Russia faces potential $50 billion payout in Yukos case, despite appeal loss
The case has been ongoing for nearly two decades, but Bloomberg suggests it's unlikely that the most recent verdict will result in an immediate compensation payout to former Yukos shareholders. Previously, Yukos was Russia's largest oil company, with domestic and international shareholders.
10:54 AM EST, February 20, 2024
The Hague court ordered Russia to pay shareholders $50 billion in compensation in 2014. Moscow attempted to dispute the arbitration rulings and request their cancellation.
"Russia has previously stated that it is not obliged to pay what is the largest amount in arbitration history," Bloomberg reports.
Arbitration proceedings were initiated in 2005 by the three primary shareholders of Yukos - Veteran Petroleum Ltd., Yukos Universal Ltd., and Hulley Enterprises Ltd.
"The owners of the now-defunct Yukos Oil claimed that Russia was motivated by political considerations when imposing numerous tax demands that ultimately forced the company into bankruptcy. State-owned Rosneft PJSC then took over most of Yukos' assets," Bloomberg adds.
Arrest of Khodorkovsky
Over 20 years ago, Mikhail Khodorkovsky, once considered the wealthiest man in Russia, was a co-owner of Yukos. The seizure of Yukos took place during the early presidency of Vladimir Putin.
The Hague Tribunal determined that the oil conglomerate overseen by Khodorkovsky was destroyed for political reasons, much like how Khodorkovsky ended up in a punitive camp after antagonizing the Kremlin-affiliated political elites. He was pardoned by Putin in 2013 and subsequently released. The entrepreneur then left Russia.
