US court supports 1990`s Russian oligarchs

(MENAFN) In a significant development, a United States court has dismissed Russia's sovereign immunity defense in the high-profile Yukos case, allowing for the enforcement of a USD50 billion award to the former shareholders of the defunct energy giant. The ruling, issued by the United States District Court for the District of Columbia, rebuffed Russia's request to declare the dispute outside the jurisdiction of any foreign court.

The Yukos case revolves around the collapse of the energy company in 2006, once owned by former oligarch Mikhail Khodorkovsky, following its failure to pay billions of dollars in back taxes. The court's decision, delivered on November 17 by Judge Beryl Howell, denied Russia's motion, filed in 2015, asserting that the dispute with former Yukos shareholders fell outside foreign court jurisdiction.

With the rejection of Russia's sovereign immunity defense, the case is now poised to proceed to the merits phase, determining whether the USD50 billion award issued in 2014 by the Permanent Court of Arbitration in The Hague should be enforced under the New York Convention.

The decade-long legal battle at the International Court of Arbitration found in 2014 that Moscow had violated international obligations by orchestrating the bankruptcy of Yukos in the early 2000s. The tribunal's ruling ordered Russia to pay USD50 billion in compensation to the former controlling shareholders of Yukos: Hulley Enterprises and Veteran Petroleum in Cyprus and Yukos Universal in the Isle of Man. While the Dutch Supreme Court later overturned the ruling, the recent United States court decision reopens the path for the enforcement of the substantial compensation award.

 

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