.
M r Fenwick relies strongly on the fact that Mr Gaydamak said nothing about the
alleged representations until he made his witness statement of 24h November 2011,
several months later. Against that, of course. Mr Gaydamak’s solicitors did quickly say
that the Settlement Agreement was to “form part o f a suite ofsettlement o f commercial
arrangements (with third parties as well as our clients) which has not yet been
finalised’. But that is hardly the same as saying that he had been expressly promised
compensation from Mr Leviev. Mr Gaydamak’s case is not now that the Settlement
Agreement was dependent on some unspecified arrangement with third parties (even
the Government o f Angola) but purely on the alleged representations by General
Kopelipa.
Also relevant to Mr Gaydamak’s account is toe evidence given by Mr Leviev. He said
in paragraphs 133 and 134 of his 3rd witness statement that at no point prior to signing
did General Kopelipa try to persuade Mr Leviev to pay Mr Gaydamak, and that, after
signing, General Kopelipa asked if Mr Leviev was willing to help Mr Gaydamak, and
he offered to make a donation to an Angolan charity for amputees. He said something
similar in the passage from his cross-examination 1 have set out above. Thus Mr
Leviev admits that he was asked to help M r Gaydamak, even though he says that
happened only after he had signed.
I have to take into account the fact that Mr Gaydamak is distinctly prone to
exaggeration, and has not told the truth on a number of matters that I have already
mentioned.
I am, however, inclined to accept that Mr Gaydamak asked General
Kopelipa and Mr Sumbula to ask Mr Leviev whether he would pay some compensation
outside the terms of the ‘drop hands’ Settlement Agreement. But I cannot accept that
General Kopelipa went so far as to say that Mr Leviev “would’ propose compensation.
That would have been directly contradictory to Mr Leviev’s main condition (that he
would pay nothing) and to the express terms of the Settlement Agreement and the entire
agreement clause. I think it far more probable that General Kopelipa said that he would
try’ to use his influence to persuade Mr Leviev to pay Mr Gaydamak, which is exactly
what Mr Gaydamak records at the end of paragraph 62 o f his first statement. 1 am
influenced in this finding by the fact that Mr Gaydamak did not mention any categoric
representation to his solicitors or anyone else until quite some time after the dispute
broke out, and by the fact that Mr Gaydamak seems to have been prepared to enter into
the Settlement Agreement on the faith of General Kopelipa’s promises about the
diplomatic passport (which he obviously needed very much) and the renewed ability to
undertake diamond deals in Angola (which he obviously also wanted very much).
232.
In the circumstances, I cannot find that either of these two representations was actually
made by General Kopelipa to Mr Gaydamak. The telephone conversations do not
provide any sufficient support for the representations alleged by Mr Gaydamak. They
are quite hard to understand, and do, I think, provide more compelling support for the
representation that I think was in fact made, namely that General Kopelipa would try to
use his influence to persuade Mr Leviev to make some payment of compensation to Mr
Gaydamak.
Issue 13: If so, were those representations false to the knowledge o f General Kopelipa?
.Approved Judgment
Gaydamak v. Leviev
233.
Thus issue does not, in the event, need to be decided.
But, had the pleaded
It is
representations been made, it is quite clear that they would have been false.
equally clear that, had they been made, they would have been made fraudulently, since 1
accept that M r Leviev did indeed put forward his two conditions o f settlement to
General Kopelipa. In consequence. General Kopelipa could not have genuinely thought
that Mr Leviev would propose any compensation to Mr Gaydamak, nor that he honestly
intended to pay him. He knew he did not. Had I had to consider this issue in earnest,
however, 1 would have taken into account the unlikelihood of such fraud, particularly
from a man in such a senior position as General Kopelipa. It would, nevertheless, have
been inevitable that his fraud would have to have been found. 1 am. therefore, pleased
that the issue does not arise because I do not think the pleaded representations were
made.
Issue 14: Were those representations relied upon by Mr Gaydamak?
234.
This issue o f reliance also does not need to be decided, but had it arisen, I would have
decided that Mr Gaydamak relied on the pleaded representations, despite knowing of
the entire agreement clause in the draft Settlement Agreement. The more important
question of reliance would have been the reliance on any ostensible authority of
General Kopelipa.
Issue 15: Did those representations induce Mr Gaydamak to enter into the Settlement
Agreement?
235.
