2018 10:40 am - iapps.courts.state.ny.us

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

LEONID L. LEBEDEV,

Plaintiff,

-against-

LEONARD BLAVATNIK andVIKTOR VEKSELBERG,

Defendants.

IAS Part 39Index No. 650369/2014Hon. Saliann Scarpulla

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’MOTION FOR SANCTIONS

FILED: NEW YORK COUNTY CLERK 07/30/2018 10:40 AM INDEX NO. 650369/2014

NYSCEF DOC. NO. 878 RECEIVED NYSCEF: 07/26/2021

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .....................................................................................................1

BACKGROUND .............................................................................................................................4

A. Lebedev Repeatedly Represented In Pleadings, Sworn Testimony, And Court Submissions That He Never Owned Or Controlled Coral.............................5

B. Lebedev Paid A Former Coral Director To Sign A Letter Stating That Lebedev Had No Involvement With Coral And Then Sought To Affirm The Director’s Statements In Deposition........................................................................7

C. Lebedev Denied Having The Ability To Collect Coral’s Documents .....................8

D. BNP’s Production Confirms That Lebedev’s Sworn Statements That He Has Never Owned Or Controlled Coral Are False ..................................................9

ARGUMENT.................................................................................................................................16

I. THE COURT SHOULD DISMISS LEBEDEV’S COMPLAINT PURSUANT TO ITS INHERENT POWER TO REDRESS FRAUD ON THE COURT............................17

II. THE COURT SHOULD DISMISS LEBEDEV’S COMPLAINT PURSUANT TO CPLR 3126.........................................................................................................................20

III. THE COURT SHOULD AWARD DEFENDANTS COSTS AND ATTORNEYS’ FEES PURSUANT TO 22 NYCRR 130-1.1.....................................................................21

CONCLUSION..............................................................................................................................22



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TABLE OF AUTHORITIES

PageCases

Cano v. BLF Realty Holding Corp.,243 A.D.2d 390 (1st Dep’t 1997) ............................................................................................ 21

CDR Créances S.A.S. v. Cohen,23 N.Y.3d 307 (2014) ....................................................................................................... passim

Herman v. Herman,134 A.D.3d 442 (1st Dep’t 2015) ............................................................................................ 17

McMunn v. Memorial Sloan-Kettering Cancer Center,191 F. Supp. 2d 440 (S.D.N.Y. 2002) ................................................................................ 18-19

Providian Nat. Bank v. Forrester,277 A.D.2d 582 (3d Dep’t 2000)............................................................................................. 21

Shangold v. Walt Disney Co.,2006 WL 71672 (S.D.N.Y. Jan. 12, 2006) ......................................................................... 20-21

Statutory Authorities

22 NYCRR § 130-1.1 ............................................................................................................... 4, 21

CPLR 3126........................................................................................................................... 4, 20-21



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Defendants Len Blavatnik and Viktor Vekselberg respectfully submit this memorandum in

support of their motion for sanctions, including terminating sanctions.

PRELIMINARY STATEMENT

This motion is based on evidence received on July 17, 2018 from BNP Paribas (Suisse) SA

(“BNP”) through the Hague Convention. That evidence puts the lie to an essential element of

Lebedev’s case and his sworn testimony—i.e., that he has never owned or controlled Coral

Petroleum Ltd. (“Coral”). Plain and simple, Lebedev has committed perjury to sustain his claims

against Defendants, and his claims should be dismissed for that reason.

Lebedev’s relationship with Coral has been a central issue in this case (and is now the

subject of a summary judgment motion)1 because Coral signed the 2003 Acquisition Agreement2

pursuant to which Defendants paid $600 million to Lebedev in exchange for a “full and final

settlement” and a release of “any and all rights, claims, and other entitlements … emanating from”

the transactions on which Lebedev bases his claims.3 That agreement was entered into by

corporate entities—which Lebedev says was “standard practice at the time”4—with Coral acting

for Lebedev, but it is undisputed that Lebedev received the $600 million.5 Because the Acquisition

Agreement is a complete defense, Lebedev has sought to evade it by disassociating himself from

Coral—claiming that he “never owned or controlled Coral”6 and denying that Coral was his

1 See Blavatnik’s Motion For Summary Judgment On Defendants’ Fourth Affirmative Defense (Settlement, Waiver, Payment, and Release), And Counterclaim For Indemnification, Dkt. No. 658.

2 Ex. 1 (Acquisition Agreement). “Ex. _” refers to the exhibits to the Affirmation of Richard I. Werder, Jr., filed concurrently with this motion.

3 Id. at 1 and § 2.3.

4 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 37.

5 Ex. 4 (Lebedev Dep.), at 92:2-4 (Acquisition Agreement “is a document thanks to which I was able to receive $600 million”).

6 See, e.g., Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 40 (Coral was not “owned or controlled by me”); id., ¶ 43 (“I do not own or control Coral. I have never owned shares in Coral, whether legally, beneficially or otherwise.”); Ex. 5 (7/3/14



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“agent.”7 Lebedev claims that Coral was owned by Martin Bartek8—a race car driver sponsored

by Lebedev’s company, Sintez Corporation (“Sintez”)—and was “independent” of Lebedev.9 In

his Amended Complaint, Lebedev “denied any ownership of Coral,”10 and he has repeatedly

represented to this Court, the courts of four foreign countries, and Defendants that he “never owned

or controlled Coral.”11

To prevent Defendants from proving that Lebedev controlled Coral and that Coral was his

agent, Lebedev concealed documents about his relationship with Coral. Indeed, although the BNP

production proves that he operated Coral out of the same office at 29/1 Malaya Nikitskaya Street,

in Moscow, that he maintained even after filing this action,12 Lebedev did not produce a single

document relating to Coral’s operations from his own files. Lebedev went so far as to suborn

Lebedev Stmt.), ¶ 18 (“Coral is not my company and it is not under my control.”); Ex. 6 (1/20/15 Lebedev Opp. to Mot. to Dismiss), Dkt. No. 51, at 3 n.2 (“In fact, Coral … is not owned or controlled by Lebedev, nor is he an ‘affiliate’ of Coral ….”) (citing Lebedev’s testimony); Ex. 7 (5/27/16 Irish Letter Rogatory), Dkt. No. 125, at 8 (Lebedev disputing that he “owned and/or controlled Coral”); id. (“Lebedev contends that he does not now, and has never, owned or controlled Coral.”); Ex. 8 (9/16/16 Cyprus Letter Rogatory), Dkt. No. 142, at 10 (Lebedev disputing that he “owned and/or controlled Coral”); id. at 12 (“Lebedev contends that he does not now, and has never, owned or controlled Coral.”); Ex. 9 (8/9/17 Swiss Letter Rogatory), Dkt. No. 428, at ¶ 10 (Lebedev disputing that he “owned and/or controlled Coral”); id. ¶ 12 (“Lebedev contends that he has never owned or controlled Coral.”); Ex. 10 (2/10/16 Miller Letter), at 2 (“[D]espite your repeated allegations, Mr. Lebedev does not now and has never owned or controlled Coral.”).

