Russia Fails to Halt Enforcement of Yukos $57 Billion Award
Russia lost a bid to suspend enforcement of $57 billion in damages and interest won by former shareholders of Yukos Oil Co.
(Bloomberg) -- Russia lost a bid to suspend enforcement of $57 billion in damages and interest won by former shareholders of Yukos Oil Co. as the government awaits a ruling on its final appeal against the arbitration award late next year.
The Dutch Supreme Court’s decision on Friday follows The Hague Court of Appeal’s February decision to reinstate the record damages in the 15-year legal saga that has raged between the Kremlin and the owners of what was once Russia’s biggest oil company.
After the earlier $50 billion damages ruling in 2014, former Yukos shareholders sought to seize assets in countries including France, Belgium, the U.S. and India. In Belgium and France, state assets that had been frozen were unblocked following Russian protests.
In May, the Russian Justice Ministry said the damages now amount to $57 billion including interest.
The Kremlin has said it isn’t bound by the award, which amounts to about a tenth of its international reserves.
Hearings in Russia’s appeal to the Dutch Supreme Court challenging the ruling -- its last legal avenue to reverse the award -- begin early in 2021, with a decision expected in the autumn.
In its ruling Friday, the court said the likelihood of Russia’s arguments succeeding in that case are “not such as to warrant” suspending enforcement pending that decision. Russia’s Justice Ministry said the court wrongly applied “an overly harsh standard in assessing the chances” it would win the case next year.
While the Dutch decision on allowing asset freezes applies only to the Netherlands, it’s likely to be taken into account by other jurisdictions.
GML, a holding company belonging to four former Yukos shareholders, has said the ex-owners may target state-owned Rosneft PJSC, which took over most of Yukos’ assets and operates in 25 countries around the world.
©2020 Bloomberg L.P.