Addleshaw Goddard is set to miss out on a significant payout after the High Court ruled against the firm's client, Russian oligarch Boris Berezovsky, in his high-profile $6bn (£3.8bn) dispute with Chelsea FC owner Roman Abramovich.

The judgment, which was handed down this morning (31 August) by Mrs Justice Gloster in the High Court, will be seen as a major setback for Addleshaws, which had been working with Berezovsky on a conditional fee basis.

The firm was understood to be in line for a multimillion-pound success fee had the case gone in favour of Berezovsky.

Addleshaws litigation partners Mark Hastings and John Kelleher led the firm's team, working alongside One Essex Court's Laurence Rabinowitz QC. Berezovsky had claimed he was coerced by Abramovich to sell his stake in Russian oil company Sibneft at a significant undervalue, and that Abramovich sold his shares in Russian aluminium company Rusal without his consent

Berezovsky was described by Justice Gloster as "an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept,", adding: "[Berezovsky] repeatedly sought to distance himself from statements in pleadings and in witness statements which he had signed or approved, blaming the 'interpretation' of his lawyers, as if this somehow diminished his personal responsibility for accounts of the facts."

Jonathan Sumption QC – formerly of Brick Court Chambers and now a Supreme Court justice – acted for Abramovich on the case alongside Skadden Arps Slate Meagher & Flom litigation partner Karyl Nairn, international arbitration partner Paul Mitchard QC and of counsel Rory McAlpine. Skadden's Bruce Buck, the partner-in-charge of the US firm's European offices, is Chelsea FC chairman.

Former Herbert Smith senior partner Lord David Gold was also brought in to assist Abramovich's team on the case late last year.

The trial was the first to be heard in the new Rolls Building, running from October 2011 until January this year.

Skadden is a longstanding adviser to Abramovich, having previously successfully defended the Russian billionaire against a claim worth more than £2bn brought by OJSC Oil Company Yugraneft in 2008 – which alleged fraud against the Chelsea FC owner and his adviser Millhouse Capital in relation to a stake in an oilfield in Siberia. The claim was thrown out.

Berezovsky is also currently embroiled in a dispute over now-deceased Georgian billionaire Badri Patarkatsishvili's estate.

Former Hogan Lovells partner Graham Huntley, who left the firm in March to launch boutique Signature Litigation, is acting for the estate of Patarkatsishvili with Fountain Court's Michael Brindle QC, while Addleshaws' Hastings and Kelleher are advising Berezovsky alongside Brick Court's Mark Hapgood QC.

The Patarkatsishvili estate is named as a defendant alongside Russian metal magnate Vasily Anisimov and investment company Salford. Freshfields Bruckhaus Deringer litigation partners Ian Terry and Matthew Bruce are acting for Anisimov with 3 Verulam Buildings' Ali Malek QC and Sonia Tolaney QC as counsel.

Click here for the summary judgment.

Market reaction

"I'm not terribly surprised by the result. I don't think the evidence went well for Berezovsky, and obviously it was a difficult case to run. In terms of the CFA agreement in place, one of the problems with CFAs on complex commercial cases like this is that the risk/reward ratio is not nearly good enough. This is why the introduction of contingency fees will have more impact on commercial cases than conditional fees have."
Ted Greeno, dispute resolution partner, Herbert Smith

"These sorts of cases, which rely almost solely on oral agreements, are always high risk in one sense because they depend on the judge making an assessment of who is the more credible witness and here it is absolutely clear whose evidence the judge preferred.
 
"That will have been something the client and indeed the law firms had to take into account in deciding how far to go because at the end of a trial there is invariably a winner and a loser and the bigger the case the higher the stake in terms of what is at risk in costs terms. If there are conditional fee agreements involved then the stakes are of course even higher for the law firm involved."
Patrick Sherrington, litigation, arbitration and employment head, Hogan Lovells

"The thoroughness of the way in which the trial was run by the parties and the judge is a fine advertisement for the Commercial Court. No firm or counsel can control what happens in the witness box. It would be a shame if this defeat deterred the use of CFAs where access to justice would otherwise be denied."
Simon Davis, head of commercial litigation, Clifford Chance

"This judgment leaves Berezovsky with limited prospects of continuing his legal battle with Abramovich. The judge's finding on the reliability of his evidence may also damage his prospects in the other litigation he is involved in before the court in London, which is due to start in October. The costs of this case may well increase further the focus on costs management in future major cases."
Richard Little, commercial dispute management partner, Eversheds

"For other parties locked in disputes about informal business arrangements of this nature, the case highlights the critical importance of witness credibility – and indeed of bringing claims promptly so as to bring memories which are as fresh as possible to court. Berezovsky's reaction to the judgment suggests an appeal may well be considered, although the grounds for that are at present unclear. I suspect this isn't the last we've heard of this case, or indeed of the influx of Russian and Eastern European oligarchs litigating in London's High Court."
Philippa Charles, litigation partner, Mayer Brown

• Related: Abramovich battle is fitting launch as Rolls Building bolsters City's dispute credentials