Dutch court confirms sentence requiring Russia to compensate Yukos shareholders

An Amsterdam court confirmed this Tuesday a sentence in arbitration that requires Russia pay US$50,000 million (46,220 million euros) to three shareholders of the former Russian oil group Yukos for damages, a legal battle that continues 18 years after the company’s bankruptcy.

The Amsterdam Court of Appeal decided today that “the arbitration awards in the Yukos case remain valids” and that Russia’s arguments that shareholders had committed fraud “they were not presented on time” during the arbitration procedure, despite the fact that, at the time the case was opened, the “alleged deception was already known” by the Russian authorities.

The Permanent Court of Arbitration (PCA) ruled in 2014 that Moscow forced Yukos to declare bankruptcy in 2006 using tax strategies, then sell its assets to state companies, and required the Russian state to pay US$50 billion to three former shareholders, the largest compensation ordered by this Court in its entire history.

However, the ruling was challenged in different judicial instances. In 2016, an Amsterdam court overturned that decision because it found that the PCA does not have jurisdiction to review the case, since Moscow has not ratified the Energy Charter Treaty (ECT).

The case reached the Amsterdam Court of Appeal. Russia requested the annulment of the ruling, arguing that it contradicted the conclusions of the European Court of Arbitration in Strasbourg, which twice found Yukos guilty of large-scale tax fraud.

However, the Appeal confirmed the historic ruling of the CPA in 2020 only for, at the end of 2021, the Supreme Court to invalidate the ruling for procedural reasons and ask the Appeal to repeat the procedure, which ruled this Tuesday to confirm the ruling. of the CPA and the imposition of the fine on Russia.

“The court further considers that even if the Russian Federation had filed the fraud appeal in time, the arbitration decisions would have remained in force. “The documents and statements presented by the Russian Federation in the proceedings would not have been relevant to the arbitrators’ decision,” the Court added today.

This unprecedented ruling by the CPA considered that the Russian State must pay the million-dollar amount to the former shareholders of the multinational Yukos, owned – until its bankruptcy – by the oligarch Mikhail Khodorkovsky, exiled in London since 2015.

Yukos was accused by the Russian authorities of tax evasion and of organizing the theft of oil extracted by its subsidiaries, in a judicial process that, in the opinion of the company and Khodorkovsky, was a harassment and demolition operation that only sought to obtain the confiscation of their assets.

Khodorkovsky, once the richest man in the world, was arrested in 2003, convicted of several economic crimes and sentenced to 14 years in prison, although he was pardoned in 2013 by Russian President Vladimir Putin.

The billionaire denounced that he was the victim of a campaign orchestrated by the Kremlin to deprive him of his oil empire for supporting the opposition to Putin at the beginning of the last decade.