London Judge Dismisses Firtash Lawsuit Against Kyiv Post

A London judge on Feb. 24 dismissed a libel lawsuit filed by Ukrainian billionaire Dmytro Firtash against the Kyiv Post, saying that the link to English jurisdiction was “tenuous in the extreme.” Observers of the two-hour hearing in the High Court in London said the judge also called the Firtash lawsuit “almost an abuse of process.”

The oral ruling by High Court Master John Leslie, to be followed by a written order, may end proceedings in the case involving a July 2 Kyiv Post front-page news story that reported accusations of corruption and conflict of interest in the highly lucrative yet frequently non-transparent Ukrainian gas trade.

The ruling is being hailed as a victory for free speech internationally and a blow to so-called “libel tourism,” in which wealthy foreigners abuse the United Kingdom’s lax free-speech protections and high litigation costs to file lawsuits involving issues that have no substantial connection to England.

The decision is also expected to give greater impetus to the popular movement to change English libel laws.

Article 19 members during a show of support for the Kyiv Post outside The Royal Court of Justice in London on Feb. 24. Inside, a judge dismissed the libel lawsuit by Ukrainian billionaire Dmytro Firtash against the Kyiv Post.
(George Torode)

According to Ross Hall of Financial Dynamics, a London-based communications firm retained by the Kyiv Post, Leslie – the presiding judge – was categorical in ruling that Firtash’s case had no business being heard in UK courts.

“I have come to the conclusion that the connections to the United Kingdom mentioned in this claim are tenuous in the extreme,” Hall quoted the judge as saying.

“Mr. Firtash had no residence here, nor any active business pursuits. I have been given no evidence of visits to this country, the length of his stay if he does come here or where he stays. There is absolutely nothing to connect him with this country.”

Noting that the article in question was downloaded only 21 times in the United Kingdom, Leslie said the publication in England was “limited” and “certainly not extensive,” according to Hall. “This is not a case that this court will entertain and it seems to be almost an abuse of process,” the judge is quoted as saying.

Moreover, Leslie, according to Hall, said: “All evidence and witnesses would have to have come from abroad and there is no way that this action should be allowed to happen. It follows, in my judgment, that we should decline jurisdiction in this case as there is no substantial risk of tort connected here. This is not a case that this court will entertain and it seems to be almost an abuse of process.”

Mark Stephens, the lawyer who represents the Kyiv Post, in London on Feb. 24. (AFP)

After the ruling, lawyers for Firtash asked for the right to appeal, to which Hall said the judge responded: “You do have the right to ask and I am rejecting that request now because there are no sufficient grounds on which to do so and no prospect of success.”

Neither Firtash nor his London lawyer, Simon Smith, could be reached for comment. Robert Shetler-Jones, the chief executive officer of Firtash’s Group DF business holding, said late on Feb. 24 that his boss will study the ruling and weigh his options.

Besides losing the case, Leslie ordered Firtash to pay the legal costs incurred by Public Media (part of the ISTIL Group that publishes the Kyiv Post) and the three other defendants, including Kyiv Post owner Mohammad Zahoor, Kyiv Post chief editor Brian Bonner and ex-Kyiv Post staff writer John Marone, who authored the article in dispute. Those costs to date have been estimated at $63,000.

Ukrainian billionaire Dmytro Firtash on Dec. 15 in Kyiv. (UNIAN)

According to Firtash’s now-dismissed claim, he filed the lawsuit because the story allegedly damaged his reputation in the UK, where he has given money to a Ukrainian studies program at Cambridge University. Firtash is a co-owner of RosUkrEnergo, a highly controversial and major gas intermediary between Russia and Ukraine.

Mark Stephens, the London media lawyer who represented the Kyiv Post, called the ruling “a day in the sunshine” for free speech worldwide.

Stephens noted that England has been under sharp international criticism for the lax free-speech protections of its libel laws, as well as the willingness of judges in the past to accept libel cases involving plaintiffs and defendants with no strong connection to England.

The United States even went so far as to insulate its citizens from adverse English libel-law judgments by preventing their enforcement in America.

The situation has led to a strong movement within England to broaden free-speech protections in libel law, as well as put an end to the so-called “libel tourism” that has allowed rich, foreign claimants to file harassing lawsuits in London against news media organizations and others who don’t have substantial business in England.

British Deputy Prime Minister Nick Clegg has called the libel law an “international embarrassment” that must be changed.

“This is highly important for global free speech. This is one of the worst cases of libel tourism I’ve encountered in recent years,” Stephens, the Kyiv Post lawyer, said of the lawsuit.