Again this issue does not arise, but had it arisen, I would have held that the pleaded
representations would have induced Mr Gaydamak to enter into the Settlement
Agreement.
Actual authority
236.
237.
238.
Issue 16: Did Mr Leviev appoint or constitute General Kopelipa as his agent (i) to
convey his two conditions to Mr Gaydamak and/or (ii) to obtain Mr Gaydam ak’s
signature on the Settlement Agreement’.’
This and the following issues relatingto General Kopelipa’s authority do not arise. Had
they arisen, they would have been points of some difficulty. I have already set out the
law in relation to authority above. But since the issues do not directly arise, I will deal
with the issues briefly in this section of my judgment.
It is important at the outset to understand General Kopelipa’s position, and indeed Mr
Sumbula’s position, in the negotiations for the Settlement Agreement.
General Kopelipa was expressly and obviously acting in the interests of, and at the
behest of the Government of Angola. This much must have been fully understood by
the parties. Mr Gaydamak was promised a diplomatic passport if he settled, and he was
duly provided with one. Only the Government o f Angola could have promised or
performed such a promise. The same goes for the promise that the Angolan
Government would co-operate with M r Gaydamak in relation to the purchase of
diamonds, which Mr Gaydamak accepted was made. That must have had all the greater
force when made in the presence of Mr Sumbula, who had spent many hours with Mr
Gaydamak, since he was the CEO of Endiama, the Angolan state diamond company.
.Approved Judgment
Gaydamak v. Leviev
239.
240.
241.
242.
Returning to the issue stated above, Mr Wolfson has relied on two specific respects in
which he contends that Mr Leviev constituted General Kopelipa as his agent. At their
first meeting on 4th August 2011, Mr Wolfson contends that Mr Leviev expressly
authorised General Kopelipa to inform M r Gaydamak of his two conditions for a
settlement: first, that he would not meet Mr Gaydamak, and secondly that he would not
pay Mr Gaydamak. The second respect was when Mr Leviev sent General Kopelipa the
draft of the Settlement Agreement that his lawyers had drafted. This conduct, Mr
Wolfson contends, constituted General Kopelipa as Mr Leviev’s agent to obtain Mr
Gaydamak’s signature on the Settlement Agreement.
Mr Wolfson says that this much is obvious on the authorities, and that it does not matter
that General Kopelipa had his own agenda, and was known to be pursuing the
objectives o f both the President and the Government o f Angola.
Mr Fenwick submits that General Kopelipa was not expressly authorised, because Mr
Gaydamak constituted the General his agent first. But that is not the way I think things
happened. It seems fairly clear to me from Mr Leviev’s own evidence that General
Kopelipa saw Mr Leviev before he saw Mr Gaydamak. General Kopelipa, I am sure,
only went to see Mr Gaydamak when he knew that Mr Leviev would deal. After all. he
had waited some weeks for Mr Leviev to arrive before starting the process. That is Mr
Leviev’s own case. Thus, it is unlikely that Mr Gaydamak could have authorised
General Kopelipa to act as his agent to procure the offer of a payment from Mr Leviev
In my
before Mr Leviev had informed General Kopelipa of his two conditions.
judgment, Mr Wolfson is right to say that Mr Leviev must, at their first meeting on 4’11
August 2011, have given General Kopelipa the express authority to convey his two
conditions to M r Gaydamak. This follows inexorably, as Mr W olfson’s cross-
examination showed, from Mr Leviev’s point blank refusal to meet Mr Gaydamak,
taken alongside his willingness to allow General Kopelipa to convey his two conditions
to Mr Gaydamak.
The second alleged authorisation is said to arise solely from the act of sending the draft
to General Kopelipa. But taking all the surrounding circumstances into account, it
seems to me that Mr Leviev’s actions in sending the draft to General Kopelipa did
expressly authorise him to procure Mr Gaydamak’s signature on the document. One
might ask rhetorically, why else would he have done what he did? And. of course,
General Kopelipa and Mr Leviev had agreed, when General Kopelipa reported back to
him later on 4th August 2011, that Mr Leviev would get his lawyers to draft up the
Settlement Agreement. And, they must also, 1 think, have discussed the insertion of a
clause (at the end of clause 7) protecting the Government of Angola. General Kopelipa
must have been responsible for the insertion o f that clause and can only have asked for
it when he spoke to Mr Leviev later on 4th August 2011.
243.
So, the answer to this issue is that Mr Leviev did indeed expressly constitute General
Kopelipa as his agent in the two respects mentioned.
