Oligarchs

Oligarchs ... Michael Cherney and Oleg Deripaska.

The contract was drafted at a five-star hotel in London, the single sheet of paper to bring to an end a relationship that started nearly two decades and 3200 kilometres away in the aluminium mills of the Siberian steppes.

For one of the signatories, Michael Cherney (who is also sometimes known as Mikhail Chernoy, Mikhail Chorny or Mikhail Chernoi), the $US250m payment was the first step in exiting from his legitimate ownership of the world's largest aluminium producers, now called Rusal.

For Oleg Deripaska it was no more than extortion, or krysha as it is known in Russian, a final pay-off to organised crime groups (OCGs) allegedly fronted by Cherney.

The fact that $US250m changed hands after the March 2001 meeting in the Lanesborough Hotel is undisputed. Almost everything else - the death threats, shady deals, assassination attempts and corruption on an industrial scale - is.

The multibillion-dollar case between Deripaska, and known fugitive from the law, Cherney, will finally be heard at the UK Royal Courts of Justice this week.

Cherney's legal team will claim he took Deripaska under his wing and, using his connections, opened the doors that allowed his protege to become one of the world's richest men. In return he was given part ownership of the asset at the heart of the Deripaska/Rusal empire, the Sayan aluminium smelter, known as SaAZ.

He was, by his own account, a partner in the aluminium empire. According to Deripaska, that account is a fiction. Deripaska's legal case alleges that Cherney was part of an empire of organised criminals that were extorting cash from businesses.

The deal brokered in the Lanesborough was the final instalment of this protection money, it is claimed. In 2001, Deripaska felt secure enough to put a stop to the protection money he had been paying since 1995.

In his defence documents he claims Cherney and Anton Malevsky, a gangster who died in 2001, were the principal individuals behind the organised crime groups (OCGs) that operated in Russia. Working through gangs, the alleged gangsters extorted money from Deripaska and others.

"It was well understood by businessmen operating in Russia in this period that it was necessary to have krysha in order to avoid the otherwise inevitable damage to their businesses and assassinations or personal harm to them or their families," Deripaska's documents claim.

Deripaska, an associate of Lord Peter Mandelson, will detail in court how he paid private armies to protect his business interests in the late 1980s.

"The first time I was directly threatened ... two weeks later my commercial director was shot two times in the head," Deripaska told London's The Sunday Telegraph in an interview this year. "This was how, finally, I decided it was better to pay for the moment to stay alive and for my people to stay alive."

Cherney will give evidence via videolink as his presence could lead to him being detained under warrants connected to a Spanish money laundering investigation.

Over 10 years, Deripaska will claim he had defended his businesses from criminal infiltration while crime gangs in Russia had weakened.

Starting from his primary asset, the SaAZ smelter, Deripaska had equipped police with equipment, as well as funding his private security force, to combat crime. By 2001 he claims the work had paid dividends.

"The development of the law enforcement agencies in the Russian Federation, the law and order policy of the new Russian government, and the success of Mr Deripaska's business in all areas, including his efforts to terminate the influence of OCGs, meant that Mr Deripaska felt able for the first time to attempt to negotiate a termination of the krysha agreement," the documents state.

A meeting was brokered between Malevsky of the Izmailovskaya crime group and Deripaska.

According to Deripaska's case, the figure of $US400m was brokered. There was a condition that Deripaska should meet Cherney to negotiate his part of the deal.

According to Deripaska just one document was drawn up and signed at the Lanesborough. It covered the payment of $US250m in protection money.

According to Cherney two were drawn up, the first covering $US250m in part payment for his share in the aluminium business. The second covered the balance of that payment and would relate to shares in the business.

While tales of gangsters will provide colour for the case the black-and-white facts will centre on the documents. Are the signatures authentic? Were they signed at the same time? Are the documents copies or the real thing?

The case is set to start today and run for a week. It will then adjourn until September when witnesses, including Chelsea Football Club owner Roman Abramovich, will be called. It will be a long affair that will be measured not just in monetary terms but also the cost to the reputations of each man.

The Sunday Telegraph, London