FILED: NEW YORK COUNTY CLERK 06/22/ :09 PM INDEX NO /2017 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 06/22/2017

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x MAGOMED MAGOMEDOV and AKHMED BILALOV, Plaintiffs, Index No /2017 -against- LEONID L. LEBEDEV, LEONARD BLAVATNIK and VIKTOR VEKSELBERG, COMPLAINT Defendants x Plaintiffs Magomed G. Magomedov and Akhmed Bilalov ( Plaintiffs ), by their attorneys, Kobre & Kim LLP, for their complaint against Leonid L. Lebedev, Leonard Blavatnik and Viktor Vekselberg, hereby allege as follows: NATURE OF THE ACTION 1. This is an action for breach of fiduciary duty, anticipatory breach of contract, fraud, unjust enrichment and conversion against Lebedev; aiding and abetting breach of fiduciary duty, unjust enrichment and conversion against Blavatnik and Vekselberg; and declaratory judgment against all three defendants. 2. Plaintiffs Magomed G. Magomedov and Akhmed Bilalov were cheated out of over $1.3 billion dollars by their joint venture partner, Defendant Leonid L. Lebedev with the aid of Defendants Leonard Blavatnik and Viktor Vekselberg. This suit seeks compensation for the Defendants wrongful actions. 1 1 of 26

2 3. Plaintiffs and Lebedev are Russian businessmen. Each of them was a former shareholder in the Russian oil company OJSC Nizhnevartovskneftgaz ( NNG ). In 1997, Plaintiffs and Lebedev entered into a joint venture in which they agreed to act jointly in all matters relating to their collective NNG shareholdings and to share in any proceeds derived from those shareholdings, including but not limited to the sale of those shares. 4. Plaintiffs and Lebedev s collective stake in NNG proved to be extremely valuable during Russia s privatization of its oil industry in the 1990s. 5. Defendants Blavatnik and Vekselberg needed to acquire the NNG shares to consummate a transaction involving another privatized company affiliated with NNG. Accordingly, they approached Plaintiffs in 1997 to try to persuade them to sell their shares. Plaintiffs declined, explaining that their joint venture with Lebedev prevented them from entering into a unilateral sale of their NNG shares. 6. Upon information and belief, Blavatnik and Vekselberg then turned to Lebedev to try to convince him to sell shares of NNG to them. Unlike Plaintiffs, Lebedev secretly agreed to sell the collective NNG shares to Blavatnik and Vekselberg in exchange for a stake in Blavatnik and Vekselberg s own venture. Lebedev deliberately concealed that agreement from Plaintiffs. And Blavatnik and Vekselberg despite knowing about Lebedev s joint venture with Plaintiffs assisted him. Lebedev was paid $611 million as part of this transaction with Blavatnik and Vekselberg. 7. In 2013, Blavatnik and Vekselberg reaped the rewards of those machinations when the Russian state-owned oil giant Rosneft paid more than $55 billion to acquire their joint venture (which now controlled the NNG shares, including the shares wrongfully obtained from Plaintiffs). After Blavatnik and Vekselberg refused to pay Lebedev his share from the Rosneft sale, Lebedev 2 2 of 26

3 filed suit in this Court in February 2014, seeking more than $2 billion in damages. See Lebedev v. Blavatnik, No /2014 (Sup. Ct. New York Country 2014) (the Lebedev New York Action ). 8. Plaintiffs, no less than Lebedev, are entitled to their rightful share of those proceeds. They are also entitled to their share of the $611 million already paid to Lebedev. 9. Accordingly, when Plaintiffs learned of Lebedev s breaches in 2014, Magomedov (on behalf of Plaintiffs) confronted him. In that discussion and discussions that followed, Lebedev admitted to selling his and Plaintiffs shares to Vekselberg and Blavatnik. Lebedev then reaffirmed his obligations to act jointly with respect to all matters concerning the NNG shares, including to share in the proceeds associated with the NNG shares. 10. In addition, Lebedev and Magomedov (who entered the agreement on behalf of the Plaintiffs) entered into a new agreement pursuant to which Lebedev agreed to share the proceeds of his dispute with Blavatnik and Vekselberg. Having entered into a new agreement with Lebedev, Plaintiffs did not bring a lawsuit against Defendants for their earlier conduct. 11. However, in 2015, Lebedev began to insist that he wanted to renegotiate the terms of the deal. Magomedov did not want to re-negotiate, because he (on behalf of Plaintiffs) had been performing under that agreement for some time already. Lebedev subsequently broke off all contact with Magomedov in January Thereafter, it became clear to Plaintiffs that Lebedev did not intend to honor the joint venture or subsequent agreement. 12. By disavowing this new agreement and repudiating his obligation to share the proceeds from the NNG shares, Lebedev again breached his obligations to Plaintiffs, leaving them with no choice but to bring this action. 3 3 of 26

