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Home News European court to rule Tuesday on Yukos v. Russia

European court to rule Tuesday on Yukos v. Russia

Published on 19/09/2011

Europe's rights court will rule Tuesday in former oil giant Yukos's case against Russia, where the defunct company claims it was illegally targetted by the state over tax fraud.

Yukos, once headed by jailed opposition figure Mikhail Khodorkovsky, wants $98 billion (72 billion euros) in damages, an amount more than double Russia’s annual defence budget that, if awarded, would be the largest penalty ever awarded by the Strasbourg-based court.

Yukos was established by the Russian government in 1993, to acquire and manage several independent oil companies.

It was privatised through the mid-1990s, part of the privatisation wave that swept through the Russian economy as the country sought to liberalise after decades of centralised Soviet control.

Khodorkovsky led the company’s hugely profitable privatisation campaign, acquiring immense personal wealth in the process, but he was jailed in 2003 for fraud and tax evasion.

His supporters say he was prosecuted for daring to politically challenge Russian strongman Vladimir Putin.

In its complaint to the European Human Rights Court, Yukos claims it was unjustly targetted by the state on tax enforcement issues, which led to its collapse and subsequent liquidation in November 2007.

Yukos further claims that Russia’s inquiries into its tax burden were irregular and that the company’s right to a fair hearing was not honoured. Khodorkovsky and his business partner Platon Lebedev were convicted in Russia in 2003, and sentenced to 13-years in prison.

Ruling on a separate case filed by Khodorkovsky in 2004, the Strasbourg court in May censured Russia for its treatment of the jailed tycoon, but rejected charges that his detention was politically motivated.