Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ News / World/  Russia faces record $50 billion Yukos payout after Dutch ruling
BackBack

Russia faces record $50 billion Yukos payout after Dutch ruling

The Hague court found there was no conflict with Russian law in regards to a treaty that Russia signed
  • The ruling by The Hague Court of Appeal Tuesday reinstates an award issued in 2014 by an arbitration panel and could set off a new wave of efforts to seize Russian state assets around the world
  • Mikhail Khodorkovsky, the former owner of the Yukos Oil Company (File photo: AP)Premium
    Mikhail Khodorkovsky, the former owner of the Yukos Oil Company (File photo: AP)

    Russia may have to pay a record $50 billion arbitration ruling after a Dutch court ruled in favor of the former owners of Yukos Oil Co.

    The ruling by The Hague Court of Appeal Tuesday reinstates an award issued in 2014 by an arbitration panel and could set off a new wave of efforts to seize Russian state assets around the world. The decision is the latest twist in a 15-year legal saga that has raged between the Kremlin and the owners of what was once Russia’s biggest oil company.

    “We are ready for war, and a legal battle is better than any other kind," said Leonid Nevzlin, one of the former Yukos owners. “We can now begin a full-scale seizure of assets that are recognized as the property of the Russian state."

    The decision can be appealed to the Dutch Supreme Court.

    Russia will continue to defend its interests in the case and plans to appeal, the country’s Justice Ministry said in a statement.

    Long-Running Conflict

    The Yukos affair was a pivotal moment early in President Vladimir Putin’s now 20-year rule that reestablished the Kremlin as the ultimate power in Russia after the chaotic post-Soviet transition. The arrest of Yukos’s founder Mikhail Khodorkovsky, Russia’s richest man at the time, on the tarmac of a Siberian airport in 2003 sent a clear signal to other oligarchs that their interests were now subordinate to those of the state.

    The judgment could further strain relations between Russia and the Netherlands, which accuses the Kremlin of involvement in the 2014 downing of Malaysia Airlines Flight 17 over eastern Ukraine, in which 298 people died. Putin has denied any Russian role.

    In the wake of Khodorkovsky’s arrest, Yukos was dismantled amid billions of dollars of tax claims that he described as revenge for his funding of opposition parties. Putin issued a pardon to free Khodorkovsky in 2013 after a decade in prison on convictions for fraud and tax evasion linked to Yukos. He now lives in London, where he campaigns in exile for an end of Putin’s system.

    Khodorkovsky sold his claims to Yukos to his former partners, including Nevzlin, who argue that their property was expropriated by the Russian state.

    Kremlin Defiance

    The Hague court found there was no conflict with Russian law in regards to a treaty that Russia signed, but never ratified, according to a copy of the ruling. In 2016, an appeals court had overturned the initial ruling, citing the treaty.

    The Kremlin has said it isn’t bound by the award, which amounts to about 3% of Russia’s gross domestic product. Russia’s Constitutional Court ruled in 2017 that the country wasn’t liable to pay billions of dollars in Yukos-related damages ordered by the European Court of Human Rights. Putin in January proposed amending the constitution to give Russian law precedence over international obligations.

    After the 2014 ruling, the former Yukos shareholders sought to seize assets in countries including France, Belgium, the U.S. and India. In Belgium and France, state assets that had been frozen were unblocked following Russian protests.

    Nevzlin Tuesday declined to comment on what assets the shareholders might seek to seize. In 2014, a representative of the former shareholders said they may target state-owned Rosneft PJSC, which took over most of Yukos’ assets and operates in 25 countries around the world.


    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 18 Feb 2020, 10:28 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App