7 Ex. 5 (7/3/14 Lebedev Stmt.), ¶¶ 14-16 (denying that Coral acted as his agent); Ex. 11 (Am. Compl.), ¶ 96 (same); Ex. 7 (5/27/16 Irish Letter Rogatory), Dkt. No. 125, at 7 (Lebedev disputing that “Coral was … act[ing] as his agent for purposes of entering transactions with [Defendants]”).

8 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 38 (“Mr. Bartek was the owner of … Coral.”).

9 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 37 (Coral “was entirely independent from me”); Ex. 5 (7/3/14 Lebedev Stmt.), ¶ 11 (Coral was “independently-owned”); id. ¶ 17 (Coral was an “independent company”); Ex. 6 (1/20/15 Lebedev Opp. to Mot. to Dismiss), Dkt. No. 51, at 6 (describing Coral as “an independent entity” from Lebedev); Ex. 4 (Lebedev Dep.), at 730:3-8 (Coral was “a stranger or, if you will, an entity that was not directly connected to me”).

10 Ex. 11 (Am. Compl.), ¶ 96.

11 See note 6, supra.

12 Compare Ex. 13 (fax from Lebedev using his Sintez fax number and authorizing payment on invoice addressed to Coral at 29 Malaya Nikitskaya where Sintez and Lebedev maintained their office), with Ex. 14 (Lebedev RFA Responses), at Response No. 120 (“Plaintiff admits that, at certain points during the pendency of this action, he maintained an office in the building located at 29/1 Malaya Nikitskaya ….”) and Ex. 15 (fax from Lebedev to Kuznetsov from Lebedev’s Sintez office at 29/1 Malaya Nikitskaya).



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perjury by paying Coral’s former director, Liam Grainger, several thousand euros to sign a one-

page letter—drafted by a lawyer who worked in the law firm that represents Lebedev in Cyprus13—

falsely claiming that Lebedev “was never involved in any way in the creation or operation of

[Coral] and at no point he had [sic] the authority to give instructions to me regarding the actions

of [Coral],”14 and then having Grainger affirm that false statement at his deposition in Ireland.15

The long-awaited BNP production—which facially shows it would have been available to

Lebedev without the need for legal process—proves that Lebedev’s position on Coral is a fraud.

It proves that Lebedev: (1) was the “beneficial owner” of Coral’s assets;16 (2) was an authorized

signatory (along with his wife) on Coral’s accounts, and had full authority to buy and sell assets,

take out loans, and otherwise transact on Coral’s behalf;17 and (3) personally authorized

(frequently using Coral letterhead) hundreds of transactions, involving hundreds of millions of

dollars, in Coral’s name.18 This evidence proves that Lebedev’s repeated assertion that he “has

never owned or controlled Coral”19 is a blatant lie intended to mislead Defendants and the Court

and designed to avoid the effects of the Acquisition Agreement’s release. Lebedev’s lie has

13 Ex. 16 (3/18/15 Henkelmann email to Grainger requesting that he sign the attached letter she drafted); Ex. 17 (Henkelmann Dep.), at 216:18-22 (“Q… [D]id you write this attachment? A. I drafted the letter, yes.”).

14 Ex. 18 (3/30/15 Grainger Stmt.).

15 Ex. 19 (6/30/16 Grainger Dep.), at 20:18-25 (“Q. Let me ask you one more time: Based on your personal knowledge, today, is the statement that you signed that is Defendant’s Exhibit 13, [i.e., Grainger’s March 30, 2015 statement] to the best of your knowledge, still an accurate document? A. … I can only say to the best of my knowledge, yes.”).

16 Ex. 20 (3/1/99 Application to Open An Account) (identifying Lebedev as “beneficial owner” of Coral’s assets).

17 Id.; see also Ex. 21 (4/3/99 Coral Resolution); Ex. 22 (10/17/03 Coral Resolution); Ex. 23 (8/7/04 Application to Open an Account).

18 See, e.g., Ex. 24 (CORALBNP003263); Ex. 25 (CORALBNP003275); Ex. 26 (CORALBNP003341); Ex. 27 (CORALBNP003343-51). Lebedev provided two signature “specimens” on the form making him an authorized signatory. Ex. 20 (3/1/99 Application to Open An Account), at ‘191. The second signature appears on hundreds of payment requests that Lebedev personally authorized.

19 See, e.g., Ex. 10 (2/10/16 Miller Letter), at 2 (“Despite your repeated allegations, Mr. Lebedev does not now and has never owned or controlled Coral.”).



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resulted in years of needless discovery and other proceedings that cost Defendants millions of

dollars and burdened not only this Court but four foreign courts as well.

The Court has “inherent power to address actions which are meant to undermine the truth-

seeking function of the judicial system”—such as a “[f]raud on the court” which “injects

misrepresentations and false information into the judicial process”—by imposing “heavy

sanctions, including the striking of an offending party’s pleadings and dismissal of the action.”

CDR Créances S.A.S. v. Cohen, 23 N.Y.3d 307, 318-19 (2014). In addition, CPLR 3126 permits

the Court to dismiss the action where, as here, a plaintiff “fails to disclose information which …

ought to have been disclosed.” Further, 22 NYCRR § 130-1.1 authorizes awards of costs and

attorneys’ fees where, as here, a party has engaged in “frivolous” conduct, such as “assert[ing]

material factual statements that are false.” Such sanctions are needed to redress Lebedev’s fraud.

Accordingly, the Court should dismiss Lebedev’s Amended Complaint and award

Defendants their costs and attorneys’ fees.

BACKGROUND

Before he filed this lawsuit, Lebedev recognized that any claims he might bring against

Blavatnik and Vekselberg would require him to avoid the effect of the Acquisition Agreement. To

that end, Lebedev’s pre-suit communications employed a strategy that acknowledged his

ownership and control of Coral and characterized the transaction effected by Coral on his behalf

in the Acquisition Agreement as temporary, such that his rights were restored to him in 2010.20

Having apparently concluded that such a strategy would not yield viable claims, Lebedev

20 In March 2013, Lebedev delivered a draft complaint to Blavatnik stating that “Lebedev is the owner of … Coral”; “Lebedev, acting through Coral, entered into” the 2003 Acquisition Agreement; Coral’s signatory “signed the Acquisition Agreement on Mr. Lebedev’s behalf”; and the Acquisition Agreement effected a “transfer” of Lebedev’s “15% interest” in Defendants’ company but only through December 31, 2010, at which time his “15% interest … was to be returned to him.” Ex. 28 (3/6/13 Lebedev email to Blavatnik); Ex. 29 (Draft Complaint), ¶¶ 6, 81-88.



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abandoned the theory and adopted a new, counter-factual narrative concerning his relationship

with Coral.

