Hague Orders Russia to Pay Yukos Shareholders $51.6 Billion

Arbitration court rules Kremlin carried out 'politically motivated' expropriation of oil giant's assets; Moscow expected to appeal.

Reuters
Reuters
Pumping gear at Russian oil field that was owned by Yukos.
Pumping gear at Russian oil field that was owned by Yukos.Credit: Dmitry Beliakov / Bloomberg News
Reuters
Reuters

The Hague's arbitration court ruled on Monday that Russia must pay a group of shareholders in oil giant Yukos $51.6 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.

"Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction," the court said. "The primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets."

The arbitration panel in the Netherlands 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.

"The award is a slam dunk. It is for $50 billion, and that cannot be disputed," said Tim Osborne, director of GML. "It's now a question of enforcing it."

Leonid Nevzlin, the biggest ultimate beneficial owner of defunct oil giant Yukos, and 20-percent owner of Haaretz, expressed satisfaction with the Hague's arbitration court ruling.

"I am very pleased the international tribunal in the Hague decided that Russia violated international laws and illegally expropriated Yukos," the Russian-born Nevzlin said in an emailed statement on Monday.

Nevzlin, a business partner who had fled to Israel to avoid prosecution, has a stake of around 70 percent.

Russian FM: Appeal likely

But Foreign Minister Sergei Lavrov said Moscow would most likely appeal the decision, so shareholders, who have battled through the courts for a decade, might have longer to wait.

"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.

Lawyers, however, said there were only limited grounds on which to appeal.
The panel of judges, which has been reviewing the case since 2005, concluded that officials under President Vladimir Putin had manipulated the legal system to bankrupt Yukos.

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.

Click the alert icon to follow topics:

Comments

SUBSCRIBERS JOIN THE CONVERSATION FASTER

Automatic approval of subscriber comments.

Subscribe today and save 40%

Already signed up? LOG IN

ICYMI

נתניהו עם כיפה שחורה על הראש נשען בשתי ידיו על הכותל

Israel Is Heading for Its Most 'Jewish' Election Ever

An El Al jet sits on the tarmac at John C. Munro International Airport in Hamilton, Thursday, in 2003.

El Al to Stop Flying to Toronto, Warsaw and Brussels

FILE PHOTO: A Star of David hangs from a fence outside the dormant landmark Tree of Life synagogue in Pittsburgh's Squirrel Hill neighborhood in 2021.

American Judaism Is in Decline. That's Great News for American Jews

Crowds at Israel's Ben-Gurion International Airport, in April.

U.S. Official: West Bank Entry for Palestinian Americans Unrelated to Israeli Visa Waivers

Haaretz spoke with several people who said they had fled Ukraine, arrived in Israel,  and were asked to undergo DNA tests in order to establish paternity.

'My Jewish Grandmother Has a Number on Her Arm, Why Does Israel Greet Me This Way?'

People taking part in the annual "March of the Living" to commemorate the Holocaust, between the former death camps of Auschwitz and Birkenau in Oswiecim, Poland, four years ago.

It’s Not Just the Holocaust. Israel Is Failing to Teach the History of the Jews