Europe
3:13 pm
Mon July 28, 2014

International Court Rules Against Russia In $50 Billion Decision

Originally published on Mon July 28, 2014 6:40 pm

Russia says it will appeal an unfavorable decision by a court in The Hague. The Permanent Court of Arbitration awarded $50 billion to shareholders of the defunct Yukos oil company. Russia seized the company in 2003 and put owner Mikhail Khodorkovsky in jail on tax and fraud charges.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

One decade ago, the Russian government seized the massive oil company Yukos. Today, an international tribunal called that seizure illegal, and it ordered Russia to pay $50 billion to shareholders with the now defunct company. But as NPR's Jim Zarroli reports, it's not clear when or if Yukos shareholders will get any money.

JIM ZARROLI, BYLINE: When Russia took over Yukos in 2003, the move was widely seen as payback against the company's politically ambitious majority shareholder Mikhail Khodorkovsky by President Vladimir Putin. Khodorkovsky went on to spend a decade in prison, and his company's assets were sold to a state-owned firm. Today, the three-judge permanent Court of Arbitration in the Hague called the seizure "a devious and calculated expropriation." Tim Osborne is executive director of GML Limited, which represented shareholders.

TIM OSBORNE: I think it is a victory for the rule of law against the politically motivated and politically controlled courts in Russia.

ZARROLI: GML had asked for an award of more than a hundred billion dollars. The tribunal gave it only half that, but is still, by far, the biggest award in the tribunal's history. Richard Sakwa is a professor of Russian and European politics at the University of Kent in England.

RICHARD SAKWA: It's a major event, a major event.

ZARROLI: Sakwa says, even if Russia were willing to pay, it's not clear how easy it would be to raise the money. The company that acquired Yukos' assets is having financial troubles. And the Russian government is under growing on economic pressure because of international sactions over its conduct in Ukraine.

SAKWA: At the moment, Russia is taking it fairly calmly. They're going to go to appeal, but clearly this is just another thing which adds to Putin's woes at this time.

ZARROLI: If Russia refuses to pay the award, shareholders can try to seize some of the country's assets wherever they can find them, but doing so can be a long and complex legal process. As for Khodorkovsky, he was released from prison last year and now lives in Switzerland. He was not involved in the suit, but he released a statement saying, the ruling should make a strong impression on Putin. And he added, "I'm very happy today." Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.