Russia to face trial in Britain over $60 billion unpaid dues to Yukos Oil

By Upmanyu Trivedi

Russia will have to answer at trial why it hasn’t paid out a record $60 billion arbitration award over the collapse of Yukos Oil Co., after a London judge denied the country immunity from a case brought by the former owners of the now defunct oil producer.
 

The Wednesday ruling is the latest staging post in a sprawling legal saga that’s dragged on for two decades. Former owners of the Yukos are seeking to enforce a 2014 Dutch arbitration tribunal ruling that ordered the Russian government to pay $50 billion. The amount has now swelled to almost $60 billion including interest. 
 

The arrest of Yukos founder and Russia’s then richest man, Mikhail Khodorkovsky, on the tarmac of a Siberian airport in 2003 and the subsequent seizure of Yukos for back taxes marked a marked a pivotal moment in the early days of President Vladimir Putin’s rule and helped establish his ultimate power after the chaos of Russia’s post-Soviet transition.
 

The judge in London rejected the Russian government’s argument that the UK court isn’t the right place to hear the case and denied permission to appeal and denied it immunity. 
 

Russia had argued that the award that was “procured by a fraud, but evens so as a sovereign state it cannot be sued. A lawyer representing Russia in the case declined to comment after the ruling.
 

The shareholders alleged that the Russian government drove the country’s once biggest oil company into bankruptcy for political reasons. 
 

The ruling allows “the case to proceed to its next stage without further delays, getting us closer to the moment when the Russian Federation will have to pay for its illegal actions,” Tim Osborne, the chief executive officer of GML Ltd., a holding company belonging to the former majority shareholders in Yukos, said in an emailed statement.