Dutch Court Orders Russia to Pay $50bn over Yukos Downfall
A Dutch court of appeals reinstated on February 18 a 2014 arbitration ruling requiring the Russian government to pay $50bn in compensation for breaking up Russia's former largest oil company Yukos.
Yukos was presented with $27bn in back-tax claims in 2003, and in the subsequent three years the company was dismantled and eventually declared bankrupt. Its former owner Mikhail Khodorkovsky was also jailed on charges of fraud in a case widely seen as politically motivated. He was released in December 2013.
Yukos' shareholders took the case to the Permanent Court of Arbitration in the Hague, which in 2014 ruled that Russia had expropriated the company's assets. This ruling was overturned in 2016 by the District Court of the Hague, however, which argued that the arbitration tribunal lacked jurisdiction as Russia had not ratified the 1994 Energy Charter Treaty.
The Hague Court of Appeal said however that Russia was still obliged to adhere to the treaty even if it was not ratified "unless it was in breach of Russian law," which the court said was not the case. The arbitration order is therefore in force again.
"This is a victory for the rule of law," GML, a company consisting of former Yukos shareholders, commented on the ruling. "The independent courts of a democracy have shown their integrity and served justice. A brutal kleptocracy has been held to account."
Russia's justice ministry has announced it will appeal the decision, meaning the case will head to The Netherlands' supreme court.
Many of Yukos' assets ended up in the hands of Russia's largely state-owned Rosneft, which went on to expand further through the $55bn takeover of Anglo-Russian venture TNK-BP in 2013 and the $5.3bn purchase of Bashneft in 2016.