Shareholder Lawsuits
International investors from around the world have initiated legal action against the Russian Government, in international courts and arbitration chambers, for the destruction of the company and discriminatory expropriation of its assets.
Energy Charter Treaty Claim by Yukos former majority shareholders
In 2008, the Permanent Court of Arbitration in The Hague considered a claim by GML - formerly Group MENATEP - for a minimum of $28.3 billion in compensation from the Russian Federation due to the disintegration of Yukos. GML's Energy Charter Treaty-based claim is the world's largest investment lawsuit to date, with the value of the claim potentially reaching $100 billion. Yukos shareholders accuse the Russian Federation of unlawfully expropriating their investments by issuing the company with a series of impossibly huge tax demands, forcing the sale of its production subsidiaries to state-owned companies at a fraction of their value.
In November 2009, an arbitration tribunal convened in The Hague ruled that Yukos's former majority shareholders are entitled to seek compensation under the Energy Charter Treaty which it ruled, crucially, was binding on Russia at the time of the expropriation of Yukos's assets, despite the Russian Parliament's failure to ratify the Treaty.
The November 2009 arbitral decision paves the way for a hearing on the merits of the claim, scheduled to be heard in autumn 2012. If the tribunal awards compensation, and if the Russian Federation refuses to execute payment, the award could be enforced against Russian state assets in the courts of any signatory to the New York Convention on the Enforcement of International Arbitration Awards.
RosInvestCo vs. Russian Federation
In September 2010, an international arbitration tribunal in Sweden found the Russian Federation liable for the expropriation of RosInvestCo UK Ltd., a minority Yukos shareholder. The decision of the Arbitration Institute of the Stockholm Chamber of Commerce became public in December 2010 after Russia applied to the Swedish courts for it to be set aside. The arbitrators decided that Russia must pay $3.5 million to RosInvestCo UK Ltd., and stated that the expropriation of RosInvestCo was "unlawful, not in the public interest, discriminatory and without payment of compensation". This outcome was significant because it was the first time that an international court or tribunal decided on the merits of an expropriation claim filed against Russia by former Yukos investors.
Spanish Minority Shareholders
Spanish investors in July 2006 sought compensation from the Russian government for the forced bankruptcy of Yukos. The former Yukos investors are seeking redress through arbitration in Sweden, on the basis of the Russia-Spain Bilateral Investment Treaty. The case is of importance for investor claims totaling $10 billion. In April 2009, the Spanish investors won a groundbreaking ruling in the Arbitration Institute of the Stockholm Chamber of Commerce, exposing Russia to potentially dozens of additional lawsuits. The Stockholm Court ruled that the case was admissible and is currently pending on the merits.
Dutch Proceedings
In October 2007, the Netherlands became the first country in Europe that refused to recognize the legitimacy of the Yukos bankruptcy. A Dutch court said receiver Eduard Rebgun, who had replaced the management of Dutch-based Yukos Finance BV and put all assets, worth about $2 billion, up for sale, had no right to do so, and all his actions were ordered to be reversed. The court in Amsterdam ruled that the Yukos bankruptcy contradicted Dutch legislation and declared the change of management at Yukos Finance BV unlawful.
In April 2009, the Amsterdam Court of Appeals decided to recognize and enforce an arbitration decision awarding roughly $400 million to Luxembourg-based Yukos Capital S.a.r.l. in a suit against Rosneft. The award had been made by a Russian arbitration tribunal, but later had been annulled by a Russian court. Nevertheless, the Dutch court found the arbitral award valid and enforceable and the previous decisions by the Russian courts not credible. This decision made it possible for Yukos Capital S.a.r.l. to seize any assets of Rosneft it might find in the Netherlands.
In January 2011, the Dutch Supreme Court ruled in favor of Yukos International in a dispute with Russia's Promneftstroy over proceeds of $1.2 billion from an oil refinery sale. The highest court in the Netherlands said that Dutch-incorporated Yukos Intl was entitled to the $1.2 billion in sale proceeds because Dutch courts ruled in 2007 and 2010 that the Russian bankruptcy declaration of Yukos could not be recognized in the Netherlands.