Rothschild loses “puppet master” libel case

Peter Griffiths – Reuters February 10, 2012

Financier Nathaniel Rothschild lost a libel case on Friday against a newspaper that depicted him as a “puppet master” who used his friendship with a European trade chief to impress a Russian oligarch and help close a business deal.

Rothschild sued the Daily Mail over a story that gave a rare insight into the world of super-rich businessmen who cross continents in private jets, dine in top restaurants and relax together in saunas.

One of Britain’s richest men, Rothschild is co-chairman of the London-listed coal mining company Bumi Plc and was once a close friend of Chancellor George Osborne.

The 40-year-old member of the European banking dynasty, who accused the newspaper of damaging his reputation, said he was disappointed by the ruling and would appeal.

The article said Rothschild flew the then European Union trade commissioner Peter Mandelson from the 2005 World Economic Forum in Davos, Switzerland, to Moscow to meet the aluminium billionaire Oleg Deripaska, among the richest men in Russia.

They went on to visit an aluminium plant in Siberia and relaxed together in a group whose members played soccer and ice hockey and sat in steam rooms before plunging into icy water.

The article said Rothschild had sought to impress Deripaska by unexpectedly bringing Mandelson to a dinner the Russian held with bosses from the U.S. aluminium company Alcoa Inc.

The newspaper said Rothschild had “pulled a very unexpected and also rather useful rabbit out of his hat” when Alcoa was worried about EU tariffs on Russian aluminium exports.

Rothschild’s lawyers told the court that the article implied he had risked Mandelson’s reputation “for the purpose of ingratiating himself” with Deripaska and helping to finalise a deal between the Russian’s metal firm RUSAL and Alcoa.

Before and after his term as European trade minister, Mandelson held senior positions in the British government under prime ministers Tony Blair and Gordon Brown, and was an influential figure in Britain’s Labour party.

‘INAPPROPRIATE CONDUCT’

Ruling in favour of the Daily Mail, High Court judge Michael Tugendhat said Rothschild was “seeking to please” Deripaska and Mandelson.

“So far as Lord Mandelson was concerned the benefit was the trip and the hospitality itself. So far as Mr Deripaska was concerned it was a relationship with the EU Trade Commissioner,” Tugendhat said in his ruling.

The judge rejected Rothschild’s argument that Mandelson flew with him as a friend rather than as a business contact and said Rothschild’s behaviour had in part been “inappropriate”.

“That conduct foreseeably brought Lord Mandelson’s public office and personal integrity into disrepute,” the judge said.

However, the judge said there was no evidence Mandelson talked about EU tariffs with Deripaska. The judge also accepted that parts of the Daily Mail article were wrong. For example, the deal had been struck before the dinner in Moscow.

The case offered a glimpse into Rothschild’s life and business dealings, including a visit to a banya, a traditional Russian sauna. The judge said the financier was “clearly not comfortable” when cross-examined about a trip to Siberia by Rothschild, Mandelson, Deripaska and others.

“We had the most delightful banya, where we were beaten by a 25-year-old Russian banya keeper. Then we got out and we jumped into ice cold water,” Rothschild told the court. “It was incredibly enjoyable.”

Rothschild plans to appeal.

“I am disappointed with today’s ruling, although I do not regret bringing the action. I intend to appeal this ruling to the Court of Appeal,” he said in a statement.

“I brought this action seeking an apology for the Daily Mail’s utterly false claim that I had arranged for Lord Mandelson to attend a dinner in Moscow to close a deal between Alcoa and Rusal and that this had caused the loss of 300 British jobs.

“The truth is, as the Daily Mail has now accepted, that I had nothing whatsoever to do with this deal and that it had in any event been completed before Lord Mandelson and I even arrived in Moscow.”

(Editing by Peter Graff)

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