Russia wins final round of $ 50 billion Yukos case

0

The Dutch Supreme Court on Friday overturned an order of Russia to pay $ 50 billion to former shareholders of the dismantled oil giant Yukos, but referred the long legal saga to a lower court for more hearings.

The ex-shareholders were compensated in 2014 by a Hague-based arbitral tribunal for the dissolution of Yukos after its former owner, Kremlin critic and ex-tycoon Mikhail Khodorkovsky, was arrested in the early 2000s.

Russia has fought the case through the Dutch legal system for the past seven years, and the Dutch Court of Appeal last year upheld the initial payment.

“Today, the Supreme Court overturned the final judgment of the court of appeal” supporting the payment, the highest court said in a statement.

The Supreme Court said it had confirmed Russia’s appeal that the appeals court wrongly rejected Moscow’s arguments that shareholders committed arbitration fraud.

“The case has been sent back to the Amsterdam Court of Appeal for a new judgment on this ground,” he said.

But the court rejected Russia’s other arguments that it was not bound by an international energy treaty on which the original 2014 payment decision of the Permanent Court of Arbitration was based.

There was no immediate reaction from Moscow or the shareholders.

Fall of the oligarchs

Yukos was Russia’s largest oil company, one of many companies formed when the Soviet Union collapsed in the 1990s, when businessmen like Khodorkovsky took over former Soviet assets at slashed prices.

Khodorkovsky’s arrest came after Russian President Vladimir Putin warned the growing class of so-called oligarchs against meddling in politics in the early 2000s.

After the fall of Khodorkovsky, Yukos collapsed in the face of huge government tax demands and was sold at an opaque auction to state-owned companies run by Rosneft between 2004 and 2006.

The state-owned Rosneft was small at the time, but has since grown into one of the largest listed oil companies in the world in terms of production volume.

The former majority shareholders of Yukos led by the financial holding company GML then demanded compensation from Russia because what they are saying are their losses caused by the business break-up.

Khodorkovsky, who spent a decade in prison and now lives in exile in London, is not a party.

The Hague-based Permanent Court of Arbitration awarded shareholders $ 50 billion in 2014, the highest sum ever seen by the tribunal, after nine years of hearings.

It based its decision on a 1994 multilateral agreement, the Energy Charter Treaty, which states that a dispute between a member state and a foreign investor could be resolved by arbitration.

But in a shock turnaround, a local Dutch court overturned the ruling in 2016, saying the PCA was “not competent” to rule on the case because Russia had signed the treaty but had not ratified it.

The Dutch appeals court in turn restored the original sentence in 2020, leading to the Russian appeal to the Supreme Court.

Vodka brands

Even if shareholders did win, they would face a years-long battle to enforce the $ 50 billion allotment and seize Russian assets in several countries, including the United States, Britain and the United States. -Low.

That effort has already started, with a Dutch court granting shareholders local rights to two iconic vodka brands, Stolichnaya and Moskovskaya.

The Yukos decision comes amid tensions between the Netherlands and Moscow, often disputed in Dutch courts.

Russia last month criticized a Dutch court ruling that a priceless collection of Crimean gold on loan to an Amsterdam museum must be returned to Ukraine.

The Netherlands are also currently trying three Russians and one Ukrainian in absentia for the 2014 slaughter of flight MH17 over Ukraine, in which 298 people died, including 196 Dutch.

Share.

About Author

Leave A Reply