Dutch court backs $50 billion Yukos shareholder claim against Kremlin | News | DW | 18.02.2020
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Dutch court backs $50 billion Yukos shareholder claim against Kremlin

The Permanent Court of Arbitration has upheld an appeal by investors demanding billions of dollars in compensation from the Russian state for bankrupting the Yukos oil company. The Kremlin is contesting the decision.

A Dutch appeals court overturned the annulment of a $50 billion (€46 billion) award to shareholders on Tuesday in the now defunct Russian oil giant Yukos, more than a decade after its assets came under the control of the Kremlin.

The original decision by the Hague-based Permanent Court of Arbitration was much like Tuesday's ruling but this was then overturned, in favor of the Kremlin. And now, once again, the Appeals Court in The Hague have come down on the side of the shareholders, reverting back to its original decision that would have awarded shareholders billions of dollars after Yukos Oil went bankrupt in 2006.

This insolvency occured after Yukos' former owner, Mikhail Khodorkovsky, who currently lives in exile in London, fell out with President Vladimir Putin and the Russian government began demanding billions of dollars in tax claims that ultimately resulted in the oil company being expropriated by the state.

MiKhail Khodorkovski (picture-alliance/AP Photo/M. Dunham)

Russian opposition figure Mikhail Khodorkovsky, the former owner of the Yukos Oil Company that was put out of business in 2006

"The Appeals Court in The Hague decided today that a previous ruling in favor of the Russian Federation was incorrect," the court said in a statement, adding the original $50 billion awarded "is in force again."

Andrej Kondakow, head of the Russian International Center for Legal Protection (ICLP), which represents the interests of Russia during the trial, said the ruling was "surprising." He told DW that the government was "disappointed that the court did not take into account the perfectly clear arguments of the Russian Federation."

Jonathan Hill, a spokesman for Group Menatep Limited (GML), which represents former Yukos majority shareholders, told DW: "The most important thing about today's ruling is that it reinstates in full the award of 2014. We were very confident in our legal arguments and we were very confident that in the end truth and rule of law will win the day."

The Kremlin was quick to respond to the Dutch court ruling by saying it would appeal as Andrej Kondakow confirmed: "We will continue to defend our interests and will of course appeal to the Supreme Court of the Netherlands in good time - we have three months to do so."

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— Irina Filatova contributed to this report

jsi/ng (dpa, AFP, Reuters)

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