Published by Global Banking and Finance Review
Posted on February 12, 2025
LONDON (Reuters) - Russia cannot claim state immunity to avoid the enforcement of a $60 billion arbitration award over its seizure of defunct oil group Yukos, a London court ruled on Wednesday.
Three former Yukos shareholders – Hulley Enterprises, Yukos Universal and Veteran Petroleum – have been fighting to enforce the 2014 award for over a decade with limited success.
The companies were awarded just over $50 billion by an arbitration tribunal in The Hague in 2014, which found Russia carried out a "devious and calculated expropriation" of Yukos after its former owner Mikhail Khodorkovsky was jailed.
They have since attempted to enforce the award, which has swelled with interest to nearly $60 billion, in Britain, the U.S. and the Netherlands – where a court last year dismissed Russia's latest appeal, though that decision is under appeal.
In the London leg of the legal battle, Russia has argued it did not agree to submit to the jurisdiction of the arbitration, an argument which was rejected in November 2023.
The Court of Appeal dismissed Russia's appeal against that decision on Wednesday, though it will likely require several more years of legal battles before any money might be paid.
"We are closing on to the moment when (President Vladimir) Putin's Russia will have to pay in full for its illegal actions," Tim Osborne, CEO of the GML shareholder group which previously held a majority stake in Yukos through its subsidiaries, said.
The Russian embassy in London did not immediately respond to a request for comment.
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.
Exiled billionaire Khodorkovsky spent 10 years in prison after being convicted of tax evasion and fraud, charges he denied, and now lives in London. He is not a party to the case.
(Reporting by Sam Tobin; Editing by Sachin Ravikumar)
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