Dubai judge freezes up to $704 million in assets in Russian oil dispute

Coral traders allegedly cost Soglayev more than $500 million in lost business

After a Dubai arbitration tribunal earlier this year ordered Soglayev to pay $42 million to one firm involved in the diesel trade, he responded with lawsuits in Dubai and Brazil, alleging that Coral cost him more than $500 million in lost business. The alleged Coral traders who sold the fuel had not been paid by Soglayev, and they accused him of overselling his capabilities and effectively stealing it. Soglayev alleges Coral approached his Brazilian clients and sold diesel at discounted prices and used the partnership as a ruse to obtain DIA33’s internal information. Soglayev also alleges he received what he perceived as death threats, including a call from Eyyub saying he had discussed the dispute with a Chechen warlord.

The lawsuit grew out of an arrangement Soglayev says he formed in early 2024 with Moscow-backed traders known as the Coral network. The relationship soured after a tanker carrying tens of millions of dollars worth of diesel failed to deliver its cargo in Brazil. The two sides are now litigating in courts in Brazil and the United Arab Emirates, according to filings reviewed by The Wall Street Journal. Soglayev said in an interview, “I realized I had been screwed,” and “I had been truly played.”

In June, a judge in Dubai barred Eyyub, Garayev and 13 other firms and people from disposing of assets valued at up to $704 million as the case moved forward. The Wall Street Journal reported that the order covered more than $700 million in proceeds from the sale of Russian energy by Soglayev’s opponents and described the freezing order as a legal victory for Soglayev despite his allegations of death threats. The outlet said the order showed the sums of money at stake in the market for Moscow’s sanctioned oil.

The judge later said his court did not have jurisdiction, raising the possibility that the lawsuit could be dismissed. Soglayev has appealed to keep the case in the Dubai International Financial Centre, said David McCoy of ADG Legal, his lawyer in the United Arab Emirates. The freezing order remains in place pending a decision on the appeal. A related lawsuit in Brazil is ongoing, and the United Arab Emirates court handling the main case has not publicized the proceedings.

Soglayev says in filings that he set up a firm called DIA33 in Dubai to sell Russian oil to foreign buyers and set his sights on Brazil, where Russian diesel was displacing more expensive American fuel. His stated goal was to make Russian fuel more acceptable to importers concerned that buying directly from Moscow could complicate their dealings with banks wary of violating sanctions. He booked storage space at Brazilian ports and planned to buy diesel from Russian exporters and sell it at a markup to fuel distributors.

Soglayev alleges he bought Russian diesel from a small Dubai firm called Serene Resources in late 2023. He says its chief executive, Andrey Romanovskiy, moved to a different company controlled by Eyyub and Garayev. Soglayev alleges Romanovskiy told him the Coral network operated through separate shell companies to avoid international attention. Soglayev says they also discussed the possibility that DIA33 could later merge with Coral to become its Brazilian trading arm. The Wall Street Journal wrote that the trading arrangements Soglayev entered into show “the convoluted mechanisms that have kept Russian oil flowing beyond the gaze of Western officials.”

Romanovskiy’s lawyer did not respond to questions. In an affidavit reviewed by The Wall Street Journal, Romanovskiy told a Dubai court that his firm was independent, denied that it was controlled by Coral and disputed other details of Soglayev’s case.

The relationship deteriorated after terminal operators at a Brazilian port rejected an aging tanker filled with Russian diesel that Soglayev was supposed to sell, according to filings by Soglayev and some of his opponents. The ship remained at sea for weeks and accumulated expenses before a different harbor admitted it, according to the filings.

The alleged Coral traders who sold the diesel had not been paid by Soglayev. They pursued him in a Dubai arbitration tribunal, accusing him of overselling his capabilities and effectively stealing the fuel. The tribunal earlier this year ordered Soglayev to pay one of the firms involved in the trade $42 million.

Soglayev responded with lawsuits in Dubai and Brazil. He alleges Coral ruined his business by approaching his clients and selling to them at discounted prices. He says the partnership was a ruse for Coral to access DIA33’s internal information and that he is owed more than $500 million in lost business.

Soglayev also alleges he received what he perceived as death threats. Among them was a call from Eyyub, who said he had discussed the dispute with a Chechen warlord, according to Soglayev.

Soglayev’s career moved from military intelligence into Russian energy. He commanded a military intelligence unit before leaving the army after the collapse of the Soviet Union. As private enterprise expanded in the 1990s, he joined a Dutch businessman in importing electronic goods. After a stint in the U.S. working on Wall Street, he returned to Russia and got to know the petrochemicals industry from his perch at Deutsche Bank, which led to a job as chief executive of chemicals producer Sanors.

Rosneft bought Sanors in 2015. Soglayev became Rosneft’s top chemicals executive and an adviser to Rosneft boss Igor Sechin, whom The Wall Street Journal describes as the patron of the Coral traders. Soglayev left Rosneft two years later and pursued other energy ventures. The Wall Street Journal has reported that after President Vladimir Putin invaded Ukraine and Russia’s oil-export operations were disrupted, Sechin tapped Eyyub and Garayev to replace the Swiss and U.K. traders that had handled Rosneft’s oil.

Russia remains one of the world’s leading energy exporters alongside the U.S. and Saudi Arabia, selling more than $150 billion worth of crude and fuel each year, The Wall Street Journal reported. To avoid Western sanctions, Russian oil exports have for the most part fallen under the control of a handful of middlemen from Azerbaijan and Russia, according to the outlet. The traders are known in the industry and by Western officials as the Coral network, named after a now-defunct trading firm where many of them once worked. Western officials describe the Coral traders as the most important middlemen enabling Moscow to sell its oil and fund its war in Ukraine.

The Wall Street Journal has reported that Coral, led by Eyyub and Garayev, struck a secret deal with state-backed Rosneft to export much of Russia’s oil in the early months of the Ukraine war. The outlet said the network has since consolidated control of the market, moving tens of billions of dollars in oil annually on a tanker fleet that forms most of Russia’s shadow fleet.

The Coral network sells crude that once headed to Europe, India and China. Russian diesel, meanwhile, flowed to Brazil, where the fuel powers haulage trucks and has displaced more expensive American fuel. Soglayev sought to participate in that market.

The U.K. and European Union have sanctioned Eyyub, Garayev and several of their associates, along with dozens of trading and shipping firms the Coral traders used to deflect attention from their activities. Eyyub said last year that he considered the sanctions baseless and had done nothing unlawful. A lawyer for Garayev said the Azeri businessman had not been involved in petroleum operations since 2022 and was not aware of any legal proceedings involving Soglayev. Eyyub could not be reached for comment.