Swedish businessman Magnus Roth forced to settle complaint of “corrupt” Russian official
Magnus Roth, a Swedish fishing mogul, founder of Ocean Trawlers Group and current CEO of Three Towns Capital, has settled a complaint filed by convicted Russian fraudster Alexander Tugushev.
Tugushev came to London in 2018 to sue Roth and his business partners, including Vitaly Orlov, for part of Norebo, Russia’s leading fishing group. Tugushev claims to be indebted to a third of the successful Russian business based on informal deals allegedly made in 1997, long before Norebo was founded.
Against Tugushev’s request last week, Orlov’s lawyer told the High Court in London last week that Tugushev formally waived any interest in the fishing industry when he took office in 2003 as vice-chairman of the Russian Fisheries Committee.
Documents supporting Christopher Pymont QC’s case last week showed that Tugushev’s “misjudged and short-lived career as a corrupt official” ended in 2007, when he was sentenced to six years in prison for fraud, for having received bribes from fishing companies in exchange for the granting of fishing quotas.
After Tugushev’s release from prison, it is alleged that he sought unsuccessfully to find a role in the Russian fishing industry. With Russian industry having been heavily reformed since the 1990s and early 2000s, court documents suggest Tugushev’s talents for corruption and professional contacts were less valuable.
Facing new fraud prosecutions in Russia, Tugushev moved to the UK and took legal action against Roth and Orlov, who had founded Norebo while in prison, and turned it into a business. world class fishing. In a further complication detailed by Christopher Pymont QC last week, Russian authorities are now investigating how Tugushev was able to access some of the documents on which his claim is based. When Tugushev presented documents containing non-public information about Norebo to the UK court, the company brought proceedings in Russia on the grounds that the documents must have been stolen.
With the Russian fraud charge, an investigation of stolen documents and a complex claim in London, Tugushev is waging interdependent legal battles on three fronts. With no apparent current commercial interest, Tugushev’s claim and legal fees are met by unknown backers through a litigation funding agreement. 17Arm, a company apparently set up solely to fund this case, has already provided £ 7.8million to cover the costs of the London case. The ultimate source of these funds remains unknown to the court and the UK authorities.
Roth, now elderly and, according to court documents, in poor health, has long sought to extricate himself from the dispute and any association with Tugushev. Roth sold his shares in Norebo to Orlov, in a move, according to Orlov’s lawyers, intended to shield him from the claim. Like Orlov, he denied the existence of any agreement granting Tougushv rights to Norebo, and also challenged the UK’s jurisdiction, on the grounds that the case concerns a Russian company and that only Tougushv resides in the UK. .
Details of the settlement will be kept private, but one can only imagine it was substantial, given the initial claim of £ 350million. Roth’s change of mind may reflect the phenomenon of “litigation fatigue,” where long-running cases drain litigants’ funds and energy, encouraging them to settle out of court.
Either way, the financial proceeds from the settlement will provide a salary to Tugushev’s backers, ensuring that London’s claim can continue, now largely focused on Vitaly Orlov as a target. The case is still expected to boom for some time, with a 16-week hearing scheduled for the first half of 2022, subject to events in related cases.