The Supreme Court of the Netherlands sided with Moscow in a high-profile legal dispute
The Supreme Court of the Netherlands overturned the decision in the case of the ex-shareholders of Yukos, which demanded compensation from Russia in the amount of $ 50 billion. Taking into account the interest that came up, according to the plaintiffs, the total amount they wanted to receive from Moscow reached $ 60 billion. Now the case is being returned for a second a very unclear perspective.
The Supreme Court of the Netherlands overturned the decision of the International Arbitration Court, which in the summer of 2014 awarded the former largest shareholders of Yukos compensation in the amount of more than $ 50 billion, plus interest payments, which have since accumulated about $ 10 billion. The verdict says that the court ruled in favor of Russia and canceled the decision to pay compensation to three former major shareholders of the oil company – Leonid Nevzlin, Mikhail Brudno and Vladimir Dubov.
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 make a decision on the merits. Consequently, the decisions of the court in The Hague cannot remain in force. It is noted that the case has now been transferred to the Amsterdam Court of Appeal for hearing and re-assessment on the relevant issue.
Let us remind you that the former shareholders of YUKOS filed a lawsuit with the International Arbitration Court in The Hague back in 2005. Initially, the court sided with them and ordered Russia to pay them $ 50 billion. The decision was overturned by the District Court of The Hague, but then Themis’ pendulum swung in the other direction.
The Supreme Court upheld one of the points of Russia’s cassation appeal, rejecting the rest of the objections, including those concerning the non-jurisdiction of this case to the Hague Arbitration Court. But the highest court in the Netherlands considered that, for procedural reasons, the Hague Court of Appeal erroneously ignored the Russian Federation’s argument that Yukos shareholders had allegedly committed fraud in the arbitration procedure, and therefore did not make a decision on the merits. Now it is up to the Amsterdam Court of Appeal.
However, in whatever direction the European Themis is inclined, the ex-shareholders of YUKOS cannot expect to receive at least some money, since Moscow does not intend to comply with the verdicts of international arbitration. Its official position remains unchanged: the arbitration courts in The Hague or in Amsterdam are not authorized to consider this dispute, since the Energy Charter, on which the claim is based, has not been ratified by Russia. And YUKOS shareholders are not foreign investors, but Russian citizens who used shell companies to own shares. The Russian side also claims that at the stage of the arbitration, a witness on the part of the plaintiffs Andrei Illarionov (ex-adviser to President Vladimir Putin, now an ardent critic of the Russian political regime) received a “secret” donation from former Yukos shareholders in exchange for testimony that was beneficial to them. Such abuses contradict the public order of the Netherlands, the Russian side believes.
Note that in December 2020, the Constitutional Court of the Russian Federation actually closed the topic, allowing the government not to pay compensation in the Yukos case. Of course, Russia will not pay anything, especially since we are talking about amounts in the amount of war reparations. The decisions of the courts in Amsterdam and The Hague are by definition not binding in our country, and the bankruptcy of Yukos was carried out strictly within the framework of domestic laws, says financial analyst Alexander Razuvaev.
“The story has long been played out, all attempts to revive it will end in nothing for the plaintiffs,” said Sergey Drozdov, an independent expert on the financial market. – Russia adheres to the same practice as the United States and European countries, for which national legal norms are an absolute and unconditional priority. All events related to the Russian company YUKOS took place on the territory of the Russian Federation ”.
Moscow’s litigation with the former structures of YUKOS can be interpreted as a story that does not fall under the norms of international law, but is regulated by domestic legislation, agrees the investment strategist of Arikapital Management Company Sergei Suverov. Therefore, Russia is likely to ignore the decision of the Dutch courts, and without serious legal and political consequences for itself.
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