The court case between Lev Leviev and Arcadi Gayamak over profits from an Angolan diamond company began in the High Court in London yesterday. Gaydamak is suing Leviev for half the assets of venture, on the basis of what he claims is an agreement written and signed in Tel Aviv December 2001 to share profits from the venture. Gaydamak claims that Leviev owes him £640 million, about $1 billion.
Leviev appeared before the court yesterday, but Gaydamak chose to give evidence via video link from Israel, where he is fighting extradition to France following a conviction for tax fraud.
Gaydamak, 60, claims that the only signed copy of the agreement was entrusted for safekeeping with the Chief Rabbi of Russia, Rabbi Berel Lazar. The court was told that the Rabbi Lazar, who is not a party to the action and is not giving evidence in person, no longer has the document.
Leviev, 55, denies the claims and is fighting the lawsuit. The Uzbekistan-born diamond magnate emigrated to Israel in 1971 at the age of 15. He went on to establish his own factory to cut and polish diamonds and eventually became the world’s largest operator in the industry, through his eponymous company Leviev, by clinching partnerships in Russia, Angola and Namibia and breaking the cartel of De Beers.
Gaydamak attorney, David Wolfson opened the case by saying "This trial is not about Mr. Gaydamak and Mr. Leviev and who is the bigger saint. Both have led full and somewhat colorful lives. Therefore, we do urge the court to rely on the central question." He added “This case is about one question alone: did Mr. Gaydamak and Mr. Leviev enter into agreement in December 2001 to split between them the profit made by diamond trading in Angola?"
Gaydamak alleges that he and Leviev agreed that Leviev would hold Gaydamak's share of profits the Angolan Diamond Selling Corporation Sarl, allowing him to keep a low profile. Leviev denies that that there was any deal, and that the document in question was simply an agreement that Gaydamak would donate to a charity he had founded.
Wolfson said that it was common practice to give sensitive documents to the Chief Rabbi for safekeeping, but that Rabbi Lazar has avoided explaining how this document was lost.
The dispute goes back to Angola's civil war, during which Gaydamak supplied arms and food to the Angolan army, as well as security services through former Mossad agents. He later won on appeal a conviction in France for illegal arms trading with Angola, a case in which several senior French politicians were convicted.
He set up a company, which was jointly owned by the Angolan government to sell diamonds to help finance the war. Gaydamak contends that he approached Leviev to be the "front man" in the venture, and that Leviev “for some time honored the 2001 agreement by making partial payments under it, but that LL [Lev Leviev] then betrayed his trust by refusing to abide by the agreement any longer and denying its existence." Gaydamak contends that Leviev stopped the payments in 2005.
Leviev counters that he founded the company and that Gaydamak had only a limited role in it.
Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2012
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