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UPDATE: Court Orders Russia To Pay 50 Billion Dollars To Yukos Shareholders

July 28, 2014

Moscow/London (Alliance News) - An international court in The Hague on Monday ordered Russia to pay a record 50 billion dollars in compensation to the former shareholders of the dismantled oil company Yukos.

The Permanent Court of Arbitration ruled that Russia's dissolution of Yukos, once the country's largest oil company, was politically motivated and that the shareholders were illegally expropriated.

Foreign Minister Sergei Lavrov said Russia would appeal the verdict.

Yukos was dissolved by the government after its chief executive, Mikhail Khodorkovsky, a Kremlin critic, was jailed for tax evasion. Khodorkovsky spent nine years in prison before being pardoned last year by President Vladimir Putin.

The shareholders initially demanded 100 billion dollars in compensation, charging that the Kremlin intentionally obliterated the company using artificially-inflated tax claims.

Many of the company's assets went to state-owned oil company Rosneft.

Reacting to Monday's ruling Rosneft declared that all of its acquisitions were legal, Russia's Itar-Tass news agency reported.

Khodorkovsky, who lodged several appeals at the European Court of Human Rights during his imprisonment, was not part of the case in The Hague. He sold his shares in Yukos in 2005.

In a statement on his website he expressed "satisfaction" at the judgement.

"The findings were predictable for any unbiased observer of the disgraceful Basmannyi (Moscow district court) travesty of justice: from beginning to end, the Yukos case has been an instance of unabashed plundering of a successful company by a mafia with links to the state," he said.

His only regret, Khodorkovsky said, was that the 50 billion dollars would have to come from government coffers and "not from the pockets of mafiosi linked to the powers that be and those of Putin's oligarchs."

The claim was brought by the financial holding company GML, formerly the biggest shareholder in Yukos.

GML's executive director Tim Osborne called it "a major step forward for the majority shareholders" of Yukos, after a decade-long battle for justice.

Both sides can appeal the ruling in a Dutch court.

The plaintiffs' lawyer Emmanuel Gaillard said the claimants were confident they would receive their money.

"We have no reason to believe that Russia will not fulfill its international obligations," Gaillard said.

The decision could further harm the Russian economy, which is already plagued by recession and by EU and US sanctions prompted by the conflict in the Ukraine.

The award represents more than 10% of Russian currency reserves.

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Source: Alliance News

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