Dutch Supreme Court rejected Russia’s $ 57bn Yukos petition

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Dutch Supreme Court rejected Russia’s $ 57bn Yukos petition
Dutch Supreme Court rejected Russia’s $ 57bn Yukos petition
4 December 2020, 17:23Incidents
Russia failed to obtain an adjournment in the case of the payment of $ 57 billion to the former shareholders of the Yukos oil company: the Supreme Court of the Netherlands rejected the Russian petition.

A court in the Netherlands put an end to a long dispute between the former Yukos shareholders and Russia in the case of the payment of material compensation to them. The lawsuits in this case lasted more than six years.

After Yukos, one of the country's largest oil companies, went bankrupt in a tax-violation case, its beneficiaries, led by Mikhail Khodorkovsky, received lengthy prison sentences. Many considered the arrest of Khodorkovsky to be politically motivated, citing among the reasons for Khodorkovsky's actions in support of the opposition in Russia. After his release from prison, Khodorkovsky was forced to leave the territory of the Russian Federation.

In July 2014, the arbitration court in The Hague recognized the actions of the Russian Federation in relation to the ex-owners of Yukos as expropriation. In 2015, the District Court of The Hague overturned this decision, and five years later, in February 2020, the Court of Appeal of the Hague again upheld the complaint of the ex-shareholders, ruling to pay the applicants over $ 57 billion, of which $ 50 billion was the debt itself, and $ 7 billion - in interest ...

Russia appealed against the court decision, pointing out that the instance neglected the facts of violation of anti-corruption legislation, and the ex-owners "cannot be recognized as bona fide investors in the sense of the Energy Charter Treaty to which they refer." The Ministry of Justice noted that the plaintiff companies "misled the arbitrators about the ultimate beneficiaries of the three shell companies that filed claims against Russia," and the Hague court ignored "Russia's lack of unequivocal consent to arbitration in the claim". However, Moscow's arguments were not accepted. Then in October 2020, Russia asked to suspend the execution of the decision. But this measure was in vain.

“In a case between the Russian Federation and three former shareholders of the Yukos oil company, the Supreme Court today rejected the Russian Federation's motion to suspend the execution of the 2014 arbitration awards. These decisions obliged the Russian Federation to pay about $ 50 billion in compensation for failing to protect the interests of shareholders", - Kommersant reports.

As follows from the court's decision, the former shareholders of Yukos (Veteran Petroleum Ltd, Yukos Universal Ltd and Hulley Enterprises Ltd, which owned 70.5% of Yukos shares) can continue to seek enforcement of the arbitral awards.

In July, the Russian Constitution was amended to give priority to national law over international law. Some experts attributed its appearance, among other things, to the unwillingness of the country's leadership to enforce the court decision in the Yukos case.

However, after the announcement of the verdict of the Supreme Court in The Hague, many are inclined to believe that an astronomical amount will still have to be paid, since the decision was made before the amendments were introduced, and the law does not have retroactive effect.

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