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tool to limit Russia's ability to finance the war in Ukraine, while critics believe that Russia can easily circumvent the cap, rendering it ineffective.
2.5 Yukos shareholders can still target Russia’s US assets
The US court for the District of Columbia has declined Russia's demand for an immunity from claims by former shareholders of oil company Yukos, exposing Russian state assets in the US to legal claims, RBC business portal reports.
To remind, over $50bn case being pursued by former shareholders of Yukos, a more than decade-old legal battle followed by bne IntelliNews.
In 2014, the International Court of Arbitration in The Hague, after a decade of proceedings involving the Russian side, awarded the former controlling shareholders of Yukos – Hulley Enterprises (Cyprus), Veteran Petroleum (Cyprus) and Yukos Universal (Isle of Man) – $50bn in compensation for the expropriation of the company, RBC reminds.
Reuters estimated that the sum has now reached $60bn including interest. Russian authorities refused to pay the damages, due to not ratifying the multilateral Energy Charter Treaty (ECT), which was the basis for the former Yukos shareholders to initiate arbitration.
The former shareholders have attempted to enforce arbitral awards in several jurisdictions, including the US, where Russia has state assets, while Russia challenged the 2014 judgements in the Dutch court system.
The case is currently being studied by the Amsterdam Court of Appeal, which must assess Russia's argument that the ex-shareholders committed fraud during the arbitration proceedings (the other arguments of the Russian side were rejected by the Dutch courts).
Yukos was once Russia’s biggest oil producer and briefly its most valuable company, having accumulated a number of major Siberian oilfields during privatisation deals in the 1990s, including the controversial loans-for-shares scheme. The company’s fortunes changed in 2003, when the government accused it of owing $27bn in back taxes. In October of that year its owner Mikhail Khodorkovsky, once Russia’s richest man, was arrested on charges of fraud and put in prison.
Moscow is widely seen as having instigated Yukos’ downfall in order to reassert its control over the oil industry. Specifically, the Kremlin objected to Khodorkovsky’s plans to build a privately owned oil pipeline from Siberia to northern China that the state considered the prerogative of the government and foreign policy. Khodorkovsky was also accused of bribing many deputies in the Duma and Federation council to give him influence over the political process.
15 RUSSIA Country Report December 2023 www.intellinews.com