Hague Court: Russia Must Pay Yukos Shareholders $50 Billion

The Hague's arbitration court ruled on Monday that Russia must pay a group of shareholders in defunct oil giant Yukos around $50 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.
The Hague court 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.
GML said the Permanent Court of Arbitration ruled that the Russian Federation sought to bankrupt Yukos and appropriate its assets and that it was determined to do whatever was necessary to achieve this purpose.

Tim Osborne, director of GML, welcomed the award, which he said was the largest ever, as “very favorable.”

Russia likely to appeal
But Foreign Minister Sergey Lavrov said Moscow would most likely appeal the decision, underlining that the shareholders, who have battled through the courts for a decade, will have to fight further to receive the compensation.
“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.
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.
The court in the Hague announced that Russia must pay the compensation to subsidiaries of Gibraltar-based Group Menatep, a company through which Khodorkovsky, once Russia's richest man, controlled Yukos.
Group Menatep now exists as holding company GML, and Khodorkovsky is no longer a shareholder in GML or Yukos.
Khodorkovsky is not a party to the action.
His company, once worth $40 billion, was broken up and nationalized, with most assets handed to Rosneft, a company run by Igor Sechin, an ally of President Vladimir Putin.
Rosneft was not immediately available for comment.
Its shares were down 0.6 percent at 0830 GMT, while the RTS index of Russian shares was down 1.8 percent.

Human rights court case
Separately, The European Court of Human Rights (ECHR) in Strasbourg is expected on Thursday to announce a decision on Yukos's multibillion-dollar claim against Russia, ruling on 'just satisfaction' or compensation, a Yukos spokeswoman said.
Yukos's application in the ECHR, which is on behalf of all Yukos shareholders, argued that Yukos was unlawfully deprived of its possessions by the imposition of bogus taxes and a sham auction of its main asset.
In a case that Kremlin critics said offered a stark example of Putin's increasingly autocratic rule, Khodorkovsky was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005.
Putin justified the move by saying: “A thief must be in jail,” quoting a popular Soviet blockbuster.
Putin pardoned Khodorkovsky in December after he had spent 10 years in jail. He now lives in Switzerland.
The newspaper Kommersant, which earlier reported the Hague ruling, said the court ruled that Russia had infringed an international energy charter, adopted in 1991, that envisaged legal issues for investments in energy sectors.
Russia will have 180 days, until January 15 2015, to start paying the $50 billion awarded by the Hague's arbitration court to a group of Yukos shareholders, a lawyer for the shareholder group said on Monday.
After that period, interest will start being accrued, said Emmanuel Gaillard, Lead counsel, Shearman and Sterling LLP.......................http://www.voanews.com/content/hague-court-expected-to-rule-for-yukos-shareholders-/1966321.html
28/7/14
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