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InternationalUS court rejects multibillion-dollar claim of ex-Yukos shareholders against Russia

US court rejects multibillion-dollar claim of ex-Yukos shareholders against Russia

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Gaston de Persigny
Gaston de Persigny
Gaston de Persigny - Reporter at The European Times News

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The US Court of Appeal ruled on the claim of the ex-shareholders of the Yukos oil company. This was reported by RIA Novosti with reference to the court ruling.

Ex-shareholders of Yukos demand $ 50 billion from Russia

The judicial authority decided to reject the claim: the appeal granted the petition of the defendant, represented by Russia, and rejected the petition of the former shareholders of the company to review the decision of the lower court, which suspended the case. “The petition was granted, the case was closed,” the resolution says.

Earlier, Russia asked a court in the US District of Columbia not to reopen the case on payment of compensation to former Yukos shareholders until the end of the proceedings in the Netherlands. Thus, Moscow, in response to a petition to reopen the process, noted that the suspension of proceedings in this case is appropriate and fully justified, since further proceedings may be fruitless if Russia wins a final victory in Holland or any further appeals to the Supreme Court of the Netherlands.

Confusing process

In early November, the Dutch Supreme Court overturned Russia’s payment of more than fifty billion dollars to former Yukos shareholders and ordered it to be reconsidered. The court’s website notes that the body ruled in favor of Russia and canceled the order to pay compensation to three former major shareholders of the oil company.

The explanatory note states that, for procedural reasons, the Hague Court of Appeal erroneously ignored Russia’s argument that the shareholders allegedly committed fraud in the arbitration procedure and therefore did not issue a decision on the merits. Consequently, the decisions of the Court of Appeal cannot remain in force. Thus, the Supreme Court of the Netherlands overturned the decision of the judicial authority, which sided with the shareholders.

Former shareholders of Yukos filed a lawsuit in the International Arbitration Court in The Hague back in 2005. Initially, the court sided with them and in 2014 ordered Russia to pay them $ 50 billion. The decision was overturned by the District Court of The Hague in 2016, but then the appeal court in February 2020 sided with the shareholders.

Russian side

In 2020, the Deputy Minister of Justice and the country’s representative at the European Court of Human Rights (ECHR) Mikhail Galperin spoke about Russia’s approach to this issue. According to him, Moscow’s position in the case against the former owners of the oil company has been confirmed by serious arguments and “a lot of evidence.”

In particular, the plaintiffs have repeatedly committed financial crimes at home: they did not pay taxes and illegally withdrawn capital, and therefore cannot be considered bona fide investors, and do not fall under the treaty to the EU Energy Charter. Moscow also points out that the foreign legal entities involved in the process are actually controlled by former Russian oligarchs, which means that they cannot be considered foreign investors at all.

In the same year, the Russian Constitutional Court (CC) allowed the former Yukos shareholders to defy payment of $ 57 billion by the decision of the Hague Court of Appeal.

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