Yukos Bankruptcy in Russia was illegal

21 Jan 19

The Supreme Court of the Netherlands has set a point for more than a decade in the protracted litigation of former Russian oil company Yukos, with the Russian authorities over its property abroad, which was controlled by Yukos Finance, a subsidiary of Yukos, registered in the Netherlands, writes Deutsche Welle.

The State Council of the Supreme Court, the Dutch State Council, declared that the Yukos bankruptcy proceedings in Russia were in violation of the fundamental principles of law, and that the decision of the Moscow Arbitration Court to declare Yukos bankrupt in 2006 cannot be recognized in the Dutch legal system.

Following the announcement of Yukos’ bankruptcy, a number of its assets, including Yukos Finance, were held, the transparency of which raised serious doubts. This company in 2007 for 307 million Dollars bought by Promneftstroj, registered in Moscow.

The ruling of the Dutch State Council states that the decision not to recognize the bankruptcy of Yukos declared in Russia means that the results of the auction through which Promneftstroj was acquired by Yukos Finance are also not recognized.

The Netherlands State Council passed such a ruling after examining the appeal by the Promneftroj against the decision of the Court of Appeal of Amsterdam of 9 May 2017. He basically proclaimed that the Russian authorities deliberately dropped the private oil concern Yukos in 2006, and ordered him to pay an enormous amount of tax and without taking adequate legal protection. The Court of Appeal’s ruling also stated that the institution that organized the Yukos estate was not entitled to sell Yukos Finance.

Former Yukos president Steven Theede said the Dutch court judgment “revealed how far Russia could go by manipulating the legal process and ignoring the rule of law”. “With this decision, the case is finally closed, justice has triumphed. We are pleased that we have managed to protect its assets abroad for the benefit of former Yukos shareholders, ”said Theede.

“With this decision, the case is finally closed, justice has triumphed. We are pleased that we have managed to protect its assets abroad for the benefit of former Yukos shareholders, ”said Theede.

In the summer of 2006, 14 minutes was enough for Moscow Arbitration to make a decision to announce Jukos’ bankruptcy due to impressive tax claims made by the state. One year later, Yukos’ assets were transferred to the state concern Rosneft, which became the largest country in the country from the eighth largest oil industry in Russia.

The main shareholder and leader of Yukos, the fierce Kremlin critic Mikhail Khodorkovsky and his business partner Platon Lebedev were arrested in 2003 and sentenced to two cases of highly controversial fraud, tax evasion and money laundering.

At the end of 2013, Russian President Vladimir Putin, in order to improve his country’s international image, gave grace to Chekorkovsky, who had left prison for more than a decade, who immediately left Russia. A month later, the Russian Supreme Court ordered the immediate release of P. Lebedev.

In July 2014, the European Court of Human Rights announced that the court in Chodorkovsky and his business partner P. Lebedev was unfair in Russia.

In January 2017, the Russian Constitutional Court ruled that the ruling of the European Court of Human Rights in the Yukos case, which obliges Russia to pay the shareholders of the former failed oil giant, nearly $ 1.9 billion. There is no legal force in Russia because it is in conflict with the country’s basic law.

In addition, the Constitutional Court has recognized a reasonable search for taxes and fines for their non-payment of Yukos, which is named in the Order as “a malignant taxpayer who has ceased trading with large debts”.

The former Yukos shareholders were brought to justice in Russia in 2005.

Click here to read the original article in Lithuanian.

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