Hague court orders Russia to pay $ 50 b in Yukos case
Tuesday, 29 July 2014 00:01
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MOSCOW (Reuters): The Hague’s arbitration court ruled on Monday that Russia must pay a group of shareholders in defunct oil giant Yukos around $ 50 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.
The Hague court said it had awarded shareholders in the GML group just under half of their $ 114 billion claim, going some way to covering the money they lost when the Kremlin seized Yukos, once controlled by Mikhail Khodorkovsky.
Tim Osborne, director of GML, welcomed the award, which he said was the largest ever, as ‘very favourable’.But Foreign Minister Sergei Lavrov said Moscow would most likely appeal the decision, underlining that the shareholders, who have battled through the courts for a decade, will have to fight further to receive the compensation.
“The Russian side, those agencies which represent Russia in this process, will no doubt use all available legal possibilities to defend its position,” he said when news of the award leaked ahead of the official announcement.
The ruling hits Russia at a time when it faces international sanctions about its role in Ukraine and anger over the downing of a Malaysian airliner over eastern Ukraine, where Moscow-backed rebels are fighting a separatist campaign. The country is also grappling with slowing economic growth.
The Permanent Court of Arbitration in the Hague announced that Russia must pay the compensation to subsidiaries of Gibraltar-based Group Menatep, a company through which Khodorkovsky, once Russia’s richest man, controlled Yukos.
Group Menatep now exists as holding company GML, and Khodorkovsky is no longer a shareholder in GML or Yukos.
Khodorkovsky, who is not a party to the action, was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005. His company, once worth $ 40 billion, was broken up and nationalised, with most assets handed to Rosneft, a company run by Igor Sechin, an ally of President Vladimir Putin.
Rosneft was not immediately available for comment.
