A Victory for Holders of Yukos
An arbitration panel has ruled that shareholders in YUKOS, which was disbanded by the Russian government in 2007, are entitled to seek an estimated $100 billion in damages from the Russian government.
The decision clears the way for a full airing of the dispute, in which lawyers are expected to argue that the Russian government had improperly expropriated YUKOS under the pretext of collecting unpaid back taxes.
At issue was an interpretation of the 1994 Energy Charter Treaty, an international agreement that Russia signed but never ratified. The charter obliges Russia to provide equal legal protection for energy investors. At the time of the signing, Russia pledged to abide by the treaty's terms provisionally, even without parliamentary ratification. Russia withdrew from the treaty entirely on October 19, but a treaty provision requires the government to continue to uphold property rights in the oil and natural gas sector for 20 years after the formal abrogation, or until October 2019.
Tim Osborne, the director of GML, the holding company created by YUKOS' founder Mikhail Khodorkovsky, said: "It's a huge turning point...Russia finally has to stand up and be counted on its merits."