Issue 17: Did General Kopelipa have actual authority to make the representations set
out above?
244.
Mr Fenwick submits, whilst one might normally think that representations about what
payment a principal would make would be sufficiently closely connected with the
express agency (i) to inform the other party of the payment terms that the principal
.Approved Judgment
Gaydamak v. Leviev
245.
246.
would agree, and (ii) to get the agreement signed, such that they could be fairly and
properly regarded as done by the agent in the ordinary course of his agency, that is not
so in this case because the agent here was known to have his own personal interests on
behalf of the Government of Angola, and because of the nature o f the agreement being
proposed. Mr Fenwick points to the fact that this alleged agency is an ad hoc agency
and quite unlike all the reported cases, where the agent is a partner or employee or long
term agent, said to be binding his employer or partners or long term principal.
I have no doubt on the evidence that Mr Leviev never gave General Kopelipa any actual
authority to make the representations pleaded to Mr Gaydamak; quite the reverse. 1
accept Mr Leviev’s evidence that he never changed his stance, which was that he would
not make any payment to Mr Gaydamak as a quid pro quo for the dropping of Mr
Gaydamak’s legal proceedings.
I would not have held, had it been relevant, that the pleaded representations were
sufficiently closely connected with General Kopelipa’s express agency either (i) to
inform Mr Gaydamak of the payment terms that the principal would agree, or (ii) to get
the Settlement Agreement signed, such that they could be fairly and properly regarded
as done by General Kopelipa in the ordinary course of his agency. The reasons for this
are that:-
i)
ii)
The positions of General Kopelipa and Mr Sumbula were well known to Mr
Gaydamak and M r Leviev. M r Gaydamak also knew that the Angolan
Government wanted a settlement to be concluded, and was prepared to sweeten
the pill.
Mr Gaydamak knew that the pleaded representations were directly in conflict
with the express terms of the Settlement Agreement, and that Mr Leviev would
not even meet him.
lii)
General Kopelipa’s express authority was obviously strictly limited, as his
statement to Mr Gaydamak that the terms were non-negotiable made clear.
Apparent authoiity
Issue 18: Did Mr Leviev hold out General Kopelipa to Mr Gaydamak (and if so how) as
authorised: (a) to make the representations set out above; or (b) to state that Mr Leviev
intended to pay Mr Gaydamak compensation proportionate to the volume o f business
being transacted by Mr Leviev in Angola if he entered into the Settlement Agreement?
247.
Mr W olfson’s own case is that this question in relation to ostensible authority is much
the same as it is, applying the Dubai Aluminium test, in relation to actual authority.
I,
therefore, reject the submission that General Kopelipa can have had ostensible authority
to make the pleaded representations (had they been made) for the same reasons as I
have rejected the proposition that General Kopelipa had actual authority.
.Approved Judgment
Gaydamak v. Leviev
248.
249.
250.
251.
252.
I am not, however, certain that the test is toe same. In The Ocean Frost supra it was
made clear that ostensible authority comes about where there is a representation of
actual authority, reliance, and therefore an estoppel preventing denial that actual
authority existed. But the normal case, as Lord Keith made clear, is where there is a
long term agency or a course of dealing of the kinds I have mentioned above. It would
be negated when the contractor (Mr Gaydmak) knows that the agent’s (General
Kopelipa’s) authority is limited, as he must have done here from the circumstances and
the express terms of the draft Settlement Agreement. Ostensible authority in a one-off
agency case would, again as Lord Keith said, be rare and unusual. 1 do not see how Mr
Gaydamak can have thought that General Kopelipa had authority to say that Mr Leviev
would pay, when he was looking at the terms of the Settlement Agreement that said he
would not and included an entire agreement clause, and he had been told that the terms
were non-negotiable. As Lord Keith said: “ … it is very difficult to envisage
circumstances in which the estoppel could arise from conduct only in relation to a one-
o ff transaction such as this one was”. I do not think this could possibly have been such
a case.
Issue 19: Did Mr Gaydamak rely upon such holding out?
As 1 have already indicated in my treatment o f the Akai case, the question here would
have been whether it could be shown that Mr Gaydamak was dishonest or irrational
(including turning a blind eye or being reckless) in contending that he relied or in
relying on General Kopelipa’s representations.
