THE HAGUE: Dutch court on Tuesday upheld an appeal by shareholders of the dismantled oil giant Yukos in a landmark ruling, boosting their fight in a $50 billion case for compensation.
The ruling overturns a lower Dutch court’s decision in favour of Russia, which had contested an original decision by the Hague-based Permanent Court of Arbitration that awarded shareholders billions of dollars after Yukos was dismantled in the mid-2000s.
“The Appeals Court in The Hague decided today that a previous ruling in favour of the Russian Federation was incorrect,” the court said in a statement, adding an original $50 billion award by the PCA — an international arbitral tribunal — “is in force again”.
The long-awaited ruling comes almost 14 years after the once powerful company filed for bankruptcy and follows a controversial 2014 ruling that ordered Russia to pay out billions of dollars in compensation to its former shareholders.
The PCA that year ruled that Russia had forced Yukos into bankruptcy with excessive tax claims and then sold off its assets to state-owned companies.
It based its ruling on the provisions of a multilateral 1994 accord, the Energy Charter Treaty, which aimed to promote energy security.
It then ordered Moscow to pay more than $50 billion to the former shareholders — a record award for the arbitration tribunal.
In a shock turnaround a local Dutch court in 2016 annulled the PCA’s decision, saying it was “not competent” to rule in the case, based on the treaty.
But appeals judges disagreed with the lower court’s findings, saying “Russia was under an obligation to enforce the treaty unless it was in breach of Russia law.” “This court finds that there was no breach of Russian law.” Yukos’ main shareholder GML hailed the ruling.
“This is a victory for the rule of law. The independent courts of a democracy have shown their integrity and served justice, “ chief executive Tim Osborne said
— Reuters
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