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Home News Yukos, Moscow lawyers back in court in $50bn appeal case

Yukos, Moscow lawyers back in court in $50bn appeal case

Published on 16/01/2017

Former shareholders of defunct Russian oil giant Yukos were back in a Dutch court Monday as Moscow's lawyers pressed judges for a quick resolution of a complex appeals case.

The claimants, led by the former main shareholder GML, in July last year appealed a Dutch court’s decision to overturn a ruling ordering Moscow to pay them a record $50 billion in damages.

“The Russian Federation has a significant interest in an expedient and concentrated conduct of this appeal,” Russian Federation representative Albert Jan van den Berg told judges at The Hague’s Appeals Court.

The $50 billion in damages “is a massive amount, also for the Russian Federation,” Van den Berg said, adding Russia “is entitled to obtain a final decision upholding the judgement of the District Court as quickly as possible.”

Yukos was once Russia’s biggest post-Soviet oil company but was broken up after its former owner, Kremlin critic and ex-tycoon Mikhail Khodorkovsky was arrested in 2003.

His arrest came shortly after Russian President Vladimir Putin, then prime minister, warned the nation’s growing class of oligarchs against meddling in politics.

Yukos was sold off in opaque auctions to state companies led by Rosneft between 2004 and 2006. State-owned Rosneft was then small, but has since become a leading player among the world’s biggest listed oil companies by production volume.

The claimants have sought since 2005 to win compensation for what they say are their losses caused by the break-up of Yukos.

The international Permanent Court of Arbitration, based in The Hague, ruled in 2014 that Russia had forced Yukos into bankruptcy with excessive tax claims and sold off its assets to state-owned companies.

It ordered Moscow to pay “in excess of $50 billion” to the former shareholders — a record award for the arbitration tribunal.

In a legal game of cat-and-mouse, the claimants led by GML, have lodged cases in various European courts seeking the seizure of Russian assets abroad after Moscow refused to pay out.

“Yukos had been illegally expropriated, it was politically motivated and the damages have been set at $50 billion,” said Jonathan Hill, GML’s communications director.

“We have full confidence in the court that our appeal will prevail,” he told AFP outside the courtroom.

Khodorkovsky, who is no longer a stakeholder, spent a decade in prison on charges of tax evasion, fraud and embezzlement which he and his supporters say were trumped up in revenge for his political ambitions.

He was suddenly pardoned by Putin in 2013 and flown out of the country.

A decision setting the date for an appeals hearing could still take several months.

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