An international court ruled that the Russian government owed the former energy giant Yukos Oil Company 5 billion U.S. dollars in damages because it illegally expropriated its assets and denied justice in Russian courts.
The Yukos Foundation revealed in a statement on Thursday that the company has been awarded a US$5 billion verdict against the Russian state by the Permanent Court of Arbitration in The Hague, the Netherlands. This is the latest setback against Russia in a series of claims made by Yukos and its shareholders regarding the state’s order to dissolve the company.
The foundation said in its ruling statement on July 23: “The court found that Russia had illegally expropriated Yukos Capital’s loan to its former parent company, Yukos Petroleum, and denied its justice in Russian courts.”
In the mid-2000s, the power struggle between President Vladimir Putin and Yukos founder Mikhail Khodorkovsky was one of the decisive events that consolidated Putin’s nearly complete control of the Russian government.
Mr. Khodorkovsky, once considered the richest man in Russia, became a critic of the Kremlin and was sentenced to nearly ten years in jail for alleged fraud and embezzlement of public funds that critics said.
Mr. Khodorkovsky is now in exile, and Mr. Putin has never been politically challenged by the country’s powerful commercial “oligarchs” since.
Yukos Capital applied for compensation for the first time in 2013, demanding 13 billion U.S. dollars from the Russian Federation, which is part of what legal experts call a “second wave” of lawsuits against the Kremlin. Soon after Mr. Khodorkovsky was arrested in October 2003, the Kremlin split and reallocated Yukos Oil Company’s assets. Declared bankruptcy three years later.
The TASS news agency reported on Thursday that the Russian Attorney General’s Office vowed to confront the latest ruling, pointing out that there were differences in the judge’s ruling and denying that the court has the power to decide the case or impose fines.
“The final arbitration decision cannot be considered lawful and well-founded,” a government legal source told the news agency. “The Russian Attorney General’s Office will undoubtedly appeal this decision.”