Amsterdam Court: Russia must pay 50 billion dollars for unlawful expropriation of oil company Yukos

Are the long-running lawsuits between Russia and the shareholders of the oil company Yukos in the Netherlands finally over? Since the bankruptcy of oligarch Mikhail Khodorkovsky’s oil company in 2005, numerous lawsuits have been filed in the Netherlands. On Tuesday, the Court of Appeal in Amsterdam decided that Russia must pay three former shareholders $50 billion in damages, as decided in 2014 by the Permanent Court of Arbitration in The Hague.

The Amsterdam court has rejected the latest Russian objections after the case was referred back by the Supreme Court. In 2021, the Supreme Court in a cassation filed by Russia rejected all but one objection. In a last-ditch effort, Moscow then accused the former shareholders of fraud during the arbitration.

In Tuesday’s ruling, the Amsterdam Court of Appeal rejected this accusation because it was made too late. The Court also states that even if the documents on which Russia relies had been submitted earlier in the proceedings, the arbitrators would not have reached a different decision in 2014.

Political rival

Yukos’ three shareholders – Veteran Petroleum, Yukos Universal and Hulley Enterprises – initiated the arbitration proceedings after Yukos went bankrupt in 2005 due to skyrocketing tax bills and was subsequently nationalized. They have since claimed that the oil company was imposed those attacks for political reasons with the aim of bankrupting the oil company of the then richest man in Russia.

During that period, CEO Khodorkovsky was considered a political rival of Vladimir Putin. Khodorkovsky was arrested in 2003 and served ten years in a Siberian prison camp on charges of fraud and tax evasion. After the expropriation, most of Yukos’ assets ended up in the hands of the Russian state oil company Rosneft.

The question is whether shareholders will receive that 50 billion quickly. Russia has previously said that it does not consider itself bound by the arbitration award. In a statement, Chairman Tim Osborne of GML, the company that represents the three majority shareholders, said that they will now fully focus “on the ongoing procedures to seize Russian state assets in the Netherlands, England and America, and we do not rule out that we will also initiate seizure proceedings in other countries.”

This month they achieved their first success, after the British judge granted a claim on a piece of land in the expensive London district of Kensington, which the Russian government had bought in 2006 for 8 million pounds. Khodorkovsky, who now lives in London, is not himself a party to these lawsuits.