An appeals court in the Netherlands is expected to rule on a landmark case on February 18 involving defunct Russian oil company Yukos, whose former shareholders are seeking $50 billion in damages from the Russian state.
The case stems from a controversial 2014 ruling by the Permanent Court of Arbitration (PCA) in The Hague that awarded a record of more than $50 billion in compensation to the oil giant’s former shareholders, including exiled Russian tycoon Mikhail Khodorkovsky.
However, two years later a local Dutch court reversed the PCA’s decision, saying it was “not competent” to rule in the case.
The much-anticipated ruling comes almost 14 years after one of Russia’s largest companies filed for bankruptcy.
Yukos was founded and run by Khodorkovsky, who was convicted of financial crimes in Russia.
Khodorkovsky and his supporters said the charges against him were engineered by the Kremlin to punish him for challenging President Vladimir Putin.
His majority-owned company subsequently was dismantled and absorbed by state-owned Rosneft — then a tiny company in 2004 when the process started.
Initially, the PCA ruled that Russia had forced Yukos into bankruptcy with exorbitant tax claims and then sold off its assets in opaque auctions between 2004 and 2006.
The arbitration court based its ruling on the Energy Charter Treaty, but the Dutch court that overturned the 2014 ruling stated that as a signatory Russia had never ratified the charter, thus the PCA’s decisions were “contrary to Russian law.”
Additionally, the February 18 ruling can still be challenged in the Dutch Supreme Court.
After his arrest in 2003, Khodorkovsky spent a decade in prison before being pardoned by Putin and flown out of Russia.
His business partner, Platon Lebedev, spent more than 10 years in prison and was freed on January 24, 2014.
The European Court of Human Rights (ECHR) has ruled that Khodorkovsky and Lebedev were denied their right to a fair trial in the case of their conviction for embezzlement and money laundering.
The Strasbourg-based court said on January 14 that it did not find any political motives in the criminal prosecution of Lebedev or Khodorkovsky, still one of Putin‘s main opponents, and that no compensation would be awarded.