4 PARTIES 13. Plaintiff Magomed G. Magomedov is a citizen of the Russian Federation and a resident of Moscow. 14. Plaintiff Akhmed Bilalov is a citizen of the Russian Federation and a resident of Florida. 15. Upon information and belief, Defendant Leonid L. Lebedev is a citizen of the Russian Federation and Cyprus and a resident of Cyprus. He is a Plaintiff in a separate but related action against Defendants Leonard Blavatnik and Viktor Vekselberg and has appeared in this Court in the Lebedev New York Action. 16. Upon information and belief, Defendant Leonard Blavatnik is a citizen of the United States with his principal residence in New York City. Blavatnik is the founder and chairman of Access Industries, Inc., a holding company for his business interests, with a principal place of business in New York, New York. 17. Upon information and belief, Defendant Viktor Vekselberg is a citizen of Russia. He owns and controls the Renova Group, a holding company for his business interests, which has maintained an office in New York. JURISDICTION AND VENUE 18. This Court has jurisdiction pursuant to CPLR 301 because at least one defendant is domiciled in New York. In addition, this Court has jurisdiction pursuant to CPLR 302(a)(1) because the defendants transact business in New York and have transacted business in New York related to this action, and pursuant to CPLR 302(a)(4) because at least one defendant owns, uses or possesses real property in New York. Additionally, defendants have waived any objection to jurisdiction through their voluntary and continued participation in legal proceedings in New York. 4 4 of 26

5 19. Venue is proper under CPLR 503(a) because at least one defendant resides in New York County. FACTUAL ALLEGATIONS A. Plaintiffs and Defendant Lebedev Together Controlled a Key Percentage of NNG Shares 20. Plaintiffs Magomed G. Magomedov and his cousin Akhmed Bilalov are highly successful Russian entrepreneurs with ownership interests in numerous businesses, some of which they co-own. Plaintiffs are former Members of the Federation Council, the upper house of the Federal Assembly of Russia, and Bilalov is also a former member of the State Duma, the lower house of the Federal Assembly of Russia. 21. Formerly, the Russian Federation was a major shareholder in NNG. As part of its privatization of the oil and gas industry during the 1990s, Russia created a new company in 1995 known as OJSC Tyumenskaya Neftyanaya Kompaniya ( TNK ) to hold its interests in oil and gas companies like NNG. As a result, TNK became a shareholder with approximately 38% of shares in NNG. NNG was a principal asset of the TNK holding, and thus accumulation of majority control over NNG in the hands of TNK was one of the principal aims of the privatization process. 22. Plaintiffs became shareholders in NNG the following year, controlling 5.37% of NNG s total shares. 23. Plaintiffs first met Lebedev in or around 1996, through activities related to NNG. Through those contacts, Lebedev came to understand that Plaintiffs controlled 5.37% of NNG shares. 24. By in or around early 1997, Lebedev, through entities he controlled, owned and controlled 5.13% of NNG shares. 5 5 of 26

6 B. The TNK Tender Leads to A Battle for Control of the NNG Shares 25. Pursuant to Russian decree, 45% of TNK shares were to be reserved for the State and 55% were to be sold at an auction. Russia began to dispose of the first 10% of the equity in TNK in 1996, and in 1997 Russia placed another 40% of the TNK shares for public auction. 26. In or around the first half of 1997, Lebedev approached Plaintiffs about participating in the tender of TNK. Plaintiffs agreed and, as part of that cooperation, issued a power of attorney to allow Lebedev to vote Plaintiffs NNG shares at one specific shareholders meeting of NNG. Through this cooperation, Lebedev was able to put himself on the board of directors of NNG. 27. In this way, Plaintiffs began their relationship of trust and confidence with Lebedev. 28. The bid for 40% of the shares of TNK was ultimately awarded to an investment group of individuals and companies controlled by Blavatnik and Vekselberg. However, the winning investment group did not get immediate control over NNG, because TNK merely possessed 38% of the shares of NNG, which was below the control level. Upon information and belief, per the terms of the TNK privatization tender, the winning bidder was required subsequently to fulfill certain conditions, including ensuring acquisition of the majority of NNG shares. 29. Another group, which consisted of the then CEO of NNG, Mr. Paliy and a number of other Russian businessmen (together, the Paliy Group ) controlled about 40% of the NNG shares. Thus, a battle for control of NNG ensued between Blavatnik and Vekselberg s group and the Paliy Group. C. Plaintiffs and Lebedev Form A Joint Venture Regarding the Use and Sale of the NNG Shares 30. It soon became apparent that if Lebedev and Plaintiffs combined their 10.5% NNG shares, they would collectively have tremendous leverage in this battle for control. This is because the other outstanding shareholders stakes were insignificant. Thus, their combined 10.5% shares 6 6 of 26

