Dutch court upholds $50-bn payment award in Yukos case

Dutch court upholds $50-bn payment award in Yukos case

A Dutch court quashed an appeal by Russia in a record $50-billion case Tuesday, paving the way for a payment to former shareholders of dismantled oil giant Yukos.

The decision is the latest in a legal tug-of-war over Yukos which broke up in the early 2000s after the arrest of its former tycoon owner, Kremlin critic Mikhail Khodorkovsky.

The Amsterdam Appeals Court turned down a claim by Moscow that shareholders had “committed fraud” during the arbitration process, saying Russia’s appeal was too late to influence arbitral decisions.

In 2014 the international Permanent Court of Arbitration (PCA) in The Hague ruled in favour of shareholders, ordering Moscow to pay what is believed to be the world’s biggest arbitration award.

Russia took the decision to the Dutch courts, with Supreme Court judges eventually in 2021 shunting the case back to a lower ranking appeals court on procedural grounds, for another round of hearings.

Back then, Supreme Court judges said the appeals court had wrongly dismissed Moscow’s argument that shareholders “committed fraud” during the arbitration process.

But the Amsterdam Appeals Court stuck to its original decision at the latest hearing.

“The Amsterdam Court of Appeal decided today that the arbitration awards in the Yukos case remain valid,” it said in a statement.

“The Russian Federation did not make its claims of fraud timely enough for it to annul the awards,” the appeals judges said, adding “it therefore rules that the fraud claim was made too late.”

Yukos was one of a number of companies formed as the Soviet Union crumbled in the 1990s when businessmen like Khodorkovsky scooped up former Soviet assets at knock-down prices.

Khodorkovsky then became a vocal critic of Russian President Vladimir Putin, who warned the growing class of so-called oligarchs against meddling in politics. Khodorkovsky was arrested in 2003.

After his downfall, Yukos collapsed in the face of huge government tax demands and was sold off in opaque auctions to state companies led by Rosneft between 2004 and 2006.

State-owned Rosneft has since grown into one of the world’s biggest listed oil companies.

Khodorkovsky, who spent a decade in jail and now lives in exile, is not a party to the case.

But the former majority shareholders in Yukos sought compensation from Russia.

Tuesday’s decision however is not the end of the saga as there are still a flurry of ongoing cases including in London courts.

jhe/ric/tw

© Agence France-Presse