News

A defamation claim by Russian oligarch Roman Abramovich in the Federal Court has prompted questions over whether public interest journalism is sufficiently protected by Australian law. By Kieran Pender.

Roman Abramovich’s day in Australian court

Russian businessman Roman Abramovich in Turkey in late March.
Russian businessman Roman Abramovich in Turkey in late March.
Credit: Sergey Karpuhin / POOL / Sputnik via AFP

At 1pm on the last Tuesday in June last year, Kennedys, an international law firm, filed three legal documents with the Federal Court. Within, the lawyers argued that a client of the firm had been grievously defamed. Filed in the court’s New South Wales registry, at first glance the documents were nothing out of the ordinary. Australian defamation law is notoriously plaintiff-friendly and Sydney has emerged as Australia’s libel capital. Another day, another suit.

Only the plaintiff, Kennedys’ client, was no ordinary litigant. The defamation claim was brought by Roman Arkadyevich Abramovich, a Russian oligarch, against publishing company HarperCollins. It alleged that in publishing Putin’s People: How the KGB Took Back Russia and Then Took on the West, a book by British journalist Catherine Belton, HarperCollins had defamed Abramovich.

In the seven-page statement of claim, Kennedys argued that the book contained many defamatory imputations. These included that Abramovich “has a corrupt relationship with Russian President Vladimir Putin”, was acting as his “cashier” and “custodian of slush funds”, had “covertly provided President Putin with access to [his] fortune” and had acquired English soccer powerhouse Chelsea in the early 2000s “at the secret direction of President Putin, in order to infiltrate, manipulate and corrupt the British elite”.

The Federal Court proceedings in Australia were brought in parallel with a defamation case lodged by Abramovich against HarperCollins and Belton in England. Indeed, Abramovich was not the only Russian oligarch to sue in relation to Putin’s People. In early 2021, within a period of two months, five separate defamation claims were lodged in English courts by Russian oligarchs and oil giant Rosneft. “David v Goliath on steroids,” was how Arabella Pike, a HarperCollins publishing executive, would subsequently describe the wave of litigation. “A phalanx of the world’s richest men ganging up against a lone journalist.”

Faced with this global legal war, HarperCollins, represented in Australia by Banki Haddock Fiora (BHF), hit back. In an interlocutory application filed in August 2021, the publishing company applied for the litigation to be thrown out, permanently stayed or paused until the English proceedings had been determined. They also applied for security of costs – in other words, for an order that Abramovich be required to deposit a large sum of money with the Federal Court, to pay the publisher’s legal fees, estimated at $5 million if he lost the case.

It was a bold gambit. In subsequent submissions, HarperCollins described the Russian billionaire’s Australian litigation as an “abuse of process”. The following month, Justice Robert Bromwich heard arguments about the preliminary application, with Abramovich represented by Sue Chrysanthou, SC. Bromwich’s decision shaped up to be an important judgement on how the court would approach parallel defamation litigation.

But then, in December last year, Abramovich’s multijurisdictional proceedings were settled. The settlement came following a preliminary legal victory for the oligarch in England, with the High Court’s Justice Amanda Tipples finding that the complained-of sections in Putin’s People “are all defamatory of the claimant at common law”. Tipples added: “The defendants have not yet been required to file a defence and so no substantive defences have been raised … the court is not determining whether allegations made in the Book … are true.”

HarperCollins agreed to make minor retractions to the book, “to record the position more accurately, and include additional comments from Mr Abramovich’s spokesperson”. The publisher also agreed to make a payment to an unnamed charity in recognition of a factual error. In a statement, HarperCollins said it and Belton “apologise that these aspects of the book were not as clear as they would have liked them to have been and are happy to have now clarified the text”.

This might have been the end of the story. Abramovich’s Australian litigation was only sparsely reported. The settlement came before Bromwich had delivered his decision, meaning no judgement was ever published. This unusual David v Goliath case would have been consigned to legal history, remembered as little more than a footnote in a defamation textbook. Until Russia invaded Ukraine. What a difference a war can make.

 

It started, as most legal fights do, with a letter. On March 23 last year, Kennedys wrote to the publisher’s lawyers at BHF. The letter set out various alleged defamatory imputations in Putin’s People, almost identical to those made out in England, and noted the “considerable reputational harm” purportedly caused to Abramovich. The letter threatened to commence litigation unless HarperCollins suspended publication, issued an apology and retraction and paid financial compensation.

Two weeks later, BHF wrote back. “Our client considers this a deliberate tactic by a rich foreign billionaire for the purpose of placing pressure on the English publisher,” the letter said. “Bringing effectively concurrent proceedings over precisely the same subject matter constitutes an abuse of process.”

Abramovich was unmoved and proceedings in the Federal Court were commenced. In their legal filings, Kennedys, on instruction from Abramovich, sought to justify his Australian claim on the basis of his ownership of Chelsea, an internationally popular soccer club. “Chelsea FC has had a number of highly esteemed Australian players in its ranks including Mark Bosnich, Mark Schwarzer, David Mitchell, Tony Dorigo, and more recently, the champion Australian women’s player, Samantha Kerr.”

The publisher’s lawyers responded with football history. “Neither David Mitchell nor Tony Dorigo played for Chelsea FC at the time the Applicant owned the club,” they offered in reply. “Both players, as I understand it, played for the club in the 1980s and 1990s.” The firm added: “The Applicant is a man of apparently great wealth who wants to sue in Australia in circumstances where it cannot seriously be suggested that his reputation as the owner of a London football club has any real and substantial connection to this jurisdiction”.

