Russia hit by US$50 bil. Yukos ruling amid sanctions squeeze
By James Pheby ,AFP
July 29, 2014, 12:01 am TWN
LONDON -- Russia has been ordered to pay Yukos shareholders a record US$50 billion in compensation over its seizure of the defunct oil giant, lawyers said on Monday, in a new blow on top of sanctions over the Ukraine crisis.
An arbitration court in The Hague ruled that Russia forced Yukos — formerly owned by ex-tycoon Mikhail Khodorkovsky — into bankruptcy with excessive tax claims and sold its assets to state-owned businesses led by energy giant Rosneft for political purposes.
Russia was defiant in the face of the judgment with Foreign Minister Sergei Lavrov vowing that the state would “use all of its legal options to defend its position,” with the claimants who now face a further battle to claw back their cash.
Rosneft also stood by its purchases as fully lawful.
Yukos was once Russia's biggest oil company but was broken up after Khodorkovsky was arrested in 2003, shortly after President Vladimir Putin warned Russia's growing class of oligarchs against meddling in politics.
Tim Osborne, executive director of GML Ltd., the main shareholder and claimant in the case, told a news conference in London that the tribunal “unanimously confirmed that the attacks by the Russian Federation on the Yukos oil company ... were politically motivated.”
The award was the “largest in arbitration history,” GML said in a statement.
Osborne said the ruling would hurt investment in Russia, which is already in the spotlight over the escalating crisis in Ukraine, while companies close to Vladimir Putin's regime are braced for tougher sanctions.
“I suspect at the moment Russia is a place where not many people are going to be investing,” Osborne told the press conference.
Khodorkovsky — who is no longer a shareholder and is not a party to the legal proceedings — praised the verdict and slammed Russian leaders.