A. Lebedev Repeatedly Represented In Pleadings, Sworn Testimony, And Court Submissions That He Never Owned Or Controlled Coral

Since filing this action, Lebedev has maintained—in this Court,21 and in England, Ireland,

Cyprus, and Switzerland22—that he “does not now and has never owned or controlled Coral.”23 A

vast amount of time, effort, and money has been spent as a result of Lebedev’s representation “that

he does not own or control Coral”;24 his assertions that “he has never owned or controlled Coral”;25

and his counsel’s representations that he had no ability to obtain Coral documents.26

Lebedev testified that he did not own or control Coral, and never had.27 He testified that

Coral was an “independent entity”28 owned and controlled by Martin Bartek.29 He testified that

21 Ex. 6 (1/20/15 Lebedev Opp. to Mot. to Dismiss), Dkt. No. 51, at 3 n.2 (“In fact, Coral … is not owned or controlled by Lebedev, nor is he an ‘affiliate’ of Coral ….”) (citing Lebedev’s testimony); Ex. 10 (2/10/16 Miller Letter), at 2 (“Despite your repeated allegations, Mr. Lebedev does not now and has never owned or controlled Coral Petroleum.”).

22 See note 6, supra; see also Ex. 30 (7/11/14 English proceeding transcript), at 12 (Lebedev’s Counsel: “Mr Lebedev is quite clear that he never owned Coral, whether legally, beneficially, or otherwise and does not own or control it.”); id. at 15 (Lebedev’s Counsel: “Coral was an independent company, it wasn’t his company in the sense that he owned the company, or had control over it.”). Lebedev has testified that he stands by all his testimony in the English proceeding. See Ex. 4 (Lebedev Dep.), at 84.


24 See, e.g., Ex. 31 (Stipulation and Order), Dkt. No. 432, at 2 (“WHEREAS, Lebedev alleges … that he does not own or control Coral, and has separately informed Defendants that he does not have the ability to procure evidence from Coral.”); Ex. 11 (Am. Compl.), ¶¶ 94-96 (“Lebedev denied any ownership of Coral”). Indeed, Lebedev took Defendants to task for asserting “that Lebedev was lying about his ownership of Coral.” Id. ¶ 96.

25 See, e.g., Ex. 9 (8/9/17 Swiss Letter Rogatory), Dkt. No. 428, ¶ 12; see also note 6, supra.

26 Ex. 10 (2/10/16 Miller Letter), at 2 (claiming Lebedev could not collect Coral documents because Lebedev “has never owned or controlled Coral”).


28 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 37 (Coral was “entirely independent from me” and “an independent company”); Ex. 5 (7/3/14 Lebedev Stmt.), ¶ 11 (Coral was “independently-owned oil trading company”); id. ¶ 17 (Coral was an “independent company”); Ex. 6 (1/20/15 Lebedev Opp. to Mot. to Dismiss), Dkt. No. 51, at 3 n.2 (“In fact, Coral … is not owned or controlled by Lebedev, nor is he an ‘affiliate’ of Coral ….”) (citing Lebedev’s testimony).

29 Ex. 4 (Lebedev Dep.), at 6:21-7:5 (“Q. How did you first become aware of Coral Petroleum? A. At first, from my partner, Mark Garber, I met Swiss citizen Martin Bartek. Primarily, it was in the basis of economic advice. And soon after that, he introduced his company, Coral Petroleum.”); Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 38 (“Mr. Bartek was the



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Bartek introduced him to Coral as a trading partner for Sintez after Coral already had a well-

established reputation as a trading company.30 He testified that his relationship with Coral was

limited to appointing it to receive funds for him from Defendants,31 and that he paid Coral “a small

commission” for that service.32 He testified that, “[s]ince Coral was not my company … I could

not be sure as to who controlled its bank accounts.”33 He testified that “it could not be under any

circumstances” that he “routinely directed payments to be made out of” the Coral account at BNP

into which Defendants paid over $13 million for him in late 2002 and early 2003.34 He testified

that the name Hilarious Bagdasarianz—the BNP employee to whom he sent literally hundreds of

faxes directing payments from Coral’s account—“is completely unknown to me.”35 And he

testified that, when, after filing this lawsuit, he used the Russian word for “control” in describing

Coral as a company “which I control” in an interview about the case,36 he meant it only in a limited

sense—i.e., “observation or supervision.”37 These are just a few examples of Lebedev’s false

testimony.

owner of a well-known oil trading company … called Coral ….”); Ex. 30 (7/11/14 English proceeding transcript), at 11 (Lebedev’s Counsel: “Coral was ultimately owned by Mr. Bartek”); id. at 86-87 (Lebedev’s Counsel: “we believe the position to be that the beneficial owner of Coral is Bartek”).

30 Ex. 4 (Lebedev Dep.), at 6-8.

31 Ex. 2 (6/21/14 Lebedev Stmt.), ¶¶ 38, 40, 44; Ex. 5 (7/3/14 Lebedev Stmt.), ¶ 15.

32 Ex. 32 (6/22/18 Lebedev Rule 19-a Statement), Dkt. No. 778, ¶ 43; Ex. 4 (Lebedev Dep.), at 119:16-20 (“Mr. Bartek … was receiving a commission for the receiving and for the accounting of [my] monies.”). Coral received about $13.3 million for Lebedev, so the “small commission” (1.5%. see Ex. 33 (Trust Agreement), § 5.1) would have been about $199,500.

33 Ex. 5 (7/3/14 Lebedev Stmt.), ¶ 19.

34 Ex. 4 (Lebedev Dep.), at 397:15-19.

35 Id. at 398:2-11.

36 Ex. 34 (2/11/14 Vedomosti Interview), at 3.

37 Ex. 35 (7/10/14 Lebedev Stmt.), ¶ 3.



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B. Lebedev Paid A Former Coral Director To Sign A Letter Stating That Lebedev Had No Involvement With Coral And Then Sought To Affirm The Director’s Statements In Deposition

Lebedev’s effort to disassociate himself from Coral is not limited to his own testimony. In

late 2014 and early 2015, Lebedev orchestrated a false statement by a former Coral director, Liam

Grainger.38 In November 2014, Lebedev asked Victoria Henkelmann to provide evidence “that I

was not involved in the co-ownership or participation in the management of Coral.”39 Henkelmann

is a German lawyer who worked with Lebedev’s Cyprus lawyer, Theophanis Philippou.40 She

worked for years with a Sintez lawyer named Vadim Ibadov—a close associate of Lebedev’s41

who Lebedev retained to collect evidence for this case.42

At Lebedev’s request, Henkelmann drafted a statement for Grainger—before speaking with

Grainger about whether the facts were true43—and sent it to Grainger with an “assur[ance] that we

will cover all possible expenses and will award your cooperation.”44 She emphasized that “it is

vital to mention that Mr. Lebedev was/is in no way involved or related to [Coral] in any kind and

that all communication and instructions always came from Mr. Bartek and/or his employees” and

she drafted language to that effect.45 On Lebedev’s behalf, Henkelmann paid Grainger €4250 for


39 Ex. 36 (11/3/14 Lebedev Letter to Henkelmann).

40 Ex. 37 (5/2/18 Hearing Tr.), at 15.

41 Id. at 52-56.

42 Ex. 38 (6/28/17 Lebedev Aff.), ¶¶ 31, 33-34.

43 Ex. 19 (6/30/16 Grainger Dep.), at 18-19.

44 Ex. 16 (3/18/15 Henkelmann email to Grainger requesting that he sign the attached letter she drafted).

45 Id. As Coral’s current director, Henkelmann could have examined its records, including its records at BNP, and easily determined that this statement was false. Indeed, she had her Swiss counsel review the BNP documents before they were produced in response to this Court’s request. Ex. 37 (5/2/18 Hearing Tr.), at 18:24-19:18.



