One Yukos-affiliated company drops suit against Russia

MOSCOW, Sep 28 (PRIME) -- One of the companies affiliated with defunct oil company Yukos has withdrawn its suit from the Permanent Court of Arbitration in the Hague and the case was terminated, Andrei Kondakov, director general of the International Center for Legal Protection which represents Russia in disputes with former Yukos owners, told PRIME Wednesday.

In July 2014, the Permanent Court of Arbitration in the Hague ruled that the Russian government must pay U.S. $50 billion compensation to Group Menatep Limited, which unites former Yukos owners. Russia refused to fulfill the order, and the shareholders sent claims to several countries, asking to help with the fulfillment of the order. In April 2016, the Hague District Court voided the lower court ruling.

“One of the companies, which I cannot name due to reasons of confidentiality, has recalled its suit. And condition for the recall is a ban on submission of another suit with similar claims,” Kondakov said adding that the court suspended proceedings over the suit.

In total, former Yukos owners are suing Russia for $65 billion. “The most notorious suit was filed by three companies (Hulley Enterprises, Yukos Universal Limited and Veteran Petroleum) created in exotic tax jurisdictions through shell companies. The penalty award by a panel of three arbiters in the Hague in the 2014 suit amounted to $50 billion,” he said.

British company RosInvestco UK Ltd filed a significantly smaller suit to the Arbitration Institute of the Stockholm Chamber of Commerce in 2005, but lost the dispute. Funds of the Quasar de Valores group also filed a suit to the Stockholm authority in 2007, but they lost the dispute after an appeal, Kondakov said.

“Besides the aforementioned disputes, there are also so-called disputes of the second wave, as three more suits from companies Luxtona, Yukos Capital and FPH totaling $15 billion were filed in 2013–2014 to the arbitration in the Hague. The claimants refer to an alleged violation of the Energy Charter deal,” he said.

“Two of the second wave suits have passed the stage of consideration of the jurisdiction issues, and we are waiting for a corresponding decision of arbiters on them, we have informed them of the Hague District Court’s decision. The third suit is yet to pass the study of arbitrability.”

In 2003, the Russian government accused management of then the largest oil company Yukos of economic crimes. Several company officials were sentenced to prison for fraud and tax evasion. Its core owner, Mikhail Khodorkovsky, was charged with several consequential sentences and spent 10 years in prison before he was pardoned by President Vladimir Putin. The company declared bankruptcy, and its assets were sold to state-owned oil major Rosneft.

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