An international tribunal has ruled that the Russian government owes onetime energy giant Yukos Oil $5 billion in compensation for illegally expropriating its assets and denying it justice in Russian courts.
The Yukos Foundation revealed Thursday in a statement the company had been awarded a $5 billion judgment against the Russian state by the Permanent Court of Arbitration in The Hague, Netherlands. It’s the latest setback for Russia in a series of claims from Yukos and its shareholders over the state-ordered dismantling of the company.
“The tribunal found that Russia illegally expropriated Yukos Capital’s loans to its former parent company Yukos Oil and denied it justice in the Russian courts,” the foundation statement said of the ruling handed down July 23.
The power struggle between President Vladimir Putin and Yukos founder Mikhail Khodorkovsky in the mid-2000s was one of the defining events in cementing Mr. Putin’s near-total control of the Russian government.
Mr. Khodorkovsky, once considered Russia’s richest man, became a critic of the Kremlin and served nearly a decade in jail on what critics said were trumped-up charges of fraud and embezzlement.
Mr. Khodorkovsky now lives in exile, and Mr. Putin has never been challenged politically since by the country’s powerful business “oligarchs.”
Yukos Capital first applied for compensation in 2013, demanding $13 billion from the Russian Federation, part of what legal experts say is a “second wave” of lawsuits targeting the Kremlin. Yukos Oil was broken up and its assets redistributed by the Kremlin shortly after Mr. Khodorkovsky’s October 2003 arrest. It declared bankruptcy three years later.
The TASS news service reported Thursday that Russia’s General Prosecutor’s Office has vowed to fight the latest award, noting divisions in the judges’ ruling and denying the tribunal had the jurisdiction to decide the case or levy the fine.
“The final arbitral decision cannot be considered to be legal and grounded,” a government legal source told the news service. “The Russian Prosecutor General’s Office will, without fail, appeal this decision.”