FILED: NEW YORK COUNTY CLERK 07/30/ :40 AM INDEX NO /2014 NYSCEF DOC. NO. 878 RECEIVED NYSCEF: 07/30/2018

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK LEONID L. LEBEDEV, Plaintiff, IAS Part 39 -against- Index No /2014 Hon. Saliann Scarpulla LEONARD BLAVATNIK and VIKTOR VEKSELBERG, Defendants. MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION FOR SANCTIONS 1 of 26

2 TABLEOFCONTENTS Page PRELIMINARY STATEMENT 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 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 III. THE COURT SHOULD AWARD DEFENDANTS COSTS AND ATTORNEYS' FEES PURSUANT TO 22 NYCRR CONCLUSION...22 i 2 of 26

3 TABLE OF AUTHORITIES Cases L!P=& Cano v. BLF Realty Holding Corp., 243 A.D.2d 390 (1st Dep't 1997) 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) McMunn v. Memorial Sloan-Kettering Cancer Center, 191 F. Supp. 2d 440 (S.D.N.Y. 2002) Providian Nat. Bank v. Forrester, 277 A.D.2d 582 (3d Dep't 2000) Shangold v. Walt Disney Co., 2006 WL (S.D.N.Y. Jan. 12, 2006) Statutory Authorities 22 NYCRR , 21 CPLR , of 26

4 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 (" 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 Agreement 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 time" corporate entities-which Lebedev says was "standard practice at the 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 _"" 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 Ex. 2 (6/21/14 Lebedev Stmt.), Ex. 4 ebedev Dep.), at 92:2-4 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/ of 26

5 "agent."7 Lebedev claims that Coral was owned by Bartek' Martin Bartek8-a race car driver sponsored by Lebedev's company, Sintez Corporation ("Sintez")-and was "independent" of Lebedev.9 Lebedev. 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 Coral" 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 Coral" "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 Coral" 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.), (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 describi Coral as "an ind ndent enti from Lebede Ex. 4 (Lebedev Dep.), at 730: Ex. 11 (Am. Compl.), 96. See note 6, supra. Com are Ex. 13 Res onses at Res onse No. 120 Kuznetsov from Lebedev's Sintez office at 29/1 Malaya Nikitskaya). with Ex. 14 Lebedev RFA and Ex. 15 (fax from Lebedev to 2 5 of 26

6 perjury by paying Coral's former director, Liam Grainger, several thousand euros to sign a onepage letter-drafted by a lawyer who worked in the law firm that represents Lebedev in Cyprusl3- 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: 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 to Grain er re esti that he si n the attached letter she drafted); Ex. 17 (Henkelmann Dep.), at 216: Ex. 18 (3/30/15 Grainger Stmt.). " Ex. 19 6/30/16 Grain er De. at 20:18-25 Ex. 20 d.; see also Ex. 21 Ex. 22 Ex. 23 '" See, e.g., Ex. 24 (CORALBNP00326 Ex. 25 ORALBNP x. 26 LBNP Ex. 27 (CORALBNP (" 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."). 3 6 of 26

7 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- system" seeking function of the judicial such as a "[f]raud on the court" which "injects process" misrepresentations and false information into the judicial 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, (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 authorizes awards of costs and 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 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 to Blavatnik); Ex. 29 (Draft Complaint), $$ 6, of 26

8 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 Court, 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 Coral"; his assertions that "he has never owned or controlled Coral";25 Coral"; and his counsel's representations that he had no ability to obtain Coral documents.26 documents. Lebedev testified that he did not own or control Coral, and never had.27 had. He testified that Coral was an "independent entity"28 owned and controlled by Martin Bartek.29 Bartek. 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 ind ndent com an it wasn't his corn an in the sense that he owned it." the corn an or had control over. ²³ See note 6, supra. 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" Coral."); Ex. 11 (Am. Compl.), ptt ("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 Coral" controlled Coral"). 27 See note 6, supra. 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 De. at 6:21-7: Ex. 2 (6/21/14 (" Lebedev Stmt.), 38 ("Mr. Bartek was the 5 8 of 26

