UK Court Freezes £425 Million Held by Rosneft
YUKOS Capital, a Dutch-based company, has confirmed that a London court had frozen £425 million held by Rosneft in the UK to enforce payment on a $389 million loan Rosneft took on when it took over YUKOS, including fines and interest.
Rosneft said it considered the UK injunction "groundless and is taking all necessary steps to protect its property in courts." However, analysts said that it marks the first time YUKOS has been able to exert real pressure on the group in more than five years of legal wrangling and could set a precedent for cases to come.
The Financial Times reports that executives and shareholders of YUKOS have been locked in legal battle with Rosneft since 2004 when the company took over most of group, run by Mikhail Khodorkovsky, and began the process of bankrupting it over more than $33 billion in back tax claims. They have vowed to pursue Rosneft and the Russian government with "a lifetime of litigation." Additionally, judges in the European Court of Human Rights are due to rule this year on a record $98 billion claim against the Russian government for unlawfully destroying YUKOS filed by former YUKOS executives.
Business Week adds that the ruling means that Rosneft may focus on Asia, rather than Europe. Chris Weafer, UralSib Financial Corp's Chief Strategist, said: "It corals the company and ensures that the growth focus stays towards Asia rather than the west."
RIA Novosti comments that the injunction could jeopardize payments by foreign customers for Rosneft's oil deliveries. Oil and Gas Eurasia adds that Rosneft has denied media reports that cash payments in dollars have been frozen.