With hindsight, the appeal of Abramovich’s lawyers to Chelsea and its global brand is ironic. Following Russia’s invasion of Ukraine in late February, the British government compelled the oligarch to sell the club. At the time of writing, Chelsea remained in limbo. In response to the conflict, sanctions against Abramovich and other Russian oligarchs were announced by governments in Australia, Britain and Canada.

In a document issued by Britain’s Office of Financial Sanctions Implementation in early March, Abramovich is described as a “pro-Kremlin oligarch … associated with a person who is or has been involved in destabilising Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin”.

The document goes on to allege that Abramovich had a “close relationship for decades” with Putin, which included obtaining financial or other material benefits for Putin and the Russian state, and that in return he “received preferential treatment and concessions from Putin”. It even alleges that Abramovich is directly contributing to the ongoing war effort through his major shareholding in a Russian company, Evraz, which is believed to be supplying steel to the Russian military for the construction of tanks.

 

The fallout from the invasion of Ukraine casts new light on Abramovich’s use of the Australian court system against the publisher of critically acclaimed investigative journalism. The lawsuit prompts questions about Australia’s defamation regime and whether public interest journalism is sufficiently protected. The Saturday Paper has reviewed hundreds of pages of legal filings, obtained for the first time from the Federal Court, to inform this reporting.

London is often described as the libel capital of the world, frequently used by foreign litigants to vindicate their reputations. Over the past month, there has been much soul-searching about the ease with which Russian oligarchs, assisted by English lawyers, had been able to use British law and courts to their advantage. The capital’s central business district has been mockingly described as “Londongrad”. A spokesperson for Prime Minister Boris Johnson recently warned law firms they should “think very carefully if they are still continuing to do anything that props up the Putin regime”.

According to Professor David Rolph, a defamation expert at the University of Sydney Law School, Abramovich’s case was the exception rather than the rule in Australia. “It is relatively unusual for wealthy foreign litigants to sue for defamation in Australia,” he says. “Although Australian defamation laws are sometimes criticised as being pro-plaintiff, the tyranny of distance on this occasion serves as a disincentive for foreign plaintiffs bringing proceedings in Australia.”

But while atypical, the Abramovich case shows that if Sydney has not followed London as a global libel hub, it has been by accident rather than design. “There are mechanisms available for dealing with vexatious or oppressive parallel proceedings,” adds Rolph. “The tests for these forms of relief, though, are high. Australian defamation law has been criticised, with some justification, for being insufficiently protective of public interest journalism.”

Recent law reform, he says, “may change that” but new provisions have “yet to be tested”.

In legal filings, HarperCollins’ lawyers were critical of Abramovich’s Australian lawsuit. The London litigation, commenced first, involved almost identical defamatory imputations against the same passages in the same book. HarperCollins’ British legal entity was a party to both claims; the remedies sought in the London litigation were not limited to the British publication of Putin’s People.

“All relief available to [Abramovich] from this [Australian] Court can and will be provided in the English Proceedings should he succeed there,” submitted HarperCollins’ barristers. Parallel litigation in Australia would therefore impose a “disproportionate and oppressive cost”. Noting that “an insignificant number of copies” of Putin’s People had been sold in Australia – later calculated as 46 in hardcopy and 761 in paperback – the publisher’s lawyers had earlier argued: “This simply reinforces the fact that Australia is an inappropriate venue for this totally unnecessary litigation.”

Abramovich’s barristers made contrary submissions: “Mr Abramovich has a major (albeit indirect) business interest in Australia, given Chelsea FC’s large fan base here, and as such, he has a genuine and significant interest in vindicating his reputation in this country … Mr Abramovich is not seeking to claim ‘double compensation’.”

Because the case settled, it is unclear whether the Federal Court would have summarily dismissed Abramovich’s claim – or let the case proceed to a full hearing. Even to get to that early stage of the litigation, HarperCollins had to spend an estimated $250,000. The total cost of the British litigation for the publisher, against Abramovich and the other oligarchs, was almost $3 million. Millions more in legal fees would have been spent had the cases continued. “These are sums that can bankrupt publishers,” HarperCollins’ Arabella Pike said, “let alone individual writers.”

Kennedys said in a statement the determination of HarperCollins’ interlocutory application involved “complex legal arguments from senior counsel”. The law firm added that, in its view, as a consequence of the initial English decision, “Mr Abramovich’s cause of action was therefore established and was not an abuse of process or vexatious.” Kennedys added: “At the time of the proceedings, Mr Abramovich was not the subject of any financial sanction nor was it contemplated that he would be. The judgment meant that HarperCollins would be liable for defamation unless it had a defence ... the judgment resulted in the parties, HarperCollins and Mr Abramovich, agreeing to settle the proceedings in both jurisdictions.”

The Saturday Paper is not suggesting that Kennedys acted improperly in bringing the proceeding on behalf of Abramovich.  Kennedys was merely acting on instructions from Abramovich, who was entitled to commence the Federal Court proceeding because a book containing potentially defamatory imputations against the oligarch was published in Australia.

This article was first published in the print edition of The Saturday Paper on April 23, 2022 as "Suiting up".

A free press is one you pay for. Now is the time to subscribe.

Kieran Pender is a writer and lawyer.

Sharing credit ×

Share this article, without restrictions.

You’ve shared all of your credits for this month. They will refresh on June 1. If you would like to share more, you can buy a gift subscription for a friend.
Loading...