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May 8, 2021

Court orders Russia to pay USD 50 bn to Yukos shareholders

Authorities who are representing Russia in this trial will use all possible legal means to defend their position, Russian Foreign Minister Sergey Lavrov said.

A court in the Hague has awarded shareholders in the defunct Russian oil company Yukos the largest compensation package to date. The Court of Arbitration said Russia should pay USD 50 bn (GBP 29.5bn) in damages, BBC informs.
It said Russian officials, under President Putin, had manipulated the legal system to bankrupt Yukos, and jail its boss, Mikhail Khodorkovsky for fraud and tax evasion. Russia’s Foreign Minister said Russia would most likely appeal the decision.
Yukos was once the country’s largest oil producer.
Foreign Minister Sergei Lavrov said: “The Russian side, those agencies which represent Russia in this process, will no doubt use all available legal possibilities to defend its position.” The claim was filed by a subsidiary for the financial holding company GML, once the biggest shareholder in Yukos Oil Co. GML Executive Director Tim Osborne said: “The majority shareholders of Yukos Oil were left without compensation for the loss of their investment when Russia illegally expropriated Yukos.”
“It is a major step forward for the majority shareholders, who have been battling for over 10 years for this decision.” In addition to forcing the company into bankruptcy, Russia also sold Yukos’ assets to state-owned businesses for political purposes, according to the claimant’s lawyer Emmanuel Gaillard. Yukos was disbanded in 2007 after filing for bankruptcy in 2006.
Economic sanctions to be discuss on July 29
The EU Council will discuss economic sanctions against Russia on July 29, European Commission representative Jonathan Todd said on Monday, itar-tass.com informs. They include an arms embargo to limit Russian weapons exports to Europe estimated at EUR 3.2 billion a year and restrictions on trade in dual-purpose goods. The EU summit took a decision on the expansion of blacklist for Russian companies on July 16. At present, the EU blacklist includes 72 names, including Russian politicians and officials, leaders of militia in the Donetsk and Luhansk people’s republics.
The company was formerly controlled by Mikhail Khodorkovsky, who was at one point Russia’s richest man. Responding to the news, Khordorkovsky said it was “fantastic” that shareholders were “being given chance to recover assets”. Khodorkovsky built Yukos into Russia’s largest investor-owned oil company after the fall of the Soviet Union. He was arrested in 2003 and spent ten years in jail after being convicted of fraud and tax evasion but was pardoned last December. The state-owned Rosneft bought the bulk of Yukos assets though auctions after the company was declared bankrupt. It says all the deals were legal.
Aside from restrictions on Russia’s financial sector, the EC document mentions a ban on EU exports of sensitive technologies to Russia to target three areas: deep-sea drilling, Arctic exploration and shale oil extraction.
The new sanctions also include restrictions on trade in and out of Crimean ports.
Rosneft said in a statement yesterday that it is not party to the litigation and that it did not expect to be affected by it. “Rosneft believes that all the deals to purchase former assets of Yukos as well as all its actions regarding Yukos were fully legitimate and were done in line to the legislation at the time,” the company said, quoted by abcnews.go.com. Shares in Rosneft, which is worth USD 65.7 billion, were down 3.6 percent Monday trading in London and 2.7 percent in Moscow.

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