Page 17 - FSUOGM Week 49

FSUOGM POLICY FSUOGM

Russia suffers further setback

in Yukos case

RUSSIA THE Netherlands’ top court ruled on Decem- in the Netherlands, although it is likely to be fol-
ber 4 that shareholders of now-defunct Russian lowed in other jurisdictions as well. Russia’s Jus-
This represents Russia's oil giant Yukos could continue pursuing their tice Ministry responded by saying that the court
last legal avenue for claims against Russia worth $50bn pending a had wrongly applied “an overly harsh standard
reversing the award. final ruling in the long-running legal dispute. in assessing the chances” it would win the case
The Permanent Court of Arbitration of The next year.
Hague in 2014 concluded that the Kremlin had Yukos was once Russia’s biggest oil producer
staged a co-ordinated attack on Yukos in the and briefly its most valuable company, having
early 2000s in order to bring its assets back under accumulated a number of major Siberian oil-
state control, ordering Russia to pay $50bn in fields during privatisation deals in the 1990s,
compensation to shareholders. Moscow has including the controversial loans-for-shares
been fighting the ruling ever since. scheme. The company’s fortunes changed in
In a fresh setback to Russia, the Dutch 2003, when the government accused it of owing
Supreme Court “dismissed the Russian Fed- $27bn in back taxes. In October of that year its
eration’s application to suspend enforcement” owner Mikhail Khodorkovsky, once Russia’s
of the 2014 award until the court reaches its richest man, was arrested on charges of fraud
verdict. “The Supreme Court’s decision means and put in prison.
that the former shareholders can continue to Moscow is widely seen as having instigated
enforce the arbitral awards pending its final Yukos’ downfall in order to reassert its control
judgment.” over the oil industry. It is also believed the gov-
Lawyers on both sides of the dispute will pres- ernment wanted to prevent Khodorkovsky from
ent their arguments to the court in early 2021, meddling in Russian politics, including his open
the court said. This represents Russia’s last legal funding of opposition groups. The company’s
avenue for reversing the award. But the court assets were sold at bankruptcy auctions, with
said on December 4 that the likelihood of Rus- many falling into the hands of Russia’s national
sia’s arguments succeeding in the case are “not oil company (NOC) Rosneft.
such as to warrant” suspending enforcement Russia’s Justice Ministry said in May that the
before the final verdict. damages in the Yukos case now amounted to
The Dutch ruling only applies to asset freezes $57bn, including interest. ™

Week 49 09•December•2020 www. NEWSBASE .com P17