9 30 He testified that his relationship with Coral was limited to appointing it to receive funds for him from Defendants,3¹ 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 the Coral account at BNP into which Defendants paid over $13 million for him in late 2002 and early He testified that the name Hilarious Bagdasarian2 5 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 (Lebedev's Counsel: "we believe the position to be that the beneficial owner of Coral is Bartek"). -" 30 Ex. 4 (Lebedev Dep.), at Ex. 2 (6/21/14 Lebedev Stmt.), 38, 40, 44; Ex. 5 (7/3/14 Lebedev Stmt.), Ex. 32 6/22/18 Lebedev Rule 19-a Statement Dkt. No. 778 Ex. 4 Lebedev D at 119: Ex. 5 (7/3/14 Lebedev Stmt.), Ex. 4 (Lebedev Dep.), at 397: Id. at 398: Ex. 34 (2/11/14 Vedomosti Interview), at Ex. 35 (7/10/14 Lebedev Stmt.), of 26

10 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 Philippou. She worked for years with a Sintez lawyer named Vadim Ibadov-a close associate of Lebedev's4 Lebedev's ' who Lebedev retained to collect evidence for this case.42 case. 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 effect. ' On Lebedev's behalf, Henkelmann paid Grainger for 38 Ex. 18 (3/30/15 Grainger Stmt.). 39 Ex. 36 (11/3/14 Lebedev Letter to Henkelmann). 40 Ex. 37 (5/2/18 Hearing Tr.), at Id. at Ex. 38 (6/28/17 Lebedev Aff.), 31, Ex. 19 (6/30/16 Grainger Dep.), at Ex. 16 (3/18/15 Henkelmann 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: of 26

11 his one-page statement,46 statement, 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 were~'ss >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 documents. 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, , 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 Ac uisition Agreement), 4.1. Thus, although Henkelmann claimed (Ex. 17 (Henkelmann Dep.), at 198), Lebedev controlled its accounts in Ex. 18 (3/30/15 Grainger Stmt.). 48 Ex. 19 (6/30/16 Grainger Dep.), at (r 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."). so Ex. 39 (5/15/18 Special Master's Discovery Order), Dkt. No of 26

12 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: 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 aroduced an unauthenticated Coral ledger covering Ex. 41 (Coral Ledger). 52 Ex. 20 vhich 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 L 21 Ex. 22 here 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 g 55 Ex. 21 Ex. 20 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 of 26

13 Contrary to Lebedev's testimony that Bartek owned Coral,58 when Coral opened the BNP account in 1999, Coral identified Lebedev as th 559 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 61 ³ Thus, 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 57 Ex Ex. 2 (6/21/14 Lebedev Stmt.), Ex Ex. 2 (6/21/14 Lebedev Stmt.), Ex The ledger produced by Lebedev indicates that 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 of 26

14 4 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 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 c [ Bartek, on the other hand, was not authorized to-and based on BNP's records did not 64 See, e. 65 Ex. 2 (6/21/14 Lebedev Stmt.), Ex. 9 (8/9/17 (8/9/17 Swiss Letter Rogatory), Dkt. No. 428, at Schedule A. 67 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. Compare Lebedev" Ex. 15 (9/18/2002 fax "By order of L.L. and identifying Coral as the company to represent Lebedev's interests with resaect to the Promissory Note) (faxed from Sintez number ); with Ex of 26

15 8 Lebedev's testimony that Coral was Bartek's company cannot be squared with these newly produced documents. nd signed the 2003 Acquisition Agreement pursuant to which Lebedev admits he disposed of his alleged right to receive income from Defendants' joint '" Ex. 2O "9E.. Ex. 48 E.. Ex. 49 ' E.. Ex. 54 ii E.. Ex. 47 Lebedev's witness, Nikita Belous, who claims to have received instructions from Bartek and I a Sanochkin rather than from Lebedev see Ex. 66 6/19/14 Belous Stmt. 6 And while Belous claims to have been working for Coral at the relevant time (id. 4), he i'e.. Ex (" Ex. 66 (6/19/14 Belous Stmt.), 6 ("The head of [Coral's] Moscow Representative Office was Mr. Ilya Sanochkin.") of 26

16 venture company.75 company. ' Indeed, Lebedev personall [ 76 The payments also included, Thus, Lebedev was controlling and funding not only Coral's day-to-day activities but also Coral's extraordinary lending and investment transactions. ] hus, 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 5 Ex. 2 (6/21/14 Lebedev Stmt.), 54 ("I chose [to] sell the income rights... back to Messrs Blavatnik and Vekselberg."). 76 Ex, Ex E.g., Ex. 68 7" Se6'., See, 6..<x e.. Ex. 71 " Ex. 4 (Lebedev De r),.,. at 264:8-265:10 x. 38 (6/28/17 Lebedev Aff.), tilt 6-10 (Lebedev owned 40% of Sintez Corporation until the end of 2002, when he transferred his stake to "certain business partners"). sa so E<, E Ex of 26