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his one-page statement,46 and Grainger signed it, asserting that, “to the best of my knowledge, Mr.

Lebedev was never involved in any way in the creation or operation of [Coral].”47 At Grainger’s

deposition, Lebedev’s counsel used that document to elicit testimony affirming that the now

demonstrably false statements it contains were “accurate.”48

C. Lebedev Denied Having The Ability To Collect Coral’s Documents

Given the importance of Lebedev’s relationship with Coral, Defendants sought discovery

on this topic from Lebedev, Coral, and numerous third parties. Lebedev repeatedly represented

that he had no ability to obtain Coral’s documents.49 Despite his acknowledged business

relationship and his admissions that he used Coral to facilitate his business dealings with

Defendants, Lebedev produced nothing from his own files about his relationship with Coral.

Coral—now controlled (at least nominally) by Henkelmann—tried to frustrate Defendants’ efforts

at every turn, even filing a frivolous objection to BNP’s production of documents, only to withdraw

the objection immediately after the Special Master held a hearing on it but before he could rule.50

As a result, until earlier this month, most of the discovery Defendants had obtained on

Coral came from public records and third parties with limited visibility into Coral’s operations or

its relationship with Lebedev. That changed on July 17, 2018, when Defendants received

46 Ex. 19 (6/30/16 Grainger Dep.), at 12-13, 22; Ex. 17 (Henkelmann Dep.), at 31-32, 176-78, 196-97. Grainger was paid from the Cyprus bank account of Agragorn Holdings, which until at least 2013 was a 100% subsidiary of Coral, and is the entity to which the $600 million was paid for Lebedev’s benefit. See id.; see also Ex. 1 (Acquisition Agreement), § 4.1. Thus, although Henkelmann claimed Coral transferred Agragorn to a “German national” in 2013 (Ex. 17 (Henkelmann Dep.), at 198), Lebedev controlled its accounts in 2015.


48 Ex. 19 (6/30/16 Grainger Dep.), at 19-22.

49 See, e.g., Ex. 31 (Stipulation and Order), Dkt. No. 432, at 2 (“WHEREAS, Lebedev … has separately informed Defendants that he does not have the ability to procure evidence from Coral.”).

50 Ex. 39 (5/15/18 Special Master’s Discovery Order), Dkt. No. 652.



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documents produced by BNP in response to letters rogatory that this Court approved last year.51

Those documents are nothing short of explosive.

D. BNP’s Production Confirms That Lebedev’s Sworn Statements That He Has Never Owned Or Controlled Coral Are False

The BNP documents prove that: (1) Lebedev was the “beneficial owner” of Coral’s

assets;52 (2) Coral’s directors granted Lebedev and his wife general powers of attorney to act for

Coral;53 (3) Coral’s directors (including Grainger) authorized Lebedev and his wife to open and

control Coral’s bank accounts;54 (4) Lebedev had full signing authority over Coral’s BNP account,

while Bartek could not direct any payments from the account;55 and (5) the passports of Lebedev

and his wife were delivered to BNP when Coral’s account was opened.56 The documents also

51 Coral maintained a small account at Allied Irish Banks which was used to deposit Coral’s agency fee and pay expenses required to maintain its existence as an agency company. See, e.g., Ex. 40 (2003 Coral Financial Stmt.), at 1, 6. Lebedev produced an unauthenticated Coral ledger covering 1999-2003. Ex. 41 (Coral Ledger). All Coral banking activity reflected in that ledger was conducted through BNP or its predecessor.

52 Ex. 20 (3/1/99 Application to Open an Account) (identifying Lebedev as the “beneficial owner” of Coral’s assets and Lebedev and his wife as authorized signatories). Bartek signed the disclosure form identifying Lebedev as the beneficial owner, which gives the lie to Lebedev’s assertion that “the beneficial owner of Coral is Bartek.” See Ex. 30 (7/11/14 English proceeding transcript), at 86-87; id. at 11 (Lebedev’s Counsel: “Coral was ultimately owned by Mr. Bartek”).

53 Ex. 21 (4/3/99 Coral Resolution) (identifying Lebedev and his wife as signatories and granting powers of attorney); Ex. 22 (10/17/03 Coral Resolution), at ’100. Lebedev was empowered “generally to do any other act not specifically prohibited by the By-laws of the Corporation,” and this authority remained valid until BNP received notice of a change. Id. There is no evidence that Lebedev’s authority was ever changed. Accordingly, his assertion that he could not obtain Coral documents is false—he could have gone to BNP and asked for them.

54 Id.

55 Ex. 21 (4/3/99 Coral Resolution) (identifying Lebedev and his wife as signatories and granting powers of attorney); Ex. 20 (3/1/99 Application to Open an Account), at ’191 (identifying Lebedev as “beneficial owner” and signatory); Ex. 23 (8/7/04 Application to Open an Account) (identifying Lebedev and his wife as signatories and his wife as “beneficial owner”), at ’176; id. at ’185-86 (providing that Bartek and his company are “third parties” not entitled to give instructions for the account). Grainger signed documents giving Lebedev full authority over Coral’s account, and naming Bartek as a “third part[y]” with limited authority. See id. at ’176-77, ’185-86. He also signed a document designating Lebedev’s wife as the beneficial owner. Id. Coral did not produce these documents in response to the Court’s letters rogatory, and they were not available for Grainger’s deposition. They show that Grainger’s testimony was false. Defendants do not contend that Grainger knowingly lied, but the true facts were known to Lebedev (who allowed his counsel to elicit false testimony without apprising Grainger of those facts) and available to Henkelmann (who procured the false testimony while serving as a Coral director and having a right to access Coral’s documents).

56 Ex. 22 (10/17/03 Coral Resolution), at ’106-07.



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show that BNP relied on Lebedev’s reputation, not Bartek’s, for any obligations that Coral would

incur to BNP.57

Contrary to Lebedev’s testimony that Bartek owned Coral,58 when Coral opened the BNP

account in 1999, Coral identified Lebedev as the “beneficial owner.”59 And in direct conflict with

Lebedev’s testimony that Bartek introduced him to Coral after Coral had become “a well-known

oil trading company that had a good reputation” under Bartek’s direction,60 Coral’s directors

passed a resolution in February 1999—shortly after Coral was created—giving Bartek only limited

authority over the account that Coral used for trading purposes (and not including the ability to

cause funds to leave the account).61 That resolution, which was passed when Coral had not yet

begun trading (or doing anything else for that matter),62 provided that it was Lebedev, not Bartek,

who was empowered to conduct business using the account.63 Thus, the BNP documents

conclusively prove that Lebedev, not Bartek, owned and controlled Coral—including any activities

that Coral may have engaged in as an oil and gas trader.

