Kim Dotcom sues New Zealand government for damages

Kim Dotcom, pictured here with Elizabeth Dotcom on his wedding day, is suing the New Zealand government for damages over the raid of his mansion in 2012

Kim Dotcom, the founder of file-sharing site Megaupload, is suing the New Zealand government for billions of dollars in damages over his arrest in 2012.

The internet entrepreneur is fighting extradition to the US to stand trial for copyright infringement and fraud.

Mr Dotcom says an invalid arrest warrant negated all charges against him.

He is seeking damages for destruction to his business and loss of reputation.

Accountants calculate that the Megaupload group of companies would be worth $10bn (£7.2bn) today, had it not been shut down during the raid.

As he was a 68% shareholder in the business, Mr Dotcom has asked for damages going up to $6.8bn. He is also considering taking similar action against the Hong Kong government.

As stated in documents filed with the High Court, Mr Dotcom is also seeking damages for:

• all lost business opportunities since 2012

• his legal costs

• loss of investments he made to the mansion he was renting

• his lost opportunity to purchase the mansion

• loss of reputation

"I cannot be expected to accept all the losses to myself and my family as a result of the action of the New Zealand government," he told the BBC.

"This should never have happened and they should have known better. And because they made a malicious mistake, there is now a damages case to be answered."

New Zealand Prime Minister Jacinda Ardern told Radio New Zealand: "This has obviously been an ongoing matter, so no it doesn't surprise me."

Key argument

Mr Dotcom's key argument over his extradition is the warrants used for the raid on his mansion and arrest in January 2012 were based on Section 131 of the 1994 Copyright Act of New Zealand.

"Under the NZ copyright act, online copyright infringement is not a crime," said Mr Dotcom.

"92B of Section 131 - an amendment created by parliament in 2012 - prohibits any criminal sanction against an internet service provider in New Zealand.

"In order for the US to be successful with an extradition, the allegation of the crimes that they are charging someone with also have to be a crime in the country from which they request the extradition."

A $500,000 video-editing platform that was damaged after being seized by the Hong Kong government

On 16 January, Mr Dotcom announced that he had received two containers worth of his assets that had been released by the Hong Kong government.

"It's about $2m worth of designer furniture and high-tech stuff," he said.

"But most frustrating is the loss of our family archive of 800 hours of video, the birth of my children, birthdays, holidays - it's really sad."

Fighting extradition

Mr Dotcom is still fighting extradition, and the next hearing for the case will be in the Appeals Court on 20 February.

In December, Mr Dotcom requested a judicial review into his case. The US applied to have the arguments he made for his case to be reviewed struck out.

High Court judge Timothy Brewer rejected seven of the eight arguments because he said the High Court was not the place to bring up a judicial review, however he felt that Mr Dotcom did have a case.

"Given the context of the application, and acknowledging Mr Dotcom's submissions outlined above, I accept there is a reasonably arguable case that the district court judge did not have reasonable grounds to believe that the offence for which Mr Dotcom is sought is an extradition offence," he wrote in the judgement.

Mr Dotcom intends to raise the judicial review at the Appeals Court hearing in February.

Marriage and ICO

From left: Kobi, Carmel (Elizabeth's mother), Elizabeth, Kim Dotcom, Kimmo, twins Keera and Kylee, Rudi (Kim Dotcom's mother’s partner), Kaylo, Annelie (Kim Dotcom's mother) and dog Toby

On Saturday 20 January - the sixth anniversary of the raid - Mr Dotcom married Elizabeth Donnelly in a private wedding ceremony in Auckland.

"Liz and I got married on the sixth anniversary of the raid so that this special day will always be a happy anniversary in the future," he said.

His new micro-payments business, Bitcache, is also preparing to launch an initial coin offering (ICO) in the next three months, underwritten by crowdfunding investment platform Bank To The Future.

Due to the ongoing legal case against him, the ICO will not be open to residents of the US.

Mr Dotcom says that he is separate from Bitcache to ensure that it cannot be shut down in the event that he is extradited and tried in the US.

Nevertheless, he says the damages case is essential to removing the loss of reputation that has made it difficult for him to do business in many countries.

"That's why it's all so important that I clear my name and all the charges are dropped and this damages claim goes ahead," he said.

"I don't want to be seen as what the US government charges me as."

The charges against Kim Dotcom

CCTV footage of the raid on Kim Dotcom's mansion on 20 January 2012

The US Department of Justice has said Mr Dotcom and his associates enabled copyright infringement by letting users store pirated files in free cloud lockers.

Users posted links to the pirated content for others to download free, but Megaupload would not close down lockers containing infringing content.

Mr Dotcom has long argued that he did not aid piracy because he had a takedown system that enabled copyright holders to delete links to pirated files, and without the link, a user could not reach the file.

US authorities say Mr Dotcom and others cost film studios and record companies more than $500m (£322m) in lost earnings, while making at least $175m for themselves.