The Amsterdam Court of Appeal rejected on Tuesday Russia's final argument in an appeals case against an arbitration award in which Moscow has to pay $50 billion to the former shareholders of Yukos for deliberately bankrupting Russia's biggest oil firm in the early 2000s and prosecuting its CEO Mikhail Khodorkovsky.
The former shareholders of Yukos and the Russian state have been dragging the case through various courts in the Netherlands for over a decade.
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. Khodorkovsky is now in exile and lives in London.
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.
In May 2017, the Amsterdam Court of Appeal ruled that Russia unlawfully bankrupted Yukos. The court said that the Russian authorities "not only violated the Russian [tax] rules, but also that this was done with the apparent intent to make Yukos insolvent and ultimately bankrupt Yukos," Yukos Foundation, which protects Yukos assets outside Russia, said at the time.
Russia's final argument in the legal battle was alleging fraud by the former Yukos shareholders, but this argument was dismissed by the Amsterdam Court of Appeal on Tuesday. According to the court, Russia alleged the fraud too late and even if it wasn't so late, the claim would not have changed the court's decision.
"We will continue to focus our attention on the ongoing enforcement against Russian state assets in the Netherlands, England, and the United States, and we do not rule out we will start enforcement proceedings in other countries as well," Tim Osborne, director of GML, a company that unites the former majority shareholders, said in a statement carried by the Associated Press.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More