BNP also produced voluminous documentation showing that Lebedev personally directed

hundreds of millions of dollars of payments from Coral’s account in the years 2001-2003 in

57 Ex. 42 (10/15/98 Schroders Banque Letter regarding Lebedev’s creditworthiness).

58 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 38.

59 Ex. 20 (3/1/99 Application to Open An Account), at ’187-88.

60 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 38.

61 Ex. 21 (4/3/99 Coral Resolution).

62 The ledger produced by Lebedev indicates that Coral did not commence trading until July 1999. See Ex. 41 (Coral Ledger). That activity was conducted using the BNP account that Lebedev controlled. Id. The evidence shows, therefore, that Lebedev was intimately familiar with Coral, and had obtained control over Coral’s business, before Coral began doing business, and that he was involved in Coral’s activities from their inception.

63 Ex. 21 (4/3/99 Coral Resolution).



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documents to which his signature was affixed and that were sent to BNP from his office at Sintez.64

Indeed, by the Fall of 2002—when Lebedev claims Bartek first introduced him to Coral and

“proposed Coral as the company to receive the income due to me” from Defendants65—Lebedev

had personally directed over a hundred million dollars in payments from Coral’s account.

This Court’s request to BNP called for, among other things, “[a]ll correspondence … with

Coral or anyone purporting to act on Coral’s behalf between January 1, 2001 and December 31,

2003, including all requests to distribute, wire or otherwise transfer funds from the BNP Paribas

Account.”66 BNP did not object to this request and appears to have made a full production. It

produced hundreds of orders to transfer funds from the Coral account to pay invoices, make loans,

buy shares in companies, and consummate other transactions dating from April 13, 2001 to

December 10, 2003. Every one of those transfers was authorized by Lebedev.67 Based on the

BNP production, Coral did not spend a nickel unless Lebedev directed the payment.

Bartek, on the other hand, was not authorized to—and based on BNP’s records did not—

direct a single payment on Coral’s behalf. Rather, Bartek’s company ECU Finance corresponded

with BNP with respect to administrative aspects of Coral’s account that did not involve the

expenditure of money by Coral. In exchange for doing so, ECU Finance received a small

consulting fee from Coral—paid from the BNP account that, during the relevant time period, was

64 See, e.g., Ex. 43 (9/4/01 Lebedev fax instructing BNP to make payments to Sintez); Ex. 44 (8/22/01 Lebedev fax instructing BNP to make payments to Sintez); Ex. 45 (12/6/02 Lebedev fax instructing BNP to make payments to Sintez and VINIP); Ex. 46 (12/18/03 Lebedev fax instructing BNP to make payment to Sintez).

65 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 38.

66 Ex. 9 (8/9/17 (8/9/17 Swiss Letter Rogatory), Dkt. No. 428, at Schedule A.

67 Virtually all of these authorizations used the same Sintez fax number that Lebedev used to advise Defendants to name Coral as the Holder of the $200 million Promissory Note and to make payments to Coral on his behalf. CompareEx. 15 (9/18/2002 fax “By order of L.L. Lebedev” and identifying Coral as the company to represent Lebedev’s interests with respect to the Promissory Note) (faxed from Sintez number 095-937-0269); with Ex. 47 (CORALBNP002590-97), at ‘90 (same fax number on Lebedev instruction to BNP to make payments from Coral’s account).



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beneficially owned by Lebedev and, in later years, his wife.68 Lebedev’s testimony that Coral was

Bartek’s company cannot be squared with these newly produced documents.

The hundreds of transfers that Lebedev directed from the BNP account, which Coral had

advised BNP was beneficially owned by Lebedev, included payments to Coral’s account in Ireland

for the agency services Coral was providing to its principal;69 payments to service providers in

Ireland for administrative services, including those required to maintain Coral’s existence as an

agency company;70 payments to Bartek’s company for consulting services and accounting fees;71

payments to Lebedev’s company Sintez;72 and payments to Ilya Sanochkin,73 who purportedly ran

Coral’s Moscow Representative office74 and signed the 2003 Acquisition Agreement pursuant to

which Lebedev admits he disposed of his alleged right to receive income from Defendants’ joint

68 Ex. 20 (3/1/99 Application to Open An Account) (identifying Lebedev as the “beneficial owner” and an authorized signatory along with his wife); Ex. 23 (8/7/04 Application to Open an Account) (identifying Lebedev as signatory and his wife as beneficial owner).

69 E.g., Ex. 48 (CORALBNP002506-07) (reflecting payment of Coral’s invoice for “Provision of Agency Services for the year ended 17th June 2002”).

70 E.g., Ex. 49 (CORALBNP002574-77) (Lebedev using Coral letterhead); Ex. 13 (CORALBNP002478-80); Ex. 50 (CORALBNP002692-94); Ex. 51 (CORALBNP002842-44); Ex. 52 (CORALBNP003059-60); Ex. 53 (CORALBNP003775-76).

71 E.g., Ex. 54 (CORALBNP002884-87) (Lebedev letter on Coral letterhead directing payment to ECU Finance for “payment of management fees”); Ex. 55 (CORALBNP002474-76) (fees for consulting); Ex. 56 (CORALBNP002525-26) (consulting fees); Ex. 57 (CORALBNP002530-31) (preparation of accounting); Ex. 58 (CORALBNP002609-10) (accounting fees); Ex. 59 (CORALBNP002696-702) (preparation of accounting); Ex. 60 (CORALBNP002796-802) (accounting fees).

72 E.g., Ex. 47 (CORALBNP002590-97). These documents relate to the earliest in time payment from Coral to Sintez reflected in the BNP production. The payment was authorized by Lebedev. Lebedev’s witness, Nikita Belous, who claims to have received instructions from Bartek and Ilya Sanochkin rather than from Lebedev (see Ex. 66 (6/19/14 Belous Stmt.), ¶ 6), clarified Lebedev’s instructions to BNP and therefore was well aware that Lebedev controlled Coral’s trading activity. And while Belous claims to have been working for Coral at the relevant time (id. ¶ 4), he communicated with BNP on behalf of Lebedev and Coral using a Sintez email account. Ex. 67 (Belous email).

73 E.g., Ex. 61 (CORALBNP002980) (Lebedev letter on Coral letterhead referencing “Services Agreement”); Ex. 24 (CORALBNP003263) (same); Ex. 62 (CORALBNP002630) (referencing “Services Agreement”); Ex. 63 (CORALBNP002686) (same); Ex. 64 (CORALBNP002770) (same). Notably, Lebedev directed payment of Sanochkin’s services fee in the very month in which Sanochkin signed the Acquisition Agreement. Ex. 65 (CORALBNP003780-81).

