LONDON, March 2 (Reuters) - Former Yukos investors can seek to enforce an arbitration award against Russia now worth more than $65 billion over the seizure of the defunct oil group, London's High
Ex-Yukos investors can enforce $65 billion arbitration award against Russia in UK, court rules
UK Court Decision and Background of Yukos Arbitration Case
High Court Ruling on Enforcement
LONDON, March 2 (Reuters) - Former Yukos investors can seek to enforce an arbitration award against Russia now worth more than $65 billion over the seizure of the defunct oil group, London's High Court ruled on Monday.
Background: The Yukos Arbitration Award
The Hague Tribunal and Initial Award
Three former Yukos shareholders – Hulley Enterprises, Yukos Universal and Veteran Petroleum – were awarded just over $50 billion by an arbitration tribunal in The Hague in 2014, which found Russia expropriated Yukos after its former owner Mikhail Khodorkovsky was jailed.
International Legal Battles
They have since fought legal battles over the award, which has swelled with interest to more than $65 billion - in Britain, the U.S. and the Netherlands – where the Dutch Supreme Court last year rejected Russia's appeal to overturn the award.
Russia's Legal Arguments and Court Response
Jurisdiction Dispute
In London, Russia has argued it did not agree to submit to the jurisdiction of the arbitration, an argument which was rejected in November 2023 and again on appeal last February.
Following a hearing in January, the High Court ruled that the arbitration award should be recognised and that the investors could seek to enforce it in England.
Allegations of Fraud and Court's Rejection
Russia had argued that the awards should not be recognised or enforced, in part because of alleged fraud on the part of Yukos' previous ultimate owners.
But Judge Robert Bright said in his ruling on Monday: "The moral failings that the Russian Federation has alleged ... are simply incapable of affording any defence."
The Russian embassy in London did not immediately respond to a request for comment.
Recovery Efforts and Challenges
Yukos Collapse and Khodorkovsky's Imprisonment
LESS THAN $2 MILLION RECOVERED SO FAR
Yukos collapsed in 2006 after oil tycoon Khodorkovsky fell out with Putin and the government began demanding billions of dollars in alleged back taxes that resulted in Yukos ultimately being seized by the state.
The exiled billionaire spent 10 years in prison in Russia after being convicted of tax evasion and fraud, charges he denied, and now lives in London. He is not a party to the case.
Enforcement Process and Asset Recovery
Tim Osborne, CEO of the GML shareholder group which previously held a majority stake in Yukos through its subsidiaries, said in a statement that the claimants would now move forward to enforce the awards "against commercial assets of the Russian Federation located in England and Wales".
But that process is likely to take several years, with Russia initially expected to appeal against Monday's ruling.
The former investors have so far recovered just 1.6 million euros ($1.88 million) by auctioning 18 Russian vodka brands, including Stolichnaya and Moskovskaya.
($1 = 0.8516 euros)
Reporting Credits
(Reporting by Sam Tobin; Editing by Sarah Young and Emelia Sithole-Matarise)
