UPDATE: Court allows Russia not to pay 2 bln euros to Yukos owners

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MOSCOW, Jan 19 (PRIME) -- The Russian Constitutional Court has allowed the government not to fulfill the European Court of Human Rights’ decision on a 1.86 billion euro compensation to shareholders of defunct oil company Yukos, according to information obtained by PRIME at court on Thursday.

The court said that the ruling contradicts the Russian constitution, and Moscow has the right to reject the liabilities imposed on it if this is the only way to not violate the constitution, Court Chairman Valery Zorkin said.

The relations of Russian and European legislation should not have a subordinate character, but be built in the form of a dialogue. “The European court should respect the sovereignty of Russian legislation,” he said.

In 2003, the Russian government accused management of Yukos of economic crimes. Several company officials were sentenced to jail for fraud and tax evasion. Its core owner, Mikhail Khodorkovsky, spent 10 years in jail before he was pardoned by President Vladimir Putin in December 2013. The company was declared bankrupt, and its assets were sold to state-owned Rosneft.

In July 2014, the European court obliged Russia redeem 1.86 billion euros to former Yukos owners due to violation of their right for legal protection and fair trial. The court decided the company suffered losses due to retrospective 1.3 billion euro fines for tax violations in 2000–2001, a 7% enforcement fee, and a disproportionate character of proceedings.

Russia’s Justice Ministry said then that the Strasbourg court based its decisions on interpretations of the human rights convention that contradict the Russian constitution.

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