Dutch court reinstates $50bn Yukos award against Russia
A Dutch appeals court today reinstated a $50bn (£38bn) award to shareholders in the now defunct oil giant Yukos.
Yukos went bust in 2006 after its former chief executive Mikhail Khodorkovsky fell out with Russian President Vladimir Putin.
The Russian government began demanding billions in back taxes from Yukos and the company was ultimately expropriated by the state.
In April 2016, the Hague’s District Court had overturned a decision by the Permanent Court of Arbitration (PCA) ordering the Russian state to compensate shareholders in the company.
“The (lower) court ruled in favour of the Russian Federation, but the court of appeal in The Hague today ruled that the court’s verdict is incorrect. This means that the arbitral award is again in force.”
Russia’s Justice Ministry said today it would appeal the decision in the Dutch Supreme Court.
Most of Yukos’ assets were absorbed by the Kremlin’s flagship oil producer Rosneft, and its former owners have been trying to pursue compensation for years.
Legal proceedings have been brought by GML, formerly known as Group Menatep Ltd., which held roughly 70 per cent of the shares in Yukos.
The PCA ruled in July 2014 that four plaintiffs – not including Khodorkovsky – were entitled to compensation for the loss of their holdings, entitling them to seize Russian state assets.
But in April 2016, the District Court of The Hague said Russia had never ratified the treaty under which the PCA had claimed jurisdiction in the affair, although it had signed it.
“The arbitration court had jurisdiction under the Energy Treaty Charter (ECT), the appeals court said in a statement.
“When Russia signed the ECT, it had the duty to enforce it provisionally, unless it conflicted with Russian law. According to this court there was no such conflict.”