7 could give one of the groups battling for control the majority or close to the majority of the NNG shares. 31. Lebedev and Plaintiffs met in or around August 1997 to discuss cooperation regarding those shares. In that meeting, the Plaintiffs and Lebedev entered into a joint venture regarding the NNG shares. 32. Pursuant to this joint venture, the parties agreed to act jointly in all matters related to NNG, including that neither could sell or take any other unilateral action with respect to any part of the combined 10.5% shares without the consent and agreement of the other, and to share in any profits from the sale (or appreciation) of the joint 10.5% NNG shares. (The 1997 Joint Venture ). 33. In that August meeting, Lebedev requested a power of attorney from Plaintiffs authorizing him to act on their behalf with respect to the potential sale of the shares. However, Plaintiffs declined to grant the power of attorney to Lebedev because they did not want to give Lebedev the power to act without their express consent. Rather, they wanted to ensure they maintained input regarding any sale and use of the joint NNG shares. 34. Thus, it was clear to Lebedev that a key component of the 1997 Joint Venture was that neither joint venture partner could enter into any agreement regarding the sale or use of the shares without the consent of the other joint venture partner. 35. From August to December 1997, Plaintiffs and Lebedev met several times to discuss NNG matters and to strategize about next steps. 36. During those meetings Plaintiffs and Lebedev continued to develop their relationship of trust and confidence. 37. During one of those meetings, Plaintiffs and Lebedev agreed to align themselves with the Paliy Group. 7 7 of 26

8 38. In addition, Plaintiffs agreed to continue to provide support for Lebedev to retain his seat on the board of NNG. 39. Plaintiffs and Lebedev also continued to act jointly with respect to the corporate governance of NNG, including coordinating their votes on NNG governance matters. D. Blavatnik and Vekselberg Attempt to Induce Plaintiffs to Sell their NNG Shares 40. As noted above, the 10.5% stake in NNG that Plaintiffs and Lebedev owned and controlled was crucial to Blavatnik and Vekselberg s ability to complete their acquisition of the 40% stake in TNK and reap the benefits of that acquisition by accumulating control over NNG, the principal asset of TNK. 41. Between September and October 1997, representatives of Blavatnik and Vekselberg met with Magomedov on multiple occasions in an effort to persuade Plaintiffs to sell their shares. 42. In an October 1997 meeting at the Baltschug Hotel in Moscow, Vekselberg and two of his associates offered $90 million for Plaintiffs NNG shares. 43. Plaintiffs informed Lebedev of the offer made by Vekselberg. Lebedev agreed with Plaintiffs that they should not allow Vekselberg and Blavatnik to acquire their shares on a piecemeal basis but rather should insist on selling their stakes jointly pursuant to the joint venture agreement so as to maximize profits. 44. Magomedov informed Vekselberg and his associates of Plaintiffs joint venture with Lebedev regarding the NNG shares. Magomedov told Vekselberg that Plaintiffs and Lebedev would consider an offer for the entire 10.5% stake but were rejecting any offer for a portion of those shares due to the joint venture. 45. As a result, Vekselberg and, upon information and belief, Blavatnik knew (1) that Plaintiffs and Lebedev had entered into a joint venture regarding the NNG shares; (2) that the joint 8 8 of 26

9 venture had joint control over the 10.5% NNG shares; and (3) that Lebedev just like Plaintiffs could not unilaterally sell his NNG shares to Blavatnik and Vekselberg without violating his obligations to his joint venture partners. E. Lebedev s Fraudulent Breach of his Fiduciary Duties to Plaintiffs with Blavatnik and Vekselberg s Assistance 46. Undeterred, Vekselberg and Blavatnik, upon information and belief, then approached Lebedev and sought the sale of his NNG shares. 47. Unlike Plaintiffs, Lebedev was willing to double cross his joint venture partners. In violation of his obligations to Plaintiffs, Lebedev: (1) secretly agreed in or around late 1997 to sell his 5.13% stake in NNG to Blavatnik and Vekselberg, and (2) never obtained Plaintiffs consent for that sale or disclosed the transaction to Plaintiffs at the time. 48. In addition to selling his own 5.13% stake in NNG, on information and belief, Lebedev also secretly agreed in or around late 1997 to help Blavatnik and Vekselberg acquire the 5.37% stake that Plaintiffs still owned. 49. Lebedev never obtained Plaintiffs consent and never disclosed to Plaintiffs that he had agreed to work with Blavatnik and Vekselberg to obtain Plaintiffs shares. Upon information and belief, in return for Lebedev s assistance in acquiring the entire 10.5% stake in NNG, and in further aid and affirmative assistance of Lebedev s fraudulent breach of the duties owed to Plaintiffs, Blavatnik and Vekselberg promised Lebedev a portion of the profits in their own venture. 50. Despite the fiduciary duties owed to Plaintiffs, Lebedev kept his betrayal a secret from Plaintiffs. He did not tell Plaintiffs about the sale of his own NNG shares or his secret plan (as alleged below) to take control of Plaintiffs 5.37% stake in NNG. 9 9 of 26

10 51. Plaintiffs could not, with any reasonable diligence, have discovered Lebedev s surreptitious breaches of his duties to them or Blavatnik and Vekselberg s conduct in aiding and abetting those breaches. F. Lebedev s Fraudulent Conduct Induces Plaintiffs to Transfer The NNG Shares 52. Upon information and belief, Lebedev schemed to take control of Plaintiffs 5.37% stake in NNG so he could make good on his promise to Blavatnik and Vekselberg. 53. That opportunity presented itself in connection with a legal dispute between Plaintiffs and an individual named Oleg Kim. 54. Kim had previously obtained a judgment through a company he owned against a company controlled by Plaintiffs. Although Plaintiffs had not yet exhausted all options with respect to that judgment, they agreed to resolve it after Kim indicated that he would settle in exchange for Plaintiffs NNG shares. 55. Kim met with Plaintiffs multiple times to discuss the dispute and proposal that it be resolved by Plaintiffs agreement to transfer to him their NNG shares. 56. Notably, Lebedev was present at many of those meetings and, upon information and belief, was actually secretly working with Kim in connection with these negotiations to obtain Plaintiffs shares of NNG. 57. Lebedev did not, at any time during the course of these negotiations, divulge to Plaintiffs (1) the secret deal he had previously struck behind Plaintiffs backs with Vekselberg and Blavatnik; (2) that Vekselberg and Blavatnik still very much valued Plaintiffs NNG shares; (3) that Lebedev, upon information and belief, had promised Vekselberg and Blavatnik he would obtain and transfer to them Plaintiffs NNG shares; and (4) that Lebedev stood to make a fortune of 26

