Thursday, 23 May, 2024


Russia gets partial win in $50B case over bankrupt oil giant

The Dutch Supreme Court on Friday handed Russia at least a temporary victory in an appeal of what’s believed to be the world’s largest award in an arbitration case after former shareholders of bankrupted Russian oil giant Yukos accused the Kremlin of taking down the company to silence its CEO, a fierce critic of President Vladimir Putin.

The decision further extends what already has been a yearslong legal battle between Russia and former Yukos shareholders. It quashed a lower court ruling, effectively setting aside a $50 billion award made to the former shareholders in 2014 and sending the case to another court in Amsterdam to consider Russian claims that the shareholders committed fraud in the original arbitration hearings.

However, the highest Dutch court rejected the rest of Russia’s arguments, a move welcomed by the former shareholders, who said in a statement that they “won on all substantive grounds of Russia’s appeal.”

“We will study the Supreme Court ruling, but are confident that the Court of Appeal in Amsterdam will dismiss the baseless allegations raised by the Russian Federation, and the arbitral awards will be upheld,” said Tim Osborne, chief executive of GML, the holding company of former Yukos majority shareholders.

The Russian prosecutor-general’s office welcomed the ruling but said “it is regrettable” the high court didn’t dismiss the award outright.

“The Russian Federation expects that the Amsterdam Court of Appeal will interpret the remaining controversial issues in accordance with international law … and take comprehensive measures to protect the rights and legitimate interests of Russian taxpayers,” the office said in a statement.

An international panel of arbitrators concluded in 2014 that Moscow seized control of Yukos in 2003 by deliberately crippling the company with huge tax claims. The move was seen as an attempt to silence Yukos CEO Mikhail Khodorkovsky, a vocal Putin critic.

Khodorkovsky was arrested at gunpoint in 2003 and spent more than a decade in prison as Yukos’ main assets were sold to a state-owned company. Yukos ultimately went bankrupt.

The state launched “a full assault on Yukos and its beneficial owners in order to bankrupt Yukos and appropriate its assets while, at the same time, removing Mr. Khodorkovsky from the political arena,” the arbitrators said in their 2014 ruling.

The original case was handled under the Permanent Court of Arbitration, which is headquartered in The Hague. As a result, Russia appealed the arbitration decision in the Netherlands.

The Dutch Supreme Court ruled Friday that a lower appeals court in The Hague wrongly dismissed — on procedural grounds — Russia’s claim that “shareholders committed fraud in the arbitral proceedings.” Those fraud claims weren’t immediately clear.

In April, an independent adviser to the highest Dutch court had recommended that its judges reject Russia’s appeal in full.

Khodorkovsky is not involved in the case, which was brought by former shareholders united in a company called GML Ltd.

Credit: Yahoo News


0 comments on “Russia gets partial win in $50B case over bankrupt oil giant

Leave a Reply

Your email address will not be published. Required fields are marked *