Steel magnate is being sued for allegedly reneging on agreement with former friend over Nigerian oil deal. Lakshmi Mittal, Britain's richest man, is expected to be cross-examined over his business practices and relationships with politicians in a court case that could offer a rare glimpse into his empire.
The steel magnate, worth an estimated £12.7bn, is being sued at the high court for allegedly reneging on an agreement to pay fees to a former friend for helping to secure an oil deal. The case, which begins on Tuesday, is the culmination of a seven-year battle with the rice importer Moni Varma.
Both men will be asked to discuss their relationships with Olusegun Obasanjo, the former Nigerian president who granted Mittal access to two unexplored oil fields in the Niger Delta. Mittal, 63, has previously dismissed the claim, saying the case would be defended vigorously. Since moving to Britain with his family in 1995, the "steel maharajah" has become well known for his expensive tastes and his involvement in public life. He has donated more than £5m to the Labour party and has imported marble from the quarry used for the Taj Mahal to decorate his £60m home.
The ArcelorMittal Orbit – 1,500 tonnes of steel twisted into a sculpture by the artist Anish Kapoor – dominates the Olympic park in Stratford, east London. In documents put before the court, Varma claims to have facilitated a deal in 2006 for Mittal to access two unexplored oil fields in the Niger Delta, and to have arranged a meeting with Obasanjo.
Varma, 64, from Northwood, Middlesex, whose company Veetee Rice is one of Britain's biggest rice traders, declined to comment on the case on Friday, saying: "Let the courts decide if my claim is legitimate or not. My intention is not to malign anybody." The writ details how Varma and Mittal have known each other socially since 1997 and regularly discussed business opportunities at social events in London.
Varma, who was born in India but educated in Malawi, has longstanding connections with Nigeria and had known Obasanjo since 2001, the documents claim. In July 2005, Mittal Investments Sarl, a company owned by Mittal, launched a joint adventure with OVL, a subsidiary of ONGC India, India's leading oil and gas exploration company.
A month later Mittal and Varma met for dinner at an Indian restaurant in Knightsbridge and discussed possible deals in Nigeria, the writ claims. In September 2005, Varma claims, the pair had a conversation that is at the heart of the case: how much Varma would be paid if the deal came through. Varma claims Mittal said he could expect 5%-15% of the defendant's investment.
According to the writ, Mittal responded: "I will cover you" or "you will be covered … The reward could be even bigger than 15%, depending on the size of the deal." Varma claims that over the following six months he was cut out of the deal. Mittal's joint venture with the Indian government was successful in its bids for two licences for 10 years in downstream projects in Nigeria. The anticipated combined yield of the "blocks", or areas of oil, was 650,000 barrels a day and the value of the downstream projects is $6bn (£4bn).
Mittal's lawyers are expected to argue that Varma was a social acquaintance of their client, and that Varma offered to arrange a meeting with Obasanjo, but dispute Varma's recollection of the conversation in September 2005. The lawyers have also dismissed as fanciful Varma's claims of introducing Mittal to Nigeria. The commercial court has put aside 21 days to hear the case.
A spokesman for Mittal said: "Mr Varma's claim is an opportunistic and speculative piece of litigation brought on a conditional fee agreement, which Mr Mittal denies in its entirety and intends to vigorously defend."