PRESS: Swedish court favors Russia in Yukos case

MOSCOW, Jan 28 (PRIME) -- A Swedish Court of Appeal has ruled that the Stockholm Arbitration Court had no competence to order Russia redeem U.S. $2 million in 2012 to four Spanish investment funds under a suit for expropriation of assets of defunct Yukos oil company, Kommersant business daily reported Thursday.

In 2003, the Russian government accused management of then major oil company Yukos of economic crimes. Several company managers 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 later declared bankruptcy, and its assets were sold to state-owned oil major Rosneft.

The investment funds field their suit based on an agreement for protection of investments signed between Spain and the USSR in 1990. The court of appeal said that the Stockholm court could only consider the amount and an order of redemption, while the fact of investment or expropriation of a company was not covered by the Spain-USSR accord.

The fact of the investment is a disputable matter, as the funds bought only American Depositary Receipts of Yukos from Deutsche Bank, not the company shares, Kommersant reported.

Roman Zykov, the secretary general of the Russian Arbitration Association, told the business daily that the court of appeal’s decision strengthens Moscow’s position in cases against a later decision of the Permanent Court of Arbitration in Hague to award former Yukos’ owners a $50 billion compensation from Russia, as this was based on the Stockholm court’s decision.

Andrei Panov, a lawyer from Norton Rose Fulbright, told Kommersant that the decision of the Swedish court of appeal shows that Europe has no general bias towards Russia and European courts are ready to right the wrongs of their arbitration courts.

End