74 Ex. 66 (6/19/14 Belous Stmt.), ¶ 6 (“The head of [Coral’s] Moscow Representative Office was Mr. Ilya Sanochkin.”).



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venture company.75 Indeed, Lebedev personally authorized payment of the €225 in administrative

fees incurred in granting Sanochkin power of attorney to sign the Acquisition Agreement.76

The payments also included large unsecured and interest-free loans to Lebedev’s company,

Trade Concept Limited (“TCL”), as well as payments to TCL’s creditors;77 payments to fund large

loans to companies—i.e., Negusneft, Sintezneftegaz, and Sintez78—that Lebedev owned;79 and

payments by which Coral bought shares in other entities.80 Thus, Lebedev was controlling and

funding not only Coral’s day-to-day activities but also Coral’s extraordinary lending and

investment transactions.

The BNP documents show that all Coral activities that involved spending money were

authorized by Lebedev, and Lebedev alone. Notably, many of the payments that Lebedev

authorized, totaling hundreds of millions of dollars, occurred well before he supposedly agreed

with Bartek to have Coral serve as his “nominee” to receive payments from Defendants’ company

and before those payments were made. Thus, contrary to Lebedev’s sworn statements, his

relationship with Coral did not start or end with Coral’s receipt of his money from Defendants.

Nor was the relationship limited to ensuring the safe handling of the money Lebedev received from

75 Ex. 2 (6/21/14 Lebedev Stmt.), ¶ 54 (“I chose [to] sell the income rights … back to Messrs Blavatnik and Vekselberg.”).

76 Ex. 87 (6/9/03 Sanochkin POA); Ex. 88 (CORALBNP003775-76) (invoice for POA and Lebedev fax authorizing payment for invoice relating to POA).

77 E.g., Ex. 68 (CORALBNP0002742-57); Ex. 69 (CORALBNP002766-69); Ex. 70 (CORALBNP00002921-25).

78 See, e.g., Ex. 71 (CORALBNP003180-82) (Lebedev directs $1.5 million payment on Coral loan to Sintez); Ex. 72 (CORALBNP003078) (Lebedev directs $4.5 million payment on Coral loan to Negusneft); Ex. 73 (CORALBNP002634-40) (Lebedev directs $2.37 million payment on Coral loan to Sintezneftegaz).

79 Ex. 4 (Lebedev Dep.), at 264:8-265:10 (Lebedev owned approximately 90% of Negusneft until 2015); Ex. 74 (Sintezneftegaz Sale Agreement), at p. 3 and § 8.1(c) (indicating that, until 2012, Lebedev was the sole shareholder of Sintezneftegaz); Ex. 38 (6/28/17 Lebedev Aff.), ¶¶ 6-10 (Lebedev owned 40% of Sintez Corporation until the end of 2002, when he transferred his stake to “certain business partners”).

80 E.g., Ex. 75 (CORALBNP003058) (funding increase of capital of OOO Vinip and purchase of shares in ; Ex. 76 (CORALBNP002986) (funding purchase of shares on ; Ex. 77 (CORALBNP002545)

(funding purchase of shares in OOO Vinip and Zivma). Notably Zivma is an asset that Henkelmann testified is still owned by Coral. Ex. 17 (Henkelmann Dep.), at 231; Ex. 78 (3/1/18 Henkelmann Aff.), ¶ 6.

PARTY GGG

PARTY GGGG



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Defendants. Lebedev literally controlled everything that Coral did, including Coral’s trading

activities.

* * * * *

Several conclusions are unavoidable from this newly available evidentiary record.

First, Lebedev—and not Bartek—beneficially owned Coral’s assets at all relevant times.

Second, the facts that (1) Lebedev personally authorized the payment of the agency fees

that Coral charged as an Irish agency company and the administrative expenses necessary to

maintain Coral’s existence as an Irish agency company, and (2) the payments were funded with

money from an account beneficially owned by Lebedev, show that Coral was serving as an agency

company for Lebedev and that Lebedev—and not Bartek—was Coral’s principal.

Third, the payments that Lebedev directed Coral to make to Bartek’s company ECU

Finance confirm Bartek’s role as a mere service provider, not Coral’s owner. Bartek’s company

provided administrative services, and, contrary to Lebedev’s testimony that Bartek used Coral to

engage in oil and gas trading,81 every payment for every purchase of oil and gas was directed by

Lebedev. Bartek—Coral’s supposed owner—was never authorized to spend Coral’s money,

which is inconsistent with ownership. And Coral paid Bartek’s company using funds beneficially

owned by Lebedev—making it crystal clear that his services were for Lebedev’s benefit, and

further confirming that Lebedev (not Bartek) was Coral’s principal.82

Fourth, the BNP documents reflect that Coral was engaged in oil and gas trading—often

with Lebedev’s company Sintez. This activity is consistent with Coral’s status as an Irish agency

81 Ex. 4 (Lebedev Dep.), at 6-8.

82 Bartek’s company described Lebedev as “our client” in communicating with BNP about payment instructions that Lebedev had delivered on Coral’s behalf and other matters. Ex. 79 (CORALBNP002837-39); see also, e.g., Ex. 80 (CORALBNP002564).



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company. The purpose of such a company is to engage in transactions for the account of a principal

rather than for its own account.83 The fact that Lebedev controlled the account through which

Coral’s activities—including oil trading—were conducted and funded shows that Lebedev was the

principal of this Irish agency company which engaged in activity for Lebedev’s benefit.

Fifth, the fact that Lebedev authorized large unsecured, interest-free loans to his company

TCL,84 paid TCL’s expenses, and funded loans to other companies that he owned from a Coral

account that he beneficially owned further confirms that Coral was not the “independent company”

he has claimed it was. Independent companies do not loan each other money without security or

interest. Such a practice is consistent with common ownership and, therefore, Coral’s loans to

TCL show that Lebedev also owned Coral.

BNP’s production also includes account statements85 that reflect Coral’s receipt of the

$13.3 million that Defendants caused to be paid to Coral for Lebedev between October 2002 and

January 2003—but no payment of that money to Lebedev. Lebedev’s funds were pooled with

other Coral funds and used at Lebedev’s direction to conduct Coral’s business. This is, of course,

wholly inconsistent with the kind of relationship Lebedev has testified he had with a supposedly

“independent” company.86 But it all makes sense in light of the newly produced evidence proving

83 Ex. 81 (Roberts Dep.), at 16:26-17:1, 58:18-59:19 (Coral’s auditor stating that Coral’s “principal objective” was “to effectively engage in agency activities with principals”); id. at 41:10-25 (“Coral never made and lent money in its own right, and had no right to do it, or entered into any transactions other than agency-related transactions.”); Ex. 82 (6/29/16 Grainger Dep.), at 103:3-11 (Former Coral director stating that, “[g]enerally [in] an Irish agency company, Coral in particular … none of the assets would be beneficially owned by Coral …. They may have been in the name of Coral but they wouldn’t be beneficial assets of Coral ….”); Ex. 83 (O’Donovan Dep.), at 40:14-24 (Former Coral director testifying that the representations in Coral’s Financial Statements that its “principal activity … was acting as a general agent” were true).

