Yevtushenkov Arrested for Refusing Rosneft, Khodorkovsky Says

Yesterday Russia authorities placed the billionaire owner of Sistema Vladimir Yevtushenkov under house arrest while he is investigated for alleged money laundering, claiming foul play in the company’s acquisition of shares in the oil company Bashneft.

The Yevtushenkov matter drew immediate comparisons with the Yukos affair and politically motivated arrest of Mikhail Khodorkovsky in 2003, as Bashneft is seen as a company coveted by Rosneft’s chief Igor Sechin.

Speaking with Vedomosti, Mikhail Khodorkovsky says that the state’s attack against Yevtushenkov, although apparently more commercial than political, illustrates a “complete loss of control” on behalf of President Vladimir Putin as he (Yevtushenkov) is being punished for refusing to hand over property to Rosneft.

“Vladimir Yevtushenkov was stubborn, he did not want to pass his property at the conditions he was apparently offered. So it was decided to use the familiar old method. I think, there is nothing else here,” Khodorkovsky told Vedomosti.

According to an article published by RIA Novosti, the court is to determine whether the shares Yevtushenkov legalized had been stolen from Russian Bakotorstan Republic’s oil companies.

Khodorkovsky further said the two cases had differences, as he was a critic of the Kremlin, while Yevtushenkov is being pressured for purely economic reasons.

“The Yukos case was still mainly based on a socio-political conflict… While here, the interest is purely commercial, this is the direct use of this situation,” he told RBK newspaper.

He added that Yevtushenkov should agree to whatever conditions are offered to him, otherwise “the situation will be harsher.”

“If Yevtushenkov has a chance to reach an agreement, he should go for it. I would not see any shame or discomfort if he agreed on any conditions,” Khodorkovsky said.

Mikhail Khodorkovsky was pardoned and released from prison in December 2013 after more than ten years in jail. Rosneft took over the main assets of the oil company Yukos shortly following his original arrest in October 2003.

Posted in Other Developments |

Khodorkovsky to Speak at Le Monde Festival in Paris

Mikhail Khodorkovsky will be a featured speaker at the upcoming Le Monde Festival, held at the Opera-Bastille on September 20, 6:00PM. The forum is open to everyone, however registration is required online.

Below is an English translation of the announcement published in Le Monde:

Mikhail Khodorkovsky, businessman

Discussion with Mikhail Khodorkovsky

Ten years in prison: no other Russian businessman has paid such a high price as Mikhail Khodorkovsky after Vladimir Putin came to power. The former head of Yukos – dismantled at its own benefit by the Kremlin – has become the symbol and the victim of the deal imposed by Putin to the richest men and, beyond, to the whole russian society: obey in everything and you will be rich.

Released after a presidential pardon in December 2013, Mikhail Khodorkovski was forced to leave immediately his country. As soon as he was released, he made a commitment to the development of the civil society, the values of democracy and the education imperative. Committed, yes, but how? After having shown restraint in media and having taken interest in the Ukrainian crisis, where he went several times this year, the former businessman and the most famous political prisoner in Russa is ready to enter a new phase of his destiny.

Posted in Events |

Council of Europe Must Demand Russia to Explain Failure to Implement European Court Judgment

Lawyers for the Applicants call on the Committee of Ministers to ask Russia to explain its complete failure to implement the European Court’s judgment

Lawyers for the Applicants have lodged an urgent submission at the Committee of Ministers at the Council of Europe.  In it they call on the Committee of Ministers to demand an explanation from the Russian Government as to its complete failure to implement the European Court’s judgment on the applications that arose from the first criminal trial of the Applicants.

The submission concerns the European Court’s judgment in Khodorkovskiy and Lebedev (no. 2) v Russia, no. 11082/06, which was given on 25 July 2013 and which became final on 25 October 2013[1] (when it was confirmed that Russia would not seek to overturn it in the Grand Chamber of the European Court).    In the judgment the European Court found numerous serious findings of breaches of the European Convention.  The European Court noted that the Applicant’s lawyers “did not submit any claim for pecuniary damage. Under the head of non-pecuniary damages, he sought a ‘deliberately modest’ amount of EUR 10,000.”  The Court went on to grant the applicant “the sum sought, i.e. EUR 10,000, plus any tax that may be charged on that amount”.    The Russian Government had until 25 January 2014 to pay that sum.  In breach of its international obligations, the Russian Government has yet to pay the money which had been awarded and which the Applicant has indicated he wishes to be given to charity.

