Rusal, the Russian aluminium giant controlled by Oleg Deripaska, issued a stinging attack yesterday on a rival producer over a "sensational" fraud claim that had wasted millions of pounds on "fruitless" legal fees.

Rusal's comments come a day after Tajik Aluminium, or Talco, announced it had settled a $500 million (£315 million) lawsuit against a former business partner at the High Court in London over control of an aluminium smelter on the outskirts of Dunshabe.

Although Rusal was not a defendant in that case, it has been entangled in other legal action in the bitter dispute over the smelter, Tajikistan's only significant industrial asset. The proceedings in London alone has resulted in a legal bill approaching £90 million — equal to around 5 per cent of Tajikistan's GDP.

In 2005, Talco filed a lawsuit at the High Court in London accusing Azar Nazarov, a Tajik businessman, of defrauding the smelter between 1996 and 2004 through a corrupt relationship with its former manager.

Mr Nazarov, who denied the allegations, issued a counter-claim against Talco for $130 million. During the trial last month, his lawyer accused individuals linked to Emomali Rahmon, the Tajik President, of unlawfully ousting him in December 2004 and contriving the fraud allegations as a "smokescreen".

On Thursday, both parties confirmed that they had reached a confidential settlement and terminated proceedings with no admission of liability by either side.

But Talco had also launched seperate proceedings in the British Virgin Islands in which it accused Rusal, Mr Nazarov's former joint venture partner, of aiding him in the profit-skimming scam. Those proceedings were not affected by the settlement in London and are ongoing.

Rusal, which has challenged whether the British Virgin Islands has jurisdiction to hear the case, said today that Talco should “learn its lesson” and abandon the litigation altogether.

In a statement, Rusal said: “Talco has adopted a policy of seeking to avoid legitimate liabilities by making sensational but ultimately meritless accusations of fraud against those to whom it owes money.

“Instead of wasting yet more of Tajikistan’s limited resources on fruitless legal fees, Talco should simply pay what it owes to its creditors.

“If Talco does not and rather now pursues fraud allegations against Rusal, Rusal is confident that these claims will ultimately suffer the same fate as those previous claims . . . rejected, abandoned and wholly discredited.”

A spokesman for Talco rejected Rusal's allegations and said it was confident of succeeding in its claim in the British Virgin Islands.

"Rusal continues to play procedural games to avoid the scrutiny of an international court," the spokesman said. "But Rusal cannot avoid an examination of the merits of Talco's claims in a neutral forum forever."

Explore Law

• Corporate Law

• Public Law

• Columnists

• Law Panel

• Student Law

• Law Reports

Times Recommends

• City law firms prepare for painful year ahead
• Welcome to 2009: the year of the regulator
• Thacher Proffitt is latest US legal casualty