84 Ex. 4 (Lebedev Dep.), at 30:6-32:10, 97:24-98:3 (by 2001 or 2002, Lebedev was “the 100 percent owner of” Trade Concept); see also id. at 133:9 (“I am Trade Concept”).

85 Ex. 84 (CORALBNP000200-43).

86 Ex. 2 (6/21/14 Lebedev Stmt.), ¶¶ 37-40.



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that the funds Coral received for Lebedev were paid into an account that Lebedev beneficially

owned and which Lebedev, not Bartek, controlled.87 Only Lebedev could withdraw funds from

that account. And the BNP statements, like the unauthenticated Coral ledger that Lebedev

previously produced,88 do not reflect any payment of the “small commission” that Lebedev says89

he paid to Coral.90 These facts are consistent with Lebedev having owned and controlled Coral,

for it would have made no sense to pay a commission to himself for receiving his own money.

BNP’s production is devastating to Lebedev’s position, but the coup de grâce is a letter he

sent to BNP on Coral letterhead requesting that BNP close “our account” and transfer the funds to

another bank with which Lebedev did business.91 As with all of Lebedev’s directions, BNP

promptly complied.92 It could not be any clearer that Coral was Lebedev’s company, not Bartek’s,

and that Lebedev has consistently lied to the Court and Defendants about his lack of ownership

and control of Coral in order to advance his claims in this action.

ARGUMENT

“[W]hen a party lies to the court and its adversary intentionally, repeatedly, and about

issues central to the truth-finding process, it can fairly be said that the party has forfeited the right

to have the claim decided on the merits.” CDR Créances, 23 N.Y.3d at 321 (internal quotation

marks and brackets omitted). The Court has both inherent and statutory authority to dismiss the

complaint as a sanction for actions “designed to undermine the judicial process and thwart the non-

87 See notes 16-18, supra.

88 Ex. 41 (Coral Ledger).

89 Ex. 32 (6/22/18 Lebedev Rule 19-a Statement), Dkt. No. 778, ¶ 43.

90 Ex. 84 (CORALBNP000200-243).

91 Ex. 85 (CORALBNP000199); Ex. 42 (10/15/98 Schroder’s Banque Letter to BNP) (“We hereby confirm having known Mr. Leonid[] Lebedev for several years.”).

92 Ex. 86 (CORALBNP000198).



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offending party’s effort to assert a claim or defense by the offending party’s repeated perjury or

falsification of evidence.” Id. at 319. Such a sanction is warranted here.

I. THE COURT SHOULD DISMISS LEBEDEV’S COMPLAINT PURSUANT TO ITS INHERENT POWER TO REDRESS FRAUD ON THE COURT

The Court has “inherent power” to redress a “[f]raud on the court.” Id. at 318. “Fraud on

the court involves willful conduct that is deceitful and obstructionistic, which injects

misrepresentations and false information into the judicial process so serious that it undermines the

integrity of the proceeding;” it “warrants heavy sanctions, including the striking of an offending

party’s pleadings and dismissal of the action.” Id. at 318-319 (internal quotation marks and ellipses

omitted). “Dismissal is most appropriate in cases like this one, where the conduct is particularly

egregious, characterized by lies and fabrications in furtherance of a scheme designed to conceal

critical matters from the court and the nonoffending party; where the conduct is perpetrated

repeatedly and willfully, and established by clear and convincing evidence ….” Id. at 321; see

also Herman v. Herman, 134 A.D.3d 442, 442 (1st Dep’t 2015) (upholding dismissal sanction

where party’s conduct was “dilatory, evasive, obstructive and ultimately contumacious,” and

“prejudiced [the other parties] by impeding their ability to obtain true discovery and by forcing

them to spend enormous amounts of money and time to prove their case”) (internal quotation

marks and brackets omitted).

“[I]n order to demonstrate fraud on the court, the nonoffending party must establish by

clear and convincing evidence that the offending party has acted knowingly in an attempt to hinder

the fact finder’s fair adjudication of the case and his adversary’s defense of the action.” CDR

Créances, 23 N.Y.3d at 320 (internal quotation marks omitted). That standard is easily satisfied

here. Lebedev’s ownership and control of Coral is a central issue and a key element of Defendants’

release defense. To evade the release, Lebedev has maintained the lie that he “has never owned



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or controlled Coral.” He advanced this now-demonstrably false claim in: (1) sworn statements to

the English High Court; (2) his Amended Complaint and opposition to Defendants’ motion to

dismiss; (3) letters rogatory that this Court sent to courts in Ireland, Cyprus, and Switzerland; (4)

discovery correspondence and briefs to the Court; and (5) his deposition under oath.93 Lebedev

even paid another witness to bolster the lie that he “was never involved in any way in the creation

or operation” of Coral.94

The BNP production proves that Lebedev’s repeated denial of his ownership and control

of Coral is a fraud. During the relevant period, Lebedev: (1) was the “beneficial owner” of Coral’s

assets;95 (2) was an authorized signatory on Coral’s accounts;96 and (3) personally authorized

hundreds of transactions worth hundreds of millions of dollars in Coral’s name.97 There can now

be no dispute that Lebedev’s assertions that he has “never owned or controlled Coral”—and

Grainger’s suborned statement that Lebedev “had no involvement in Coral’s operations”—were

knowingly false and designed to bolster Lebedev’s position on a central issue. See, e.g., CDR

Créances, 23 N.Y.3d at 321-23 (affirming decision to strike defendants’ answers and entering

default judgment where defendants engaged in “lies and fabrications in furtherance of a scheme

designed to conceal critical matters”); McMunn v. Memorial Sloan-Kettering Cancer Center, 191

F. Supp. 2d 440, 460-62 (S.D.N.Y. 2002) (dismissing action where plaintiff “intentionally and in

93 See note 6, supra; see also Ex. 4 (Lebedev Dep.), at 6:21-7:7 (testifying that Bartek owned Coral); id. at 372:10-23 (Coral did “not represent any of my interests.”).


95 Ex. 20 (3/1/99 Application to Open An Account) (identifying Lebedev as the “beneficial owner” and an authorized signatory along with his wife);

96 Id.; see also Ex. 21 (4/3/99 Coral Resolution) (identifying Lebedev as authorized signatory and granting him power of attorney); Ex. 22 (10/17/03 Coral Resolution) (identifying Lebedev and his wife as signatories).




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bad faith repeatedly lied about where she was living for the purpose of unfairly bolstering her

claim”).

