MOSCOW/LONDON/AMSTERDAM (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.
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.”
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.
“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 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.
“This decision affects the assessment of the long-term financial stability of Russia and could become the basis for arguments for revising Russia’s ratings by international rating agencies,” said Credit Suisse economist Aleksei Pogorelov… see more