11 from his deal with Blavatnik and Vekselberg once the Plaintiffs let go of their shares. This was all material information and Lebedev had a duty to disclose it. 58. Thus, having been kept in the dark by Lebedev concerning his dealings with Blavatnik, Vekselberg and Kim, and having further been led to believe that their NNG shares value had diminished, Plaintiffs decided with the knowledge and support of Lebedev to settle with Kim and transfer the NNG shares to him. 59. Plaintiffs would not have transferred the shares to Kim on the terms on which they did had they known that Lebedev had entered into a secret and lucrative deal with Blavatnik and Vekselberg regarding the joint venture partners NNG shares. G. The Combined NNG Shares Lead to a Lucrative Joint Venture Between Lebedev and Blavatnik/Vekselberg 60. Once Plaintiffs transferred their NNG shares to Kim, upon information and belief, Lebedev arranged for the shares to be sold or otherwise transferred to Blavatnik and Vekselberg, fulfilling the rest of his bargain to help them acquire the outstanding shares of NNG. 61. Upon information and belief, in exchange, Lebedev obtained a stake in a joint venture with Blavatnik and Vekselberg. 62. Upon information and belief, the negotiations between Lebedev and Blavatnik and Vekselberg regarding their joint venture took place in New York. As alleged in the Lebedev New York Action the parties met in New York over a three-day period in the spring of 2001, and discussed both their interests in the joint venture and the business of the venture itself. These discussions took place in a series of in-person meetings at Blavatnik's business office, located at Access' offices at 730 Park Avenue; at Vekselberg s personal residence; and during a walk around Central Park. See Lebedev v. Blavatnik, No /2014 (Sup. Ct. New York Country 2014) (Docket No. 12, 46-47) of 26

12 63. As alleged in the Lebedev New York Action, and on information and belief, the terms of that joint venture were memorialized in a written Investment Agreement signed by both Vekselberg and Lebedev in That agreement specified that in consideration for, inter alia, the NNG shares, Lebedev was given a 15% stake in the joint venture with Blavatnik and Vekselberg, and was entitled to receive 15% of any profits earned. Lebedev never disclosed that Investment Agreement to Plaintiffs at the time, even though Plaintiffs had unknowingly contributed half the NNG shares that Lebedev used to acquire that 15% stake. 64. As alleged in the Lebedev New York Action, and upon information and belief, having successfully fulfilled the required contingency in their acquisition of the 40% stake in TNK and control over NNG as TNK s key producing asset by, inter alia, obtaining Plaintiffs NNG shares, Blavatnik and Vekselberg with Lebedev proceeded to parlay their investment into even more valuable holdings through a series of transactions. First, Blavatnik and Vekselberg formed a new joint venture known as the Alfa-Access-Renova consortium ( AAR ) with Alfa Group, another major shareholder in TNK. Upon information and belief, Lebedev s 15% stake in his joint venture with Blavatnik and Vekselberg made him a 7.5% owner of AAR. 65. As alleged in the Lebedev New York Action, and upon information and belief, in February 2003, AAR agreed to form yet another joint venture with the British oil company BP to develop oil and gas resources in Russia. That joint venture was known as TNK-BP. 66. Upon information and belief, in 2001 and 2002, Lebedev was paid $11 million as proceeds resulting from his joint venture with Blavatnik and Vekselberg. Later in 2003, as alleged by Lebedev, he entered an Acquisition Agreement dated June 20, 2003, between an affiliate of Blavatnik and Vekselberg and a company nominated by Lebedev in return for $600 million in cash payments. Upon information and belief, Blavatnik and Vekselberg made all payments due under of 26

