Russia Gets Partial Win in $50 Billion Case Over Bankrupt Oil Giant

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THE HAGUE, Netherlands—The Dutch Supreme Court connected Friday handed Russia astatine slightest a impermanent triumph successful an entreaty of what’s believed to beryllium the world’s largest grant successful an arbitration lawsuit aft erstwhile shareholders of bankrupted Russian lipid elephantine Yukos accused the Kremlin of taking down the institution to soundlessness its CEO, a fierce professional of President Vladimir Putin.

The determination further extends what already has been a yearslong ineligible conflict betwixt Russia and erstwhile Yukos shareholders. It quashed a little tribunal ruling, efficaciously mounting speech a $50 cardinal grant made to the erstwhile shareholders successful 2014 and sending the lawsuit to different tribunal successful Amsterdam to see Russian claims that the shareholders committed fraud successful the archetypal arbitration hearings.

However, the highest Dutch tribunal rejected the remainder of Russia’s arguments, a determination welcomed by the erstwhile shareholders, who said successful a connection that they “won connected each substantive grounds of Russia’s appeal.”

“We volition survey the Supreme Court ruling, but are assured that the Court of Appeal successful Amsterdam volition disregard the baseless allegations raised by the Russian Federation, and the arbitral awards volition beryllium upheld,” said Tim Osborne, main enforcement of GML, the holding institution of erstwhile Yukos bulk shareholders.

The Russian prosecutor-general’s bureau welcomed the ruling but said “it is regrettable” the precocious tribunal didn’t disregard the grant outright.

“The Russian Federation expects that the Amsterdam Court of Appeal volition construe the remaining arguable issues successful accordance with planetary instrumentality … and instrumentality broad measures to support the rights and morganatic interests of Russian taxpayers,” the bureau said successful a statement.

An planetary sheet of arbitrators concluded successful 2014 that Moscow seized power of Yukos successful 2003 by deliberately crippling the institution with immense taxation claims. The determination was seen arsenic an effort to soundlessness Yukos CEO Mikhail Khodorkovsky, a vocal Putin critic.

Khodorkovsky was arrested astatine gunpoint successful 2003 and spent much than a decennary successful situation arsenic Yukos’ main assets were sold to a state-owned company. Yukos yet went bankrupt.

The authorities launched “a afloat battle connected Yukos and its beneficial owners successful bid to bankrupt Yukos and due its assets while, astatine the aforesaid time, removing Mr. Khodorkovsky from the governmental arena,” the arbitrators said successful their 2014 ruling.

The archetypal lawsuit was handled nether the Permanent Court of Arbitration, which is headquartered successful The Hague. As a result, Russia appealed the arbitration determination successful the Netherlands.

The Dutch Supreme Court ruled Friday that a little appeals tribunal successful The Hague wrongly dismissed—on procedural ground— Russia’s assertion that “shareholders committed fraud successful the arbitral proceedings.”

Sergey Alekhin, a Paris-based lawyer and adept connected planetary arbitration who is not progressive successful the case, said Russia had alleged that “the bulk shareholders of Yukos fraudulently concealed who has the existent ownership oregon power implicit them, truthful they would allegedly taxable mendacious statements.”

“The Court of Appeal successful Amsterdam close present volition person to cautiously analyse the merit, the substance of those superior allegations,” helium added. “Those are truly superior allegations.”

The process—including imaginable further appeals connected the fraud issue—is apt to instrumentality years.

In April, an autarkic advisor to the highest Dutch tribunal had recommended that its judges cull Russia’s entreaty successful full.

Khodorkovsky is not progressive successful the case, which was brought by erstwhile shareholders agreed successful a institution called GML Ltd.

By Mike Corder

The Associated Press


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