Yukos Cases

yukos_1598901cMikhail Khodorkovsky divested himself of all shareholdings in Yukos in 2004, and as such, is not party to any claims for damages made by Yukos shareholders. The official source of information on the shareholders’ cases is The Yukos Library.

Yukos at the European Court of Human Rights

Khodorkovsky’s position has always been that Yukos – the largest private taxpayer in Russia – was forced into an unwarranted and unjust state-orchestrated bankruptcy by corrupt officials at the highest levels, and that long into the future, the Russian people will continue to pay the tremendous economic, political and social costs of the destruction of this company that was on the vanguard of their country’s modernisation.

On July 31, 2014, 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”.”

For more information about the Yukos case at the ECtHR, please visit The Yukos Library.

GML ENERGY CHARTER TREATY ARBITRATION, PERMANENT COURT OF ARBITRATION, THE HAGUE

In the largest-valued international arbitration in history, former Yukos majority shareholders are seeking compensation from Russia for an aggregate amount of approximately $100 billion. The claimants are two GML subsidiaries (Hulley Enterprises and Yukos Universal), and Veteran Petroleum, the pension fund for the benefit of former Yukos employees.

On July 28, 2014, the Permanent Court of Arbitration found that Yukos had been destroyed and sold off for political reasons, awarding $50bn in damages against Russia, by far the biggest compensation award ever made in an arbitration case.

“Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction,” the arbitration panel found, adding that Moscow had aimed to “bankrupt Yukos, assign its assets to a state-controlled company and incarcerate [Mr Khodorkovsky] who gave signs of becoming a political competitor” to Russian president Vladimir Putin.

In response to the historic ruling by the arbitration panel, Khodorkovsky issued a statement saying that the decision was very important because it was the first time a neutral court had examined the Yukos matter.

“It is the first independent tribunal to have considered the YUKOS case in its entirety, to have examined the evidence and to have heard witness testimony,” Khodorkovsky’s statement reads. “The findings were predictable for any unbiased observer of the disgraceful Basmannyi travesty of justice: from beginning to end, the YUKOS case has been an instance of unabashed plundering of a successful company by a mafia with links to the State.”

Read the full ruling by the Permanent Arbitration Court here.

Other legal proceedings underway internationally involve battles between former Yukos management and Rosneft over Yukos assets outside of Russia. For more information, please visit The Yukos Library.

 

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