One of the European Court’s most important findings was in relation to the massive civil damages award that was made imposed on the two men in the first trial.   The trial court ordered the Applicants to pay 17.4 billion roubles (equivalent at the date to €500 million) that was said to relate to taxes paid in 1999-2000 by YUKOS affiliates in YUKOS promissory notes.   The European Court was damning in its criticism of that decision. It found the entirety of the award to be in breach of Article 1 of Protocol No 1 of the Convention.  The European Court said the Meshchanskiy District Court’s judgment “had no support either in the law or in judicial practice”[2] and concluded that “neither the primary legislation then in force nor the case-law allowed for the imposition of civil liability for unpaid company taxes on that company’s executives. This leads the Court to the conclusion that the award of damages in favour of the Tax Service was made by the Meshchanskiy District Court in an arbitrary fashion and thus contrary to Article 1 of Protocol No. 1 to the Convention.”[3]

Under Russian law a finding by the European Court of a violation of the Convention is a ground for resuming proceedings in a criminal case.  Consequently the Russian Supreme Court was asked to reconsider the judgment which it did in January 2014.   Despite the unequivocal terms of the European Court’s decision, the Russian Supreme Court left the civil damages award entirely unchanged.  The reasoning of the Russian Supreme Court has been severely criticised by then Applicant’s lawyers.  In their submission to the Committee of Ministers they say the Supreme Court’s decision “wholly fails to engage with the European Court’s detailed analysis and judgment in relation to the violation of Article 1 of Protocol No 1.  It is contradicted by the facts as well as the applicable law.  There can be no doubt that by dint of the RF Supreme Court’s judgment the Government of the Russian Federation has wholly failed to give effect to this aspect of the European Court’s judgment.

The lawyers went to argue that the Russian Government’s non-compliance had “grave consequences” for the Applicants “because of the enormous size of the falsified damages award in the suit that have been left in place against Mr Khodorkovskiy (and Mr Lebedev).   It represents a Sword of Damocles hanging over their heads. As a consequence Mr Khodorkovskiy is unable to return to Russia whilst Mr Lebedev has been denied a passport and so cannot leave Russia. Each of them undoubtedly suffers “grave consequences” because of the failure to give effect to the European Court’s unequivocal findings.”

In their submission, lawyers for the Applicants have called on the Committee of Ministers to pass a resolution asking the Russian Government “to explain the steps that they intend to take so as to “ensure that the violation has ceased and that the injured party is put, as far as possible, in the same situation as that party enjoyed prior to the violation of the Convention” as required under the Rules of the Committee of Ministers.”

[2] § 883 of the judgment in Khodorkovskiy (No. 2)

[3] § 885 of the judgment in Khodorkovskiy (No. 2)

Posted in Case Updates |

Yukos Achieves Historic ECtHR Award

The following statement was published on The Yukos Library:

€1.9 billion ($2.5 billion) is the largest award ever made by ECtHR by a factor of twenty-one times.

Today the European Court of Human Rights (ECtHR) in Strasbourg announced its largest ever award of Just Satisfaction. The award of €1.9 billion ($2.5 billion) to YUKOS Oil Company (YUKOS) is 21 times larger than any previous award made by the ECtHR in its history.

Commenting on the announcement, YUKOS’ former Chief Executive Officer, Steven Theede said: “This is by multiples the largest award that the ECtHR has ever made, although the award is substantially less than the claim submitted by YUKOS. All YUKOS shareholders will benefit from this decision. The pursuit of this case, originally filed in April 2004, was to ensure that YUKOS shareholders obtained recompense for the wrongful acts of the Russian Federation. It has been worth the effort. It is important to remember that in 2004, the ECtHR was the only judicial venue available to YUKOS as a legal entity because it could not seek the protection of international commercial tribunals, open only to investors.”

Bruce Misamore, former Chief Financial Officer said of the ruling: “We are very pleased that the ECtHR has awarded substantial damages for the Russian Federation’s illegal, unfair, hasty enforcement measures, including fines and bailiffs charges, which resulted in the destruction of YUKOS. However, the ECtHR has failed to recognize the true economic losses sustained by YUKOS shareholders. In particular, the judgment says nothing about compensation for the rigged auction of Yuganskneftegaz (YNG), despite the ECtHR’s 2011 ruling that the decision to auction YNG “was capable of dealing a fatal blow to YUKOS’ ability to survive the tax claims and to continue its existence”.”

Continue reading the full statement from shareholders on The Yukos Library.

Posted in Case Updates |

Khodorkovsky Wishes Pichugin Happy Birthday

Dear Alexei,

Yours is the hardest lot of any of us at Yukos. Yet you bear your cross in a more dignified manner than, possibly, many of us could.

I wish you strength and I wish you patience. The situation will definitely change.

Nor is the regime here forever.

Most importantly, hold on to your health.

You are important to all of us.

With profound respect,
Mikhail Khodorkovsky

Posted in Other Developments |

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