Court reinstates order for Russia to pay $50 bn over Yukos

A Dutch appeals court has reinstated an international arbitration panel’s order to Russia to pay $50 billion compensation to shareholders in former Russian oil giant Yukos.

Tuesday’s ruling overturned a 2016 decision by The Hague District court that quashed the compensation order on the grounds that the arbitration panel did not have jurisdiction.

The Hague Court of Appeal ruled that the 2016 decision quashing the arbitration decision “was not correct. That means that the arbitration order is in force again.”

A Dutch appeals court is ruling Tuesday on whether to reinstate an international arbitration panel’s order for Russia to pay $50 billion in compensation to shareholders of former Russian oil giant Yukos.

The Hague District Court in 2016 quashed the 2014 compensation order by an international arbitration panel based in the Dutch city, saying the panel did not have jurisdiction because the case was based on an energy treaty that Russia had signed but not ratified.

The arbitration panel had ruled that Moscow seized control of Yukos in 2003 by hammering the company with massive tax claims. The move was seen as an attempt to silence Yukos CEO Mikhail Khodorkovsky, a vocal critic of President Vladimir Putin.

The Yukos shareholders called the Hague court’s decision “fundamentally flawed” and launched an appeal. The Hague Court of Appeal is scheduled to issue a written ruling in the case on Tuesday.

The 2014 arbitration ruling said that Russia was not acting in good faith when it levied the massive claims against Yukos, even though some of the company’s tax arrangements might have been questionable.

The state launched “a full assault on Yukos and its beneficial owners in order to bankrupt Yukos and appropriate its assets while, at the same time, removing Mr. Khodorkovsky from the political arena,” the arbitrators said.

Khodorkovsky was arrested at gunpoint as he boarded a plane in Siberia in 2003 and spent more than a decade in prison as Yukos’ main assets were sold to a state-owned company. Yukos ultimately went bankrupt.

 (AP Photo/Matt Dunham, File)