Moreover, Lebedev concealed evidence of his ownership and control of Coral. He did not

produce any of the documents obtained from BNP in discovery, but he plainly could have. First,

Lebedev faxed many of the payment instructions to BNP from his office at 29/1 Malaya

Nikitskaya, which he maintained until after filing this action.98 Given that he transacted hundreds

of millions of dollars through Coral for years, it strains credulity that he would have no records of

these transactions in his files. Second, as the “beneficial owner” of Coral’s BNP account, Lebedev

communicated with BNP on an almost daily basis, and he could have asked BNP to produce these

documents upon Defendants’ request at the outset of discovery in 2016. Instead, he claimed that

he could not do so because, “[d]espite [Defendants’] repeated allegations, Lebedev has never

owned or controlled Coral.”99 Were it not for Defendants’ efforts to obtain the BNP documents

via the Hague Convention, Lebedev might have succeeded in concealing the truth; but such efforts

would have been unnecessary if Lebedev had simply told the truth. See McMunn, 191 F. Supp. 2d

at 460 (“Only [defendant’s] extraordinary efforts and related expenses revealed the elaborate

fabrication.”).

CDR Créances is on point and confirms that dismissing Lebedev’s complaint is the proper

sanction. A central issue in CDR Créances was whether the father and son defendants, Maurice

and Leon Cohen, “conspired to avoid repayment [of converted loan proceeds] by denying their

ownership and control over entities used to conceal the converted funds.” 23 N.Y.3d at 311.

98 Ex. 14 (Lebedev RFA Responses), at Response No. 120 (“Plaintiff admits that, at certain points during the pendency of this action, he maintained an office in the building located at 29/1 Malaya Nikitskaya, where Sintez Group was also located.”).

99 Ex. 10 (2/10/16 Miller Letter), at 2.



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“Maurice stated he did not own any of the defendant entities,” and “Leon denied that he or any

member of his family had any ownership interest in any of the defendant entities plaintiff alleged

he and his father controlled.” Id. at 314. The Cohens’ statements were lies, and they sought to

bolster their lies by persuading the managers of the defendant entities to testify that the Cohens

“did not control any of [those] entities.” Id. The Court of Appeals held that striking the Cohens’

answers and entering a default judgment was appropriate because their lies and “subornation of

perjury” showed that they “intentionally sought to deceive the court and the plaintiff.” Id. at 322-

23.

The same is true here. Lebedev has lied about his ownership and control of Coral at every

turn—and suborned perjury from a former Coral director in exchange for thousands of euros—in

order to frustrate Defendants’ efforts to prove that Lebedev released his claims under the

Acquisition Agreement that Coral entered into on his behalf. Lebedev’s lies have “undermine[d]

the truth-seeking function” of the Court, they were “deceitful and obstructionistic,” “perpetrated

repeatedly and wil[l]fully,” and “warrant[] heavy sanctions, including striking [Lebedev’s]

pleadings and dismissal of the action.” See id., at 318-319, 321; see also Shangold v. Walt Disney

Co., 2006 WL 71672, at *5 (S.D.N.Y. Jan. 12, 2006), aff’d, 275 F. App’x 72 (2d Cir. 2008)

(“Because [plaintiffs] have tainted evidence at the heart of their dispute with Defendants and then

sought to conceal it, they have forfeited their right to litigate this case and no sanction short of

dismissal will suffice to deter future misconduct.”).

II. THE COURT SHOULD DISMISS LEBEDEV’S COMPLAINT PURSUANT TO CPLR 3126

CPLR 3126 provides that where a party “fails to disclose information which the court finds

ought to have been disclosed,” the Court has broad authority to issue an order, inter alia,

“dismissing the action … or rendering a judgment by default against the disobedient party.” CPLR



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3126; see also CDR Créances, 23 N.Y.3d at 317-18. Dismissal is a particularly appropriate

sanction where, as here, the conduct was “willful and contumacious.” See Cano v. BLF Realty

Holding Corp., 243 A.D.2d 390, 390 (1st Dep’t 1997).

By asserting under oath that he “has never owned or controlled Coral,” and refusing to

produce documents showing that, in fact, he was the beneficial owner of Coral’s assets, Lebedev

has “fail[ed] to disclose information which … ought to have been disclosed.” Lebedev’s conduct

was also “willful and contumacious.” He obviously knew that his assertions that he “has never

owned or controlled Coral” were lies, and he has repeated those lies for years. Accordingly, a

judgment of default and dismissal is warranted under CPLR 3126.

III. THE COURT SHOULD AWARD DEFENDANTS COSTS AND ATTORNEYS’ FEES PURSUANT TO 22 NYCRR 130-1.1

Under 22 NYCRR 130-1.1, a court may, in its discretion, award costs—including

“reasonable attorney’s fees”—for “frivolous” conduct. 22 NYCRR § 130-1.1(a); Providian Nat.

Bank v. Forrester, 277 A.D.2d 582, 583-84 (3d Dep’t 2000).

Conduct is frivolous if “it asserts material factual statements that are false.” 22 NYCRR

130–1.1(c)(3). “In determining whether the conduct undertaken was frivolous, the court shall

consider … [(1)] the circumstances under which the conduct took place, including the time

available for investigating the legal or factual basis of the conduct; and [(2)] whether or not the

conduct was continued when its lack of legal or factual basis was apparent, should have been

apparent, or was brought to the attention of counsel or the party.” Id.; see also Shangold, 2006

WL 71672, at *5-6 (plaintiffs’ false statements warranted dismissal and an award of attorneys’

fees because, “[f]or more than two years, Plaintiffs have imposed substantial burdens on

Defendants including attorneys’ fees, costs and the attendant inconvenience and distraction of

defending this litigation”).



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Lebedev clearly has asserted “material factual statements that are false.” Moreover, the

“circumstances under which the conduct took place” and “whether … the conduct was continued

when its lack of … factual basis was apparent” support sanctions because Lebedev knew that his

efforts to disassociate himself from Coral were based on lies and designed to avoid the dismissal

of his action. This case would have been far more efficient, and discovery could have concluded

years ago, if Lebedev had not lied about his ownership and control of Coral.

CONCLUSION

For these reasons, Lebedev’s Amended Complaint should be dismissed with prejudice, and

Defendants should be awarded their costs and attorneys’ fees to be determined by the Court after

taking proofs.



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Dated: July 30, 2018New York, New York

QUINN EMANUEL URQUHART& SULLIVAN LLP

By: /s/ Richard I. Werder, Jr. Richard I. Werder, Jr.Stephen A. BroomeRon HagizKimberly E. Carson51 Madison Avenue, 22nd FloorNew York, New York 10010Tel: 212-849-7000

GANFER SHORE LEEDS & ZAUDERER LLP

Mark C. Zauderer360 Lexington AvenueNew York, New York 10017Tel: (212) 922-9250

Attorneys for Defendant Len Blavatnik

WHITE & CASE LLP

By: /s/ Paul B. CarberryPaul B. CarberryOwen C. PellIsaac S. Glassman1221 Avenue of the AmericasNew York, New York 10020Tel.: 212-819-8200

Attorneys for Defendant Viktor Vekselberg



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