13 that agreement. And upon information and belief, Lebedev received other benefits due to the joint venture with Blavatnik and Vekselberg. Plaintiffs were not told about any of the payments or benefits to Lebedev. 67. Finally, in October 2012, the TNK-BP joint venture was sold to Rosneft, the Russian state-owned oil and gas conglomerate, for $55 billion. BP received $16.65 billion in cash and a 12.84% equity stake in Rosneft, while AAR received $27.7 billion in cash. Rosneft s acquisition of TNK-BP closed on March 21, As a result of their 50% interest in AAR, Blavatnik and Vekselberg received $13.8 billion in proceeds from Rosneft. Upon information and belief, Lebedev was entitled to 15% of that amount $2.07 billion under his agreement with Blavatnik and Vekselberg. Half of that $1.035 billion rightfully belonged to Plaintiffs. Nonetheless, Blavatnik and Vekselberg have refused to pay any portion of the Rosneft sale proceeds to either Lebedev or Plaintiffs. H. After His Conduct was Discovered by Plaintiffs, Lebedev Acknowledged His Obligations to Share Proceeds with Plaintiffs 69. On February 4, 2014, Lebedev filed the Lebedev New York Action against Blavatnik and Vekselberg, seeking $2 billion in damages. 70. On February 11, 2014, a Russian Newspaper published an interview with Lebedev where Lebedev disclosed his claim against Blavatnik and Vekselberg. 71. After learning about Lebedev s lawsuit, Magomedov contacted Lebedev on behalf of the Plaintiffs and asked to meet with him to discuss the suit. 72. At that meeting and in discussions that followed, Lebedev admitted that, without Plaintiffs consent, he sold his and Plaintiffs NNG shares to Blavatnik and Vekselberg, although he claimed when confronted that he had been acting on behalf of, and for the benefit of, his joint venture partners all along. Lebedev also reaffirmed his continuing obligations to act jointly with of 26

14 respect to all matters concerning the NNG shares, including to share in the proceeds associated with the NNG shares and entered into a new agreement pursuant to which Lebedev agreed to share the proceeds of his dispute with Vekselberg and Blavatnik. I. Lebedev and Plaintiffs Enter Into a New Agreement: the 2014 Agreement 73. In early March 2014, Magomedov, with his lawyer, Ms. Medvedeva, met with Lebedev at Lebedev s offices to discuss the new agreement. At that meeting and in all further discussions with Lebedev concerning this new agreement, Magomedov acted on behalf of Bilalov. 74. By the end of the March 2014 meeting, in addition to acknowledging that Plaintiffs and Lebedev were still joint venture partners with respect to their NNG shares, they had reached a new agreement pursuant to which Plaintiffs (through Magomedov) and Lebedev agreed to share the proceeds of his dispute with Vekselberg and Blavatnik (the 2014 Agreement ). 75. At the end of that meeting, Magomedov directed Medvedeva to memorialize the agreement. 76. After exchanging drafts through counsel, Magomedov and Lebedev finalized the written memorialization of the agreement in September On or around September 17, 2014, Medvedeva personally went to Lebedev s office to deliver the written contract for execution. Upon receiving the document, Lebedev explicitly told her that the form of the document was acceptable and that he would execute the document and deliver it to Magomedov. 78. At Lebedev s request, Magomedov (on behalf of Plaintiffs) took substantial steps to perform under the contract. 79. Having entered into an agreement shortly after their discovery of Lebedev s misconduct, Plaintiffs did not bring a lawsuit against Defendants at the time. Had they not reached of 26

15 agreement, however, Plaintiffs would have brought a lawsuit against Defendants within two years of their discovery of Defendants misconduct. J. Lebedev Demonstrates His Intent to Breach the 2014 Agreement upon Damages Award or Settlement in the New York Litigation 80. Lebedev and Magomedov continued to meet through January However, Lebedev did not ever sign the agreement, offering a variety of excuses. Starting in 2015, Lebedev attempted to renegotiate the terms of the 2014 Agreement. Plaintiffs continued to insist on the previously agreed terms. 81. In January 2016, again attempting to renegotiate, Lebedev told Magomedov that he would stand by the agreed terms if the agreement also included Plaintiffs assistance with other business interests of Lebedev s. Plaintiffs did not agree, as the 2014 Agreement was already in place, Magomedov had already performed under the agreement and Lebedev could not just unilaterally alter the terms of that agreement or their ongoing 1997 Joint Venture. 82. Magomedov has not heard from Lebedev since that January 2016 meeting. 83. Subsequently, it became clear to Plaintiffs that Lebedev had no intention of honoring the 2014 Agreement or 1997 Joint Venture and that he would not share whatever recovery he obtains (or has obtained) from Blavatnik and Vekselberg in his New York action. When that happened, Plaintiffs proceeded with diligence to commence this action. 84. Blavatnik and Vekselberg, for their part, have likewise refused to acknowledge Plaintiffs entitlement to any proceeds they received from the NNG shares. Blavatnik and Vekselberg knew at the time that Lebedev purportedly sold the NNG shares to them that the shares were subject to a joint venture agreement between Lebedev and Plaintiffs. They thus knew that Plaintiffs, no less than Lebedev, were entitled to their share of any proceeds derived from those of 26