“England has been criticized for its libel laws and propensity to encourage ‘libel tourism’ and is now beginning to address these problems. This case brings in sharp focus the urgent need for this reform legislation to pass.”

Leslie’s ruling may discourage similar claims, Stephens said, noting that the Kyiv Post is fortunate enough to have an owner in Zahoor with the financial resources and willingness to defend independent journalism. So in that sense, Stephens said, the libel threat remains to free speech globally.

“If this had been a small local paper in Ukraine, a blogger or a freelancer or a non-governmental organization exposing wrongdoing, it is unlikely they would have been able to obtain this result,” Stephens said. “This case demonstrates the need to be able to stand up to the bully boys who come to London to abuse our courts.”

Natalia Ligachova

Media groups and others in Ukraine said the ruling is an encouraging development for free speech in Ukraine.

“I can’t remember a case where a Ukrainian media successfully defended itself when up against an oligarch,” said Natalia Ligachova, head of the Kyiv-based media watchdog Telekritika.

Ambassador Jose Manuel Pinto Teixeira, head of the European Union delegation to Ukraine, said: “Any decision of independent courts which strengthens the role of independent media should be welcomed. Media freedom and plurality are key prerequisites for a vibrant democratic society. The Kyiv Post has gained the reputation of being committed to promote such values in Ukraine.”

Konstantyn Kvurt, the board chairman of Internews Ukraine, a non-profit organization funded by the United States to support free media, said the decision is a sign of solidarity with Ukrainian journalists, who are trying to be balanced without self-censorship.

“The ruling also shows that an independent court is able to take decisions which do not depend on the money of Ukrainian oligarchs,” Kvurt said. “It is one of the cases when reputation isn`t as easy to buy as a bottle of scotch.”
Kvurt said preventing journalists from reporting facts was one of the reasons the case was filed in the first place.

“Ukrainian oligarchs don`t need publicity; they prefer to stay in the shadows … and keep doing shadowy business,” Kvurt said. “It means that oligarchs will think twice next time before filing libel lawsuits against Ukrainian media in London.”

Viktoria Siumar, who directs the Kyiv-based International Media Institute, a media watchdog, praised the decision of the British court to throw out charges by Dmytro Firtash against the Kyiv Post.

Jose Manuel Pinto Teixeira

“I think the reason Firtash sued your newspaper in the first place is because he saw an easy, quick way to use the loopy British libel law to clean his reputation,” Siumar said.

“Billionaire Rinat Akhmetov’s successful 2008 lawsuit against the website Obozrevatel, which didn’t even defend itself, set a bad example.” Akhmetov won a default judgment in that case; Akhmetov has said he was merely trying to defend his reputation, not silence free speech.

Siumar said the dismissal could encourage Ukrainian media to defend their interests more vigorously.

“I think the decision will help Ukrainian media because [they will now study the Firtash vs. Kyiv Post] case to learn how to successfully defend themselves if accused of libel,” she said.

Veteran investigative reporter Oleh Yeltsov welcomed the news. “Congratulations,” Yeltsov said. “I hope the ruling will send a clear signal to the presidential administration and their friends in the gas trade business that it’s no longer possible to keep shady gas deals under wraps.”

Yeltsov, whose Ukraina Kriminalnaya website was almost closed down in 2004 after RosUkrEnergo’s predecessor, the Budapest-based Eural Trans Gas, won a Kyiv court decision against him awarding Hr 100,000 worth of damages to the plaintiff. The verdict was upheld by Kyiv’s court of appeals before the Supreme Court eventually threw out the fine, Yeltsov said.

Like the Kyiv Post, Yeltsov was targeted by Firtash, albeit indirectly. RosUkrEnergo co-owner Firtash has admitted in past interviews that he owned Eural Trans Gas.

“The lawsuit made my life a living hell for months,” Yeltsov said. He added that wealthy Ukrainian tycoons still regard media as public relations firms that should serve their interests, not fairly cover them in reporting.

Yeltsov’s enthusiasm is shared by Tetyana Chornovil, an investigative Ukrainian journalist who in 2007 was sued by Ukraine’s richest man, Rinat Akhmetov, for the series of articles investigating his youth. The reports were published by Obozrevatel, a web-based Ukrainian publication.

Chornovil stands by her reporting and fears that her loss and $100,000 of damages awarded to Akhmetov scared many journalists away from investigative reporting. Chornovil says that it often would become an excuse for many editors and publishers to discourage journalists from doing any investigative reportin on such-high profile individuals as Akhmetov.

