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Russia lost an appeal in the case versus the former shareholders of Yukos, the Hague Court of Appeal said on Tuesday, overturning a lower court’s verdict and reinstating an order that the Russian Federation pay US$50 billion in damage compensation to the former shareholders of the Yukos oil company.
The ex-Yukos shareholders vs. Russia lawsuit has been dragging on in international courts for years.
Former Yukos owner and critic of the Kremlin, Mikhail Khodorkovsky, was arrested in 2003 and convicted of theft and tax evasion two years later. Yukos was broken up and sold off to state companies, including Rosneft. Khodorkovsky was released from jail in 2013 after Vladimir Putin pardoned him.
In the meantime, former Yukos shareholders sued for compensation for the assets they lost, which they claim were expropriated by the Russian government. In 2014, the Hague-based Permanent Court of Arbitration ruled that Russia must pay US$50 billion to the ex-Yukos shareholders.
Russia has refused to pay up, and two years later, in April 2016, The Hague District Court reversed the ruling of the Permanent Court of Arbitration on the grounds that it lacked jurisdiction to arbitrate in the case.
The ex-Yukos shareholders appealed The Hague District Court’s overturning of the ruling.
Today, The Hague Court of Appeal reversed the 2016 ruling and reinstated the 2014 verdict of the Permanent Court of Arbitration that Russia pay US$50 billion to the former shareholders of Yukos.
Russia can appeal today’s ruling at the Supreme Court in the Netherlands, The Hague Court of Appeal said.
Russia’s Justice Ministry issued a statement on Tuesday, saying that it would appeal today’s decision at the Supreme Court of the Netherlands. According to Russia’s justice ministry, The Hague Court of Appeal ignored the fact that the former Yukos shareholders were not good investors and obtained control over assets through various illegal means, including by bribing officials.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
This will be a very good lesson for the future shareholders in terms of whose shares to hold and in which countries..