16 holdings. Despite that knowledge, Blavatnik and Vekselberg have continued to deny Plaintiffs the proceeds that are rightfully theirs, without any justification. herein. COUNT I (Breach of Fiduciary Duty Against Lebedev) 85. Plaintiffs repeat the allegations set forth in paragraphs 1 through 84 as if fully set forth 86. Lebedev owed Plaintiffs a fiduciary duty by virtue of their 1997 Joint Venture. Plaintiffs had a relationship of trust and confidence with Lebedev as a result of their many interactions and their joint venture together. 87. In forming the 1997 Joint Venture, Plaintiffs and Lebedev agreed to act jointly with respect to their NNG shares and to expend effort, skill, knowledge, and resources in furtherance of their joint venture. Plaintiffs and Lebedev agreed to share equally in any profits or losses that resulted from their joint venture. 88. Lebedev owed Plaintiffs a fiduciary duty of undivided loyalty, good faith, and fair dealing in connection with their joint venture. 89. Lebedev fraudulently breached his fiduciary duties by (1) concealing from Plaintiffs his sale of his own shares of NNG to Blavatnik and Vekselberg; (2) upon information and belief, concealing from Plaintiffs his agreement to obtain for Blavatnik and Vekselberg control of Plaintiffs 5.37% stake in NNG; (3) upon information and belief, secretly working with Kim to obtain Plaintiffs shares of NNG; and (4) concealing from Plaintiffs his joint venture with Blavatnik and Vekselberg and the payments owed and paid to him pursuant to that agreement. 90. Absent Lebedev informing Plaintiffs of this conduct, Plaintiffs could not, with reasonable diligence, have discovered these breaches before February of 26

17 91. By virtue of these breaches, Plaintiffs have been damaged and are entitled to recover at a minimum their share of (a) the $611 million already received by Lebedev; and (b) any recovery in the Lebedev New York Action. herein. COUNT II (Fraud Against Lebedev) 92. Plaintiffs repeat the allegations set forth in paragraphs 1 through 91 as if fully set forth 93. In late 1997, Lebedev secretly negotiated with Blavatnik and Vekselberg over the sale of the joint venture partners NNG shares without disclosing those negotiations to Plaintiffs. In or around late 1997, Lebedev agreed to sell his own 5.13% stake in NNG to Blavatnik and Vekselberg and, upon information and belief, also promised to arrange for the sale of Plaintiffs 5.37% stake to Blavatnik and Vekselberg as well. Lebedev did not disclose any of those agreements or promises to Plaintiffs despite obligations to do so. 94. In 1999, Lebedev personally participated in discussions between Magomedov and Kim over the sale of Plaintiffs NNG shares to Kim. At no time did Lebedev disclose to Plaintiffs despite a duty to do so that he had previously promised those shares to Blavatnik and Vekselberg, that he had plans to arrange for the transfer of the shares to Blavatnik and Vekselberg following the sale to Kim, or that he stood to make a fortune once the sale to Kim was completed. 95. This was all material information and Lebedev had a fiduciary duty to disclose it due to his relationship with Plaintiffs; instead, Lebedev affirmatively concealed the information, intending to deceive Plaintiffs so that he could reap the benefits. 96. Between 2001 and 2003, Lebedev received $611 million from Blavatnik and Vekselberg as proceeds on account of the NNG shares. Lebedev did not disclose those proceeds of 26

18 to Plaintiffs either, even though the proceeds derived directly from the NNG shares that Plaintiffs had owned and even though he had a duty to do so. 97. All of those facts were highly material information that would be important to businessmen in Plaintiffs position. Lebedev nonetheless intentionally and fraudulently concealed those facts. 98. In addition, Lebedev had an obligation to disclose his secret dealings in the NNG shares under the special facts doctrine. Lebedev had superior knowledge of those essential facts, and the failure to disclose them to Plaintiffs was inherently unfair. Lebedev s secret dealings in the NNG shares was information peculiarly within Lebedev s knowledge. Plaintiffs could not have discovered Lebedev s secret dealings in the NNG shares through the exercise of ordinary intelligence, because Lebedev actively concealed those transactions and because Plaintiffs had no access to information about their NNG shares after they were transferred to Kim. 99. Plaintiffs relied to their detriment on Lebedev s conduct and omissions. Had Plaintiffs known about Lebedev s secret dealings and promises to Blavatnik and Vekselberg, they would not have agreed to transfer the shares to Kim on the terms on which they did. In addition, they would have pursued legal claims or other remedies against Lebedev to ensure they obtained the share of compensation they were due. Lebedev intended to induce Plaintiffs reliance through his deceptive course of conduct Plaintiffs reliance on Lebedev s actions and omissions was reasonable and justifiable given the parties history of prior business dealings, the relationship of confidence and trust, and Lebedev s experience and reputation in the Russian oil and gas industry of 26

19 101. Once his fraud was discovered in February 2014, Lebedev entered into a new agreement with Magomedov, apparently as it turns out in an effort to dissuade Plaintiffs from suing him Plaintiffs have suffered damages as a result of Lebedev s fraud. They were wrongfully deprived of their NNG shares under false pretenses. They were denied their rightful share of the $611 million that Lebedev received between 2001 and And Lebedev is now threatening to deny their share of the $2.07 billion in Rosneft proceeds as well. herein. COUNT III (Anticipatory Breach of 1997 Joint Venture Agreement Against Lebedev) 103. Plaintiffs repeat the allegations set forth in paragraphs 1 through 102 as if fully set forth 104. In 1997, Lebedev entered into a joint venture agreement with Plaintiffs. That agreement is a valid and enforceable contract that contains all essential terms and sets forth the rights and obligations of the parties Under the terms of that joint venture, Lebedev and Plaintiffs agreed to cooperate and act jointly with respect to all matters relating to their shares in NNG, including any sale of those shares to a third party. They further agreed to share in any proceeds, profits, revenues or payments received by either party with respect to any transaction involving their interests in NNG Plaintiffs fully performed all obligations under the 1997 Joint Venture agreement As a result of his collaboration with Blavatnik and Vekselberg, Lebedev became entitled to $2.07 billion in proceeds from Rosneft s acquisition of TNK-BP Lebedev has repudiated and anticipatorily beached his obligation to share those proceeds with Plaintiffs. Lebedev has made clear, through his actions and words, that he has no intent of sharing any of the proceeds from his litigation against Blavatnik and Vekselberg with of 26

