Dutch court refuses to recognize Russian judgment on Yukos bankruptcy

18 Jan 19

The judges of the Dutch Supreme Court refused Friday to recognize the Russian judgment by the Yukos oil company was declared bankrupt in 2006, confirming a previous decision in this case.

Led by the oligarch and declared enemy of the Kremlin Mikhail Khodorkovsky, arrested in 2003, the Yukos company was accused by Moscow of tax evasion and large-scale fraud a decade ago. After a resounding trial, Yukos was placed in liquidation in 2006.

Much of this business, sold by sub-fund, was purchased by the Russian public oil group Rosneft. The former shareholders have been trying since to obtain compensation for their losses caused by the dissolution of Yukos.

The Dutch Supreme Court, however, announced on Friday “in a final judgment that the 2006 Russian judgment declaring Yukos bankrupt will not be recognized in the Netherlands”. The judges upheld a judgment of the Amsterdam Court of Appeals in May 2017, according to which “the Russian authorities caused Yukos Oil,” the former leading oil company in Russia, to go bankrupt. For the Supreme Court, recognition of the Russian bankruptcy judgment is “inconsistent with Dutch public policy” and therefore has “no legal effect”.

One of the main consequences of this decision is that the Netherlands has not recognized the authority of the Yukos liquidator to transfer the shares held by a Dutch subsidiary to the Russian company Promneftstroy, the judges explained. Promneftstroy, who had paid 307 million dollars (222 million euros) at the time, “did not become the owner of the shares of Yukos Finance,” they considered.

Russia, accused by former shareholders of orchestrating the dismantling of Yukos for political reasons, was sentenced in July 2014 by the Permanent Court of Arbitration (PCA). The international court, located in The Hague, ordered Moscow to pay compensation of 50 billion dollars (47.2 billion euros) to the plaintiffs, an amount that Russia refused to pay. Judging that the CPA did not have the necessary jurisdiction to grant this compensation, a Dutch court annulled the decision of the Court in 2016. The complainants appealed.

Click here to read the original article in French.

DISCLAIMER: The English version is a translation from the French original AFP article and is for information purposes only. In case of a discrepancy, the French original will prevail.