A Russian billionaire has lost the €40 million deposit he put down on a French villa after withdrawing from the deal.

In 2008, the nickel tycoon Mikhaïl Prokhorov agreed to purchase of the magnificent Villa Leopolda in Villefrance-sur-Mer for a world record price of around €500 million.

Prokhorov later decided to back out of the deal, for reasons that remain unexplained, but last month a court in Nice stated that a valid contract had been entered into, and that he would forfeit his deposit, as well as around €1 million in damages and costs.

French law does allow a seven day cooling-off period for purchasers, but this is only available to individual purchasers, not if the property was purchased through a company, as occurred in this case.

At the time, lawyers were also arguing that SAFER, the French national land agency had been offered the property at a lower price (they have an automatic right of prior acquisition), something that was denied by them. It is also inconceivable that they would have had any interest in the purchase of this property.

Prokhorov’s lawyer has advised his client to appeal, but no formal proceedings have been announced.

The 2,700 square metre Leopolda mansion is spread over 20 acres of some of the most desirable coastline on the Mediterranean coast between Nice and Monaco, overlooking Cap Ferrat.

The owner of the property is owned by Lily Safra, the widow of banker Edmond Safra who was murdered in 1999 after his nurse set fire to his Monaco apartment.

The property was originally constructed at the turn of the last Century by King Leopold II of Belgium, after whom it is named.

Lily Safra has already announced that the whole of the deposit will be donated to a range of medical charities in France, the US, and the UK.