17 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 at all relevant times. Second, the facts that show that Coral was serving as an agency company for Lebedev and that Lebedev-and not Bartek-was Coral's principal. Third, the ~confirm 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 trading, Bartek-Coral's supposed owner-was which is inconsistent with ownership. Anc 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 This activity is consistent with Coral's status as an Irish agency 81 Ex of 26

18 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 account. The fact that shows that Lebedev was the principal of this Irish agency company which engaged in activity for Lebedev's benefit. Fifth, the fact that Lebedev urther confirms that Coral was not the "independent company" he has claimed it was. Independent companies do not Such a practice is consistent with common ownership and, therefore, Coral's ~showshow that Lebedev also owned Coral. BNP's production also includes ] his 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. Robert at 16:26-17:1, 58:18-59: id. at 41:10-2 (6/29/16 Grai r at 103:3-11 Ex. 82 Ex. 8 'Donovan De at 40:14- "4 Ex. 4 Lebedev De. at 30:6-32:10 97:24-98:3 85 Ex. 84 (CORALBNP ). 86 Ex. 2 (6/21/14 Lebedev Stmt.), of 26

19 that the funds Coral received for Lebedev were paid into an account that 37 And the BNP statements, like the unauthenticated Coral ledger that Lebedev previously produced,88 do not reflect 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 grace is 91 As with all of Lebedev's directions, BNP 2 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. 38 Ex. 41 (Coral Ledger). 39 Ex. 32 (6/22/18 Lebedev Rule 19-a Statement), Dkt. No. 778, Ex. 84 (CORALBNP ). ' Ex. 85 CORALBNP Ex Ex. 86 (CORALBNP000198) of 26

20 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 (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 of 26

21 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 oath. 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 Coral. The BNP production proves that Lebedev's repeated denial of his ownership and control of Coral is a fraud. During the relevant period, Lebedev:, There can now Coral" be no dispute that Lebedev's assertions that he has "never owned or controlled and operations" Grainger's suborned statement that Lebedev "had no involvement in Coral's were knowingly false and designed to bolster Lebedev's position on a central issue. See, e.g., CDR Créances, 23 N.Y.3d at (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, (S.D.N.Y. 2002) (dismissing action where plaintiff "intentionally and in 9³ See note 6 su ra' see also Ex. 4 Lebedev Dep.), at 6:21-7:7 ; id. at 372: Ex. 18 (3/30/15 Grainger Stmt.). "Ex. 20 "Id.' see also 97see note 18,supra of 26

22 bad faith repeatedly lied about where she was living for the purpose of unfairly bolstering her claim" 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 it strains credulity that he would have no records of these transactions in his files. Second, as th [ and he could have asked BNP to produce these documents upon Defendants' request at the outset of discovery in 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 Ex. 14 Lebedev RF onses at Res onse No Ex. 10 (2/10/16 Miller Letter), at of 26

23 "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 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[1]fully," and "warrant[] heavy sanctions, including striking [Lebedev's] pleadings and dismissal of the action." See id., at , 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 of 26

24 3126; see also CDR Créances, 23 N.Y.3d at 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 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 III. THE COURT SHOULD AWARD DEFENDANTS COSTS AND ATTORNEYS' FEES PURSUANT TO 22 NYCRR Under 22 NYCRR , a court may, in its discretion, award costs-including fees" "reasonable attorney's for "frivolous" conduct. 22 NYCRR (a); Providian Nat. Bank v. Forrester, 277 A.D.2d 582, (3d Dep't 2000). Conduct is frivolous if "it asserts material factual statements that are false." 22 NYCRR â (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 litigation" defending this litigation") of 26

25 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 of 26

26 Dated: July 30, 2018 QUINN EMANUEL URQUHART New York, New York & SULLIVAN LLP By: /s/ Richard I. Werder, Jr. Richard I. Werder, Jr. Stephen A. Broome Ron Hagiz Kimberly E. Carson 51 Madison Avenue, 22nd Floor New York, New York Tel: GANFERSHORELEEDS & ZAUDERER LLP Mark C. Zauderer 360 Lexington Avenue New York, New York Tel: (212) Attorneys for Defendant Len Blavatnik WHITE & CASE LLP By: /s/ Paul B. Carberrv Paul B. Carberry Owen Isaac C. Pell S. Glassman 1221 Avenue of the Americas New York, New York Tel.: Attorneys for Defendant Viktor Vekselberg of 26