20 Plaintiffs, regardless of the outcome of that litigation. Lebedev s communications and course of conduct constitute an unqualified statement and affirmative act making clear that he will not honor his obligations under his contract with Plaintiffs. They constitute a definite and final communication of his refusal to perform Plaintiffs will suffer substantial damages from Lebedev s anticipatory breach of the joint venture agreement, including but not limited to their share of the proceeds due from the Rosneft sale. herein. COUNT IV (Unjust Enrichment Against Lebedev) 110. Plaintiffs repeat the allegations set forth in paragraphs 1 through 109 as if fully set forth 111. Lebedev has been unjustly enriched at Plaintiffs expense, for which Plaintiffs have not been fairly or justly compensated Lebedev wrongfully obtained Plaintiffs 5.37% stake in NNG and used those shares for his own personal gain and stands to gain $2.07 billion from his lawsuit against Blavatnik and Vekselberg in connection with the Rosneft sale The plaintiffs and Lebedev were connected through their joint venture and 2014 Agreement It is against equity and good conscience to permit Lebedev to retain the proceeds he has obtained or will obtain as a result of his wrongful use of Plaintiffs 5.37% stake in NNG Plaintiffs are accordingly entitled to damages as well as a constructive trust over their rightful share of all proceeds due to them of 26

21 herein. COUNT V (Conversion Against Lebedev) 116. Plaintiffs repeat the allegations set forth in paragraphs 1 through 115 as if fully set forth 117. Plaintiffs 5.37% stake in NNG was specifically identifiable property. Plaintiffs had ownership in the NNG shares before its conversion Lebedev exercised control over Plaintiffs NNG shares without their knowledge or consent by virtue of the clandestine arrangement with Kim to acquire the shares in derogation of Plaintiffs rights Without Plaintiffs knowledge or consent, Lebedev used Plaintiffs NNG shares to enter into joint venture agreements with Blavatnik and Vekselberg; that joint venture then used Plaintiffs NNG shares to acquire a stake in TNK-BP, which was later sold to Rosneft for $13.8 billion Plaintiffs property was obtained through unlawful means and, in any event, is incapable of being returned due to the Rosneft sale. Accordingly, any demand for return of the property would be futile Plaintiffs have suffered damages from Lebedev s conversion, including a portion of the $2.07 billion due from the Rosneft sale. COUNT VI (Aiding and Abetting Breach of Fiduciary Duty Against Blavatnik and Vekselberg) herein Plaintiffs repeat the allegations set forth in paragraphs 1 through 121 as if fully set forth 123. Lebedev owed Plaintiffs a fiduciary duty pursuant to their joint venture and relationship of trust and confidence of 26

22 124. Blavatnik and Vekselberg had direct knowledge of Lebedev s fiduciary duties as a result of communications in 1997 between Magomedov and Vekselberg and his associates. At those meetings, Magomedov expressly informed Vekselberg and his associates about the existence of Plaintiffs joint venture with Lebedev concerning the NNG shares and the fact that neither Plaintiffs nor Lebedev could deal unilaterally in those shares without the other s consent Therefore, Vekselberg and, upon information and belief, his partner Blavatnik had actual knowledge of the fiduciary duty owed between Lebedev and Plaintiffs Lebedev fraudulently breached his fiduciary duties to Plaintiffs by, among other things: a. Secretly negotiating with Blavatnik and Vekselberg over the sale of the joint venture s NNG shares without disclosing those negotiations to Plaintiffs; b. Selling, in or around late 1997, his 5.13% stake in NNG to Blavatnik and Vekselberg, and upon information and belief, also promising to arrange for the sale of Plaintiffs 5.37% stake to Blavatnik and Vekselberg as well without disclosing this to Plaintiffs; c. Participating in the discussions between Magomedov and Kim over the sale of Plaintiffs NNG shares to Kim and not disclosing to Plaintiffs that he had previously promised those shares to Blavatnik and Vekselberg, that he had plans upon information and belief to arrange for the transfer of the shares to Blavatnik and Vekselberg following the sale to Kim, or that he stood to make a fortune from that secret transaction once the sale to Kim was completed; d. Failing to disclose the $611 million received between 2001 and 2003 from Blavatnik and Vekselberg on account of the NNG shares Lebedev affirmatively concealed all this information, intending to deceive Plaintiffs so that he could reap the benefits of 26

