Shnaider wins lengthy court battle, ‘exoneration’
Ontario court awards damages of US $137.5M
Toronto • A seven-year legal battle waged between Canadian billionaire Alex Shnaider and a group of businessmen suing over a joint venture involving Russian oil and gas fields gone bad — amid allegations of fraud, bribery and kidnapping — has come to a close, with millions in damages awarded to Mr. Shnaider’s company.
Symon Zucker, a Toronto lawyer who was on Mr. Shnaider’s legal team, called it a “complete exoneration” of Mr. Shnaider and his business partner Eduard Shyfrin.
The case centres on a joint venture set up in 2006 by a Calgary businessman, oil and gas expert Michael Shtaif, and Mr. Shnaider to find undervalued oil and gas properties in Russia.
That later fell apart and was mired in accusations of fraud.
In 2007, Mr. Shnaider was sued for $750-million by Mr. Shtaif, lawyer Gregory Roberts, engineer Ilya Entin and businessman Eugene Bokserman, claiming that Mr. Shnaider and his companies Midland Resources Holding Ltd. and Koll Resources Ltd. had breached their contract.
Furthermore, Mr. Shtaif claimed Mr. Shnaider used a series of bribes and payoffs to foreign public officials to have Mr. Shtaif arrested in Russia to gain a “tactical advantage in the joint venture action.”
Mr. Shnaider later alleged in a civil lawsuit that Mr. Shtaif and a group of businessmen tried to defraud him and his Midland Group steel empire, and Mr. Shyfrin, of their $50-million investment.
In a judgment released Friday, after a trial that began in February, Ontario Superior Court wrote that Mr. Shnaider, his business partner Mr. Shyfrin and Midland did not breach their contract, and awarded damages to Midland worth a total of more than US$137.5-million.
Judge Mary Anne Sanderson also “held Shtaif liable for deceit and unlawful conspiracy” and foudnt that Midland was entitled to recover the balance of the roughly $50-million invested in the venture.
Mr. Shtaif and Mr. Roberts were also found by the court to have breached fiduciary duties and used false misrepresentations to induce Mr. Shnaider and Mr. Shyfrin to continue their investment, Mr. Zucker’s firm said in a release.
In a statement, Mr. Shnaider said the false and misleading accusations made against him drove him to persist through the lengthy legal battle.
“Mr. Shyfrin and I have had to endure these allegations for several years, but we were determined to have our day in court,” he said. “[Friday’s] decision shows that we were right not to give in.”