News / Europe

    Hague Court: Russia Must Pay Yukos Shareholders $50 Billion

    Freed Russian former oil tycoon Mikhail Khodorkovsky speaks during his news conference in the Museum Haus am Checkpoint Charlie in Berlin, December 22, 2013.
    Freed Russian former oil tycoon Mikhail Khodorkovsky speaks during his news conference in the Museum Haus am Checkpoint Charlie in Berlin, December 22, 2013.
    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.

    GML said the Permanent Court of Arbitration ruled that the Russian Federation sought to bankrupt Yukos and appropriate its assets and that it was determined to do whatever was necessary to achieve this purpose.

    Tim Osborne, director of GML, welcomed the award, which he said was the largest ever, as “very favorable.”

    Russia likely to appeal

    But Foreign Minister Sergey 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 court 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 is not a party to the action.

    His company, once worth $40 billion, was broken up and nationalized, 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.

    Its shares were down 0.6 percent at 0830 GMT, while the RTS index of Russian shares was down 1.8 percent.

    Human rights court case

    Separately, The European Court of Human Rights (ECHR) in Strasbourg is expected on Thursday to announce a decision on Yukos's multibillion-dollar claim against Russia, ruling on 'just satisfaction' or compensation, a Yukos spokeswoman said.

    Yukos's application in the ECHR, which is on behalf of all Yukos shareholders, argued that Yukos was unlawfully deprived of its possessions by the imposition of bogus taxes and a sham auction of its main asset.

    In a case that Kremlin critics said offered a stark example of Putin's increasingly autocratic rule, Khodorkovsky was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005.

    Putin justified the move by saying: “A thief must be in jail,” quoting a popular Soviet blockbuster.

    Putin pardoned Khodorkovsky in December after he had spent 10 years in jail. He now lives in Switzerland.

    The newspaper Kommersant, which earlier reported the Hague ruling, said the court ruled that Russia had infringed an international energy charter, adopted in 1991, that envisaged legal issues for investments in energy sectors.

    Russia will have 180 days, until January 15 2015, to start paying the $50 billion awarded by the Hague's arbitration court to a group of Yukos shareholders, a lawyer for the shareholder group said on Monday.

    After that period, interest will start being accrued, said Emmanuel Gaillard, Lead counsel, Shearman and Sterling LLP.

    The newspaper cited GML director Osborne as saying GML will force Russia to pay out the compensation “if it wouldn't make payments within the court-defined timeframe."

    Any funds won will be shared amongst the shareholders.

    Business partner

    The biggest ultimate beneficial owner is Russian-born Leonid Nevzlin, a business partner who had fled to Israel to avoid prosecution. He has a stake of around 70 percent.

    A spokesperson for Nevzlin declined to comment.

    The other four ultimate beneficial owners, each of whom owns an equal stake, are Platon Lebedev, Mikhail Brudno, Vladimir Dubov and Vasilly Shaknovski.

    After he was jailed, Khodorkovsky ceded his controlling interest in Menatep, which owned 60 to 70 percent of Yukos, to Nevzlin.

    GML shareholders are not expecting to claim twice, so if they receive monies pursuant to one case it would reduce their claim under the other, Osborne had previously told Reuters.

    You May Like

    US Leaders Who Served in Vietnam War Look Back and Ahead

    In New York Times opinion piece, Secretary of State John Kerry, Senator John McCain and former Senator Bob Kerrey say as US strengthens relations with Vietnam, it is important to remember lessons learned from war

    Trans-Adriatic Pipeline to Boost European Energy Security

    $4.5 billion-pipeline will become operational in 2020 and will deliver gas from Azerbaijan’s Shah Deniz II field to southern Italy

    Video California Celebration Showcases Local Wines, Balloons

    Annual festival showcases the region's harvested agriculture, fine wines and offers opportunities to experience the gentle breeze in a hot air balloon flight

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: DellStator from: US
    July 28, 2014 9:16 PM
    Finally, someone with a memory pointing out that the "oligarchs" in Russia do not control Putin, Putin controls them. Any who annoy him the state seized their assests, their business (and if I recall in this instance, arrest them, try them and convict them).
    As to Russia paying this fine, yeah right, the world can trust them to do that just like we could trust them not to invade the Crimea or send troops and arms into the Ukraine.
    On the bright side, Russia raised it's interest rate, ahh, the good old days, when Russia was paying what 20%, 25% interest on it's bonds, until it defaulted.
    Anyone who does business with Russia now and forever is either shilling for the Russian gov't and hoping Putin will make you an "Oligarch" or a fool about to be parted from your money.

    by: Marios
    July 28, 2014 2:51 PM
    In whose world will Russia pay out, unlikely - if they can get away with the downing of the Malaysia airliner, what is a Court judgement? Watch this space,

    by: Mario from: Italy
    July 28, 2014 5:56 AM
    We must punish Russia! It's nest of the evil in Europe!

    by: Igor from: Russia
    July 28, 2014 5:42 AM
    You will see that the rulle of such western court is worthless to Russia because the court itself is manipulated by the West.

    by: Andrew from: UA
    July 28, 2014 5:22 AM
    VOA could you pls provide more sources for this news

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora