Court reinstates order for Russia to pay $50 bln over Yukos

Court reinstates order for Russia to pay $50 bln over Yukos

Russia vowed Tuesday to contest the ruling of a Dutch court demanding Moscow pay 50 billion US dollars in compensation to shareholders of the now defunct Russian oil giant Yukos.

The original decision by the Hague-based Permanent Court of Arbitration was much like Tuesday's ruling but this was then overturned, in favor of the Kremlin.

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.

It ordered Moscow to pay more than US$50 billion to the former shareholders - a record award for the arbitration tribunal.

The ministry added it will continue to uphold its legitimate interests and plans to appeal the ruling in the Supreme Court of the Netherlands. The oil company was accused of tax crimes and declared bankrupt by a Russian court in 2006 with its assets sold at auction as part of the liquidation process. "In the opinion of the court, there is no question of conflict with Russian law", The Hague Court of Appeal said in a statement.

"The arbitration court had jurisdiction under the Energy Treaty Charter (ECT)", the appeals court said in its statement.

Shareholders then appealed against this ruling, with the verdict expected on Tuesday.

The Russian Justice Ministry pointed out that the European Court of Human Rights (ECHR) did not find any political motives in the criminal prosecution of former Yukos executives Mikhail Khodorkovsky and Platon Lebedev and that no compensation would be awarded.

The bulk of the Yukos business was taken over by state-run Rosneft, which is now one of Russia's most powerful energy firms.

Khodorkovsky was pardoned by Russian President Vladimir Putin in December 2013. Former Yukos CEO Mikhail Khodorkovsky, then the richest man in Russian Federation, had been jailed for more than a decade on charges of fraud and tax evasion, among others.

The claimants have since sought to win compensation for what they say are their losses caused by the break-up of Yukos. He spent a decade in prison before being pardoned by Putin and flown out of Russian Federation.

The concern "relates to the situations of the Yukos takeover by the Russian oligarchs during its privatisation in 1995 and 1996", Russian govt lawyer Andrea Pinna told AFP in advance of the ruling.

As the Soviet Union crumbled, unscrupulous businessmen amassed huge fortunes and influential empires by scooping up former Soviet assets - particularly in raw materials - at bargain-basement prices.

"Russia considers that the acquisition of Yukos was only achievable by way of corruption and other unlawful functions", Pinna mentioned.

Emmanuel Gaillard, representing previous shareholders, explained to AFP that "Russia is generating sizeable diplomatic attempts to attempt and discredit the players in this case" which he known as "the finest expropriation of the 21st century".

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