THE HAGUE, Netherlands (AP) - A key legal adviser to the Dutch Supreme Court on Friday recommended dismissing Russia’s appeal against the reinstatement of a $50 billion compensation award to former shareholders of the Yukos oil company.
The Advocate General’s advisory opinion is an independent recommendation to Supreme Court judges who are deliberating on Russia’s appeal; the judges do not have to follow the advice. No date has been set for the court to issue its final decision.
The advice is the latest development in a long-running legal battle between Moscow and former Yukos shareholders united in a company called GML, which launched arbitration proceedings against Russia in 2005.
Nearly a decade later, the arbitration panel ordered Russia to pay shareholders $50 billion in compensation. A Dutch court - ruling in the case because the arbitration happened in the Netherlands - overturned the order in 2016. It said the arbitration panel did not have jurisdiction because the case was based on an energy treaty that Russia had signed but not ratified.
Later that year, an appeals court in The Hague overturned the lower court’s decision and reinstated the compensation order. Moscow then launched its appeal to the Supreme Court.
GML chief executive Tim Osborne welcomed Friday’s advisory opinion.
“We are confident that the Supreme Court of The Netherlands will likewise uphold the Court of Appeal’s ruling,” he said in a statement.
The arbitration panel concluded in 2014 that Moscow seized control of Yukos in 2003 by financially crippling the company with huge tax claims. The move was seen as an attempt to silence Yukos CEO Mikhail Khodorkovsky, a vocal critic of President Vladimir Putin.
The arbitration ruling said that Russia was not acting in good faith when it levied the massive claims against Yukos, even though some of the company’s tax arrangements might have been questionable.
The state launched “a full assault on Yukos and its beneficial owners in order to bankrupt Yukos and appropriate its assets while, at the same time, removing Mr. Khodorkovsky from the political arena,” the arbitrators said.
Khodorkovsky was arrested at gunpoint in 2003 and spent more than a decade in prison as Yukos’ main assets were sold to a state-owned company. Yukos ultimately went bankrupt.
Please read our comment policy before commenting.