The representations in question were, as I have indicated, allegedly made at the time
that General Kopelipa returned to Mr Gaydamak with the Settlement Agreement for
signature. Mr Gaydamak was fully aware of General Kopelipa’s position, and at that
time saw the clause in the draft Settlement Agreement protecting the Government of
Angola. He must, therefore, have had General Kopelipa’s role clearly in the front of his
mind. He must also have known that Mr Leviev’s original position was that he would
pay nothing. But most importantly in my view, Mr Gaydamak knew what the draft
Settlement Agreement actually said – namely that he would be paid nothing. He knew
also that the entire agreement clause made that clear and that, by signing, he was
acknowledging that he had not entered into the Settlement Agreement in reliance on
any representation or warranty made orally or in writing on behalf of the other party. It
would, therefore, have been quite remarkable for Mr Gaydamak genuinely to think that
he could rely on the representations of General Kopelipa when they flew in the face of
the written terms he was being asked to sign and that General Kopelipa had already told
him were non-negotiable.
I do not think that Mr Gaydamak would or could genuinely have thought that he could
rely on the representations (had General Kopelipa had made them).
Indeed, the
telephone conversations with Mr Sumbula on which he himself relies, make it clear that
he did not really think he would be paid.
If I had found that the representations were made. I would have been entirely satisfied
that Mr Gaydamak did not rely on what General Kopelipa was told. He would have
been wholly reckless and irrational if he had. He knew full well what Mr Leviev’s
position was, as reflected in the strict terms of the document he was signing. He may
have hoped that General Kopelipa might persuade Mr Leviev to relent and to make
some payment, but I could not have accepted on the evidence that he would or could
.Appro,ed Judgment
Gaydamak v. Laviav
genuinely have relied on those representations, had they been made. Mr Gaydamak
signed knowing the express terms of the Settlement Agreement, because he wanted the
benefits promised to him by General Kopelipa on behalf of the Angolan Government.
He did not sign because he genuinely expected Mr Leviev to change his mind or to
make him any payment. If he did expect such payment or rely on the truth of such
representations, he was wholly reckless and irrational, as I have already indicated.
Issue 20: Did General Kopelipa have apparent authority to make the representations
above?
253.
In the circumstances, and for the reasons I have given, even if I had held that the
pleaded representations were made, I would have held that General Kopelipa did not
have ostensible or apparent authority from Mr Leviev to make them.
254.
M r Leviev’s knowledge o f General Kopelipa s fraud
Issue 21: If General Kopelipa made fraudulent statements to Mr Gaydamak to induce
him to sign the Settlement Agreement, did M r Leviev turn a blind eye to that fact at the
time when he signed the Settlement Agreement’?
This issue does not arise. Since I have found that General Kopelipa did not make
fraudulent misrepresentations, the question of Mr Leviev turning such a blind eye does
not arise. However, had I found that the alleged misrepresentations were made. I do not
think I could have found on the evidence that M r Leviev turned a blind eye to them. Mr
Leviev seems to have played a fairly straight bat in the negotiations for the Settlement
Agreement. Admittedly, he left it to General Kopelipa and Mr Sumbula to procure the
deal, but that does not mean that he was not clear with them as to the terms on which he
would deal. He never wavered from his position that he would not see Mr Gaydamak
and would not pay a cent. No doubt he would have had an inkling that M r Gaydamak
would be obtaining something (though there is no evidence that he knew about the
Angolan Government’s promises of the diplomatic passport and the diamond contracts).
But it would have been impossible for me to conclude that he turned a blind eye to
General Kopelipa promising something in direct contradiction to the clear terms of his
authority and of the draft Settlement Agreement his lawyers had drafted.
Issue 22: If so. is knowledge that the Settlement Agreement had been procured by fraud
to he attributed to Mr Leviev such as to preclude him from enforcing if?
255.
This issue does notarise.
Issue 23: Is the Settlement Agreement unenforceable and/or liable to be set aside on the
grounds that it was procured hy the fraud of General Kopelipa for which Mr Leviev is
answerable9
256.
This issue also does not arise.
Conclusions
257.
For the reasons I have given, I find that the 2001 Agreement was indeed signed by Mr
Gaydamak and Mr Leviev. and was a valid and enforceable agreement. But, the parties
entered into a valid and binding Settlement Agreement which took effect on 6″’ August
2011, whereby each party released all claims against the other.
.Approved Judgment
Gaydamak v. Laviav
258.
Accordingly the claim will be dismissed. I will hear counsel on the question o f costs
and any appropriate ancillary orders.