Russia Forced to Pay USD 50 B to Former Yukos Owners

World | July 28, 2014, Monday // 11:46
Bulgaria: Russia Forced to Pay USD 50 B to Former Yukos Owners Mikhail Khodorkovsky, the former Yukos CEO who was sentenced to 9 years in jail in 2005 but was freed in 2013, was not among shareholders who started the arbitration. Photo by EPA/BGNES

A Hague-based court of arbitration ruled Monday that former majority shareholders of once-thriving oil concern Yukos should be awarded USD 50 B of damages.

According to the Permanent Court of Arbitration in The Hague, Moscow is to pay nearly half of the sum claimed by former owners, the Financial Times reported.

The three-member panel described Russian actions against Yukos in mid-2000s as "illegal" expropriation.

Yukos was the oil giant of Mikhail Khodorkovsky, who was Russia's richest man at that time.

While many describe him as an "oligarch", others criticize Russian President Vladimir Putin for having committed an infringement on his company to deal with potential opponents and also with Khodorkovsky's huge-scale private initiative in the energy sector.

Khodorkovsky was arrested in 2003 and sentenced in 2005 to nine years of imprisonment, but was pardoned by Putin and released in November last year.

The former Yukos CEO and largest shareholder did not take part in the owners' claim lodged by the former Yukos holding company GML, and Leonid Nezvlin, a former associate to Khodorkovsky, will be the biggest single beneficiary.

Russia is expected to appeal, and Yukos' former chief legal counselor Dmitry Gololobov was quoted by Bloomberg as saying the country could hire the best international lawyers, which would extend "the affair" by another ten years.

The ruling comes amid proposals for a fresh round of Western sanctions against Russia over the situation in Eastern Ukraine and Moscow's alleged support for armed rebels in the Donbass region.

Russian media outlets had reported before the court sitting that the decision would favour shareholders.

Daily Kommersant had revealed the ruling would involve less than 50% of the USD 114 B sought.

The European Court of Human Rights in Strasbourg is also due to have a say later this week.

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Tags: Permanent Court of Arbitration, Yukos, Russia, Mikhail Khodorkovsky, GML, Leonid Nevzlin, Vladimir Putin, Dmitry Gololobov

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