23 128. Blavatnik and Vekselberg participated in, substantially assisted, and proximately caused Lebedev s fraudulent breach of his fiduciary duties to Plaintiffs. Among other things, upon information and belief, Blavatnik and Vekselberg encouraged Lebedev to secretly arrange a sale of Plaintiffs 5.37% stake in NNG to them without Plaintiffs knowledge or consent. Blavatnik and Vekselberg also accepted the 10.5% NNG shares as part of their joint venture with Lebedev, while knowing that those shares were jointly controlled by Plaintiffs and Lebedev and that Plaintiffs were not told of the sale. Blavatnik and Vekselberg also paid $611 million to Lebedev between 2001 and 2003 in connection with those efforts despite knowing that half that amount rightfully belonged to Plaintiffs The acceptance of Plaintiffs NNG shares by Blavatnik and Vekselberg from Lebedev and the payments to Lebedev for those shares affirmatively assisted Lebedev in fraudulently breaching his fiduciary duties to Plaintiffs and demonstrates Blavatnik and Vekselberg s knowledge of the fraudulent breach Plaintiffs suffered damages as a result of Blavatnik and Vekselberg s aiding and abetting breaches of fiduciary duty and are entitled to recover at a minimum their share of (a) the $611 million already received by Lebedev; and (b) the $2.07 billion due from the Rosneft sale. herein. COUNT VII (Unjust Enrichment Against Blavatnik and Vekselberg) 131. Plaintiffs repeat the allegations set forth in paragraphs 1 through 130 as if fully set forth 132. Plaintiffs had a direct relationship with Blavatnik and Vekselberg as a result of the discussions in 1997 concerning their NNG shares Blavatnik and Vekselberg were unjustly enriched at Plaintiffs expense, including when they received $13.8 billion in proceeds from Rosneft using the 5.37% stake in NNG they of 26

24 had wrongfully obtained from Plaintiffs. Plaintiffs have not been fairly or justly compensated for that expense It is against equity and good conscience to permit Blavatnik and Vekselberg to retain the proceeds they have obtained as a result of their wrongful use of Plaintiffs 5.37% stake in NNG Plaintiffs are accordingly entitled to damages as well as a constructive trust over their rightful share of all proceeds due to them from the Rosneft sale. herein. COUNT VIII (Conversion Against Blavatnik and Vekselberg) 136. Plaintiffs repeat the allegations set forth in paragraphs 1 through 135 as if fully set forth 137. Plaintiffs 5.37% stake in NNG was specifically identifiable property Blavatnik and Vekselberg exercised control over Plaintiffs NNG shares without their knowledge or consent by virtue of their clandestine arrangement with Lebedev to acquire the shares Without Plaintiffs knowledge or consent, Blavatnik and Vekselberg used Plaintiffs NNG shares to acquire a stake in TNK-BP, which they later sold to Rosneft for $13.8 billion Plaintiffs property was obtained through unlawful means and, in any event, is incapable of being returned due to the Rosneft sale. Accordingly, any demand for return of the property would be futile Plaintiffs have suffered damages from Blavatnik and Vekselberg s conversion, including their portion of the $2.07 billion due from the Rosneft sale. herein. COUNT IX (Declaratory Judgment Against All Defendants) 142. Plaintiffs repeat the allegations set forth in paragraphs 1 through 141 as if fully set forth of 26

25 143. A justiciable controversy exists regarding Plaintiffs right to their share of the $611 million in proceeds paid between 2001 and 2003 as well as the $2.07 billion due from the Rosneft sale. That controversy is an actual and justiciable controversy involving a legally protectable interest that is directly in issue The rights and legal relations of Plaintiffs on the one hand, and Blavatnik, Vekselberg, and Lebedev, on the other hand, will be settled by a judgment declaring the parties respective rights and obligations regarding the $611 million in proceeds paid between as well as the $2.07 billion due from the Rosneft sale For the reasons above, Plaintiffs are entitled to a declaratory judgment against Lebedev declaring their right to one-half of the $611 million in proceeds that Lebedev received between 2001 and For the reasons above, Plaintiffs are further entitled to a declaratory judgment against Blavatnik, Vekselberg, and Lebedev declaring their right to one-half of the $2.07 billion in proceeds from the Rosneft sale. PRAYER FOR RELIEF Wherefore, Plaintiffs respectfully request that this Court enter judgment in their favor, granting relief as follows: 1. Award monetary damages to the Plaintiffs in an amount to be determined at trial, but no less than $1,305,500,000; 2. Disgorgement of any proceeds defendants have obtained or will obtain as a result of Plaintiffs NNG shares; 3. Enter a declaratory judgment, (i) for a declaration that the Plaintiffs are entitled to one-half of the $611 million in proceeds that Lebedev received in 2001 through 2003; and (ii) of 26

26 for a declaration that the Plaintiffs are entitled to one-half of the $2.07 billion in proceeds that Lebedev seeks from Blavatnik and Vekselberg; 4. Punitive damages; 5. Pre-judgment and post-judgment interest; 6. Award such other relief in favor of Plaintiffs as the Court deems just and proper. JURY DEMAND Plaintiffs demand a jury trial. Dated: June 22, 2017 /s/ Jonathan D. Cogan Jonathan D. Cogan Leanne A. Bortner KOBRE & KIM LLP 800 Third Avenue New York, New York T: Attorneys for the Plaintiffs Magomed Magomedov and Akhmed Bilalov of 26