“There are really a lot of things to investigate by talking to people at his home town of Oktyabrskoe [in Donetsk Oblast],” she said.

Chornovil recalls that back in 2007, Obozrevatel’s management made a decision to ignore the lawsuit altogether, not even making an attempt to challenge it. Chornovil regrets the decision and feels she and Obozrevatel had good chances of winning in court.

It was all the more unpleasant, Chornovil said, that a year later, Obozrevatel’s owner (businessman-politician Mykhaylo Brodsky) apologized to Akhmetov and removed articles from Obozrevatel website willingly. It was also unexpected to her that Akhmetov, the richest Ukrainian, last year called her to “make peace.”

According to Chornovil, when she warned him that she is not going to apologize for anything, Akhmetov said he didn’t want an apology. “He repeated that he just wanted to make peace,” she recalled.

Telekritika’s Ligachova said that leading television channels are “controlled by wealthy oligarch businessmen, and report in ways often favorable to them, while many honest Ukrainian journalists and media do not have the financial resources to defend themselves in court – be it in Ukraine or abroad in more expensive jurisdictions such as the UK.”

“This is one of the biggest problems for many journalists. But there are many nongovernmental organizations in Ukraine which can help them, and cover the costs. It would be great if the West stopped hearing cases launched by our oligarchs against our journalists, who can’t afford to defend themselves there in many cases,” Ligachova said.

Ligachova added: “From one side this London decision is right. Our oligarchs should not try to drag our journalists to far away London courts. But on the other side, it is also needed for our courts to become more independent. Everyone is always also challenging their fairness.”

Bonner, the Kyiv Post chief editor, said he hopes that Firtash will abandon litigation altogether and accept the newspaper’s longstanding offer to give him ample space in the newspaper to give his side of the story.

Bonner noted that Marone, the story’s author, attempted to reach Firtash and his spokespeople before going to press with the article that detailed allegations made by ex-Prime Minister Yulia Tymoshenko during a July 1 press conference. However, neither Firtash nor his representatives responded to Kyiv Post inquiries and have subsequently not identified any factual inaccuracies in the story.

The Kyiv Post, in response to the lawsuit and in protest of England’s “draconian libel laws,” blocked access to the newspaper’s website from UK Internet addresses.

That block is not likely to be removed until Firtash exhausts all appeals or the English libel law is changed to prohibit foreigners from filing such claims.

Mike Harris of the Index on Censorship, a London group at the forefront of libel reform, said: “A Ukrainian billionaire tried to drag a Ukrainian newspaper all the way to London to fight a libel case here. Leslie has rightly thrown this case out. We can’t have our courts used to chill free speech in foreign countries. But it’s up to the government to bring our libel laws into the 21st century with reform in this parliament.”

English PEN director Jonathan Heawood said: “This is obviously good news for free speech, but the libel chill still remains. The phenomenon of libel tourism is a form of legal harassment, which discourages responsible investigative journalists from speaking the truth to power. This is not a problem we can fix by tinkering with legal procedures: Parliament needs to overhaul our entire system.”

Sile Lane from Sense About Science said: “Journalists from countries where press freedoms were hard won are shocked that English libel laws are so restrictive and can be used against them for what they write in other parts of the world. Until we have clear, strong defenses against libel actions people around the world can’t have confidence in their right to free speech.”

Peter Noorlander of the Media Legal Defense Initiative in London said the ruling may discourage claims from plaintiffs unless they have “strong ties to England and Wales.” He also thinks the case may spur changes in libel law.

Although Firtash could pursue litigation, Stephens thinks Firtash would be better advised to drop the lawsuit and accept the Kyiv Post’s offer to publish his side of the story. To do otherwise, Stephens said, would risk turning the case into a “cause celebre” for libel reform. If the story in question represented “a sore” to Firtash, then pursuing more lawsuits would risk turning that sore into “an open and weeping wound,” Stephens said.

An associate of Stephens, Helen Mabelis, told the Kyiv Post that the judge criticized Firtash’s side for “erroneously and misleadingly” using the London address of his business associate, Shetler-Jones, on the claim he filed in the London court. “If High Court enforcement officers turned up at the offices in Knightsbridges, they would be sent away with a flea in their ear. That is one of the principle purposes of putting the address on the claim form.”Mabelis said the judge, in the end, concluded that all the factors led to the judgment that Fiirtash did not have a reputation to be vindicated in English courts.

Read the story in Ukrainian here.