- Yukos Shareholders wish to recover $50 billion from the Russian government.
- The judge expects joint submissions from both sides by May 2021.
- Ex Yukos Shareholders vs Russia case has been on going for close to 10 years.
Russia was granted a trial suspension in the US District of Columbia Federal Court on November 20th. The request was filed by Russia In September on the grounds of the former shareholders of Yukos failed to mitigate the reasons to continue these proceedings in the US court.
The petition also states, it is necessary to postpone the proceedings due to the fact that the main case that the court in the United States takes into account continues to be considered in the Supreme Court of Netherlands. Hence, the trial was put over until November 18, 2022.
The trial is pertaining ex Yukos Shareholders wishing to recover $50 billion from the Russian government. OJSC “Yukos Oil Company” was an oil and gas company based in Moscow, Russia.
Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovsky’s Bank Menatep during the controversial “loans for shares” auctions of the mid 1990s. It should be noted, there is a parallel appeal in the Supreme Court in Netherlands.
The Supreme Court of the Netherlands, officially the High Council of the Netherlands, is the final court of appeal in civil, criminal and tax cases in the Netherlands, including Curaçao, Sint Maarten and Aruba. The Court was established on 1 October 1838 and is located in The Hague.
Furthermore, the presiding US judge ruled that a number of requests from Russia, including the request of discontinuance of the proceedings “for lack of substantive jurisdiction” to be postponed.
Due to the Coronavirus pandemic and difficulties continuing with the case the judge allowed to postpone the case and not based purely on the Russian government petition. Currently, thee are over 12 million infected and 254,000 deaths in the USA.
In Russia there over 2 million infected and over 35,000 dead from Covid-19. It should be noted, Russia Coronavirus numbers could be inaccurate, as the Kremlin has been accused of intentional manipulations with the data.
However, the judge instructed plaintiff and defense council from the both sides to submit joint reports regarding the development in the Hague court. The first submission is expected by the May 20, 2021 and every 6 months thereafter. The reason behind such measure is it is plausible for the case to be finalized in the Supreme Court of Netherlands.
Moreover, this case had many motions filed already by the Russian government. The previous motion was filed in June of this year arguing there is no basis to continue with the case. The case has been in status quo since 2016.
The appeal stems from the ruling in the Hague Court of Arbitration for Russia to pay over $50 billion US dollars to the ex Yukos shareholders. The judges found that Russia’s actions against Yukos violated the Energy Charter Treaty, which the country signed but did not ratify.
The Russian side appealed to the fact that certain provisions of the document could not be applied to it without completing the ratification procedure.
The Energy Charter Treaty is an international investment agreement that establishes a multilateral framework for cross-border cooperation in the energy industry. The treaty covers all aspects of commercial energy activities including trade, transit, investments and energy efficiency.
The Hague Court of Arbitration ruling was appealed by Russia. The appeal was successful for Russia and The Hague District Court ruling made the Court of Arbitration decision invalid.
The decision was challenged by the ex-Yukos shareholders in the Hague Court of Appeal in February 2020, which sides with the shareholders against Russia and upheld the initial ruling and the quantum awarded. Thereafter, Russia filed an appeal in the Supreme Court of Netherlands.
Overall, the case is not over. It is highly likely, the ex-Yukos shareholders will never see any payouts from the Kremlin. Lastly, Yukos was not an honest entity and in 1990s. At that time, the thefts of the government properties and resources was rampant. The collapse of the Soviet Union in the 1991, allowed for such scenario to occur.