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Page added on July 28, 2014

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Russia ordered to pay $50B over oil company

Business

An international court on Monday ordered Russia to pay over $50 billion in compensation to the former majority shareholder of now-defunct oil producer Yukos over the expropriation of the company more than 10 years ago.

In one of the largest arbitration cases ever, a subsidiary for GML Ltd., once the biggest shareholder in Yukos Oil Co., had sought $103.5 billion from Russia.

The Russian government under President Vladimir Putin in 2003 leveled massive tax claims against Yukos, then Russia’s largest oil company owned by the country’s richest man Mikhail Khodorkovsky. Russia imprisoned Khodorkovsky and seized the company’s assets when they couldn’t pay.

The move was widely seen as retaliation for Khodorkovsky’s support for opposition political parties. Russia says it was merely seeking payment for back taxes and penalties that Yukos evaded in the period 2000-2003. Yukos shareholders received no compensation for that.

Khodorkovsky spent ten years in prison before he was pardoned by Putin in December last year. Khodorkovsky has said he is not party to the case and is not interested in its outcome.

GML, formerly Group Menetap Ltd., said the Permanent Court of Arbitration’s ruling found Russia had sought to bankrupt Yukos and appropriate its assets and that it was determined to do whatever was necessary to achieve this purpose.

“The majority shareholders of Yukos Oil were left without compensation for the loss of their investment when Russia illegally expropriated Yukos,” GML Executive Director Tim Osborne said in a statement. “It is a major step forward for the majority shareholders, who have been battling for over 10 years for this decision.”

Russian Foreign Minister Sergey Lavrov, commenting earlier Monday, said Russia will be appealing the ruling.

“Authorities who are representing Russia in this trial will use all possible legal means to defend their position,” Lavrov said.

The ruling adds to tensions between Russia and the international community at a time when relations are at their lowest ebb since the end of the Cold War. Following the downing of Malaysia Airlines Flight 17 over eastern Ukraine, the U.S. and European Union are debating further economic sanctions against Moscow because of its support for rebels suspected of launching the attack.

“It is GML’s belief that the ‘Yukos affair’ was a major strand in the Russian government’s strategy to bring Russia’s natural resources under direct Kremlin control and to use those resources as a tool to reassert control over Russia’s former sphere of influence,” Osborne said in testimony before the U.S. Helsinki Commission in 2009. “It marked a turning point” as Russia moved away from its “commitment to the rule of law, property rights, and energy security.”

GML sought relief from the Permanent Court of Arbitration in The Hague, Netherlands, under the Energy Charter Treaty, which creates the legal basis for an open international energy market. The holding company claimed that Russia violated the treaty, which requires swift and fair compensation if assets are expropriated.

GML says that even before Russia filed its tax claim against Yukos, the company had paid $15 billion in taxes for the period on total income of $29 billion. The government claimed the company owed an additional $27 billion, bringing Yukos’ total tax liability for the period to $42 billion — more than the company’s gross income, according to GML.

“This is not taxation,” Osborne said in testimony before a U.S. House Financial Services subcommittee in 2007. “This is confiscation.”

USA-TODAY



8 Comments on "Russia ordered to pay $50B over oil company"

  1. dissident on Mon, 28th Jul 2014 7:57 pm 

    How can some arbitration court in the Hague determine the validity of court rulings in Russia? Did they use the MSM propaganda as “evidence” that Russian courts have no legitimacy. Anyone interested in Khodorkovsky should look up is gangster takeover of the Apatit fertilizer enterprise during the 1990s. This mafioso has left a trail of bodies in his wake and was finally taken down like Al Capone for massive tax fraud. Naturally, the west treats him as some sort of hero. Much like it treats Svoboda and Right Sector as voices of European values in Ukraine. What a sick joke.

  2. Makati1 on Mon, 28th Jul 2014 11:03 pm 

    dissident, the Hague Court is in the Western pocket. This is more propaganda BS from the DC Mafia.

    “The Shocking Reason Putin Isn’t Worried About The $50 Billion Yukos Ruling”

    “… One person close to Mr Putin said the Yukos ruling was insignificant in light of the bigger geopolitical stand-off over Ukraine.

    “There is a war coming in Europe,” he said. “Do you really think this matters?”

    http://www.zerohedge.com/news/2014-07-28/shocking-reason-putin-isnt-worried-about-50-billion-yukos-ruling

    Isn’t that what the DC Mafia wants? World War 3? Didn’t happen with Iran or Syria or any other 3rd world country, but pushing a nuclear country, because you want to control their vast resources, sure will. And then there is China…

  3. Arthur on Tue, 29th Jul 2014 2:58 am 

    The Rothschildt’s western courts come to the aide of Khodorkovsky. This is one battle in the war that the western banksters are waging against Russia on all fronts, like other battles such as Syria and Ukraine.

  4. Arthur on Tue, 29th Jul 2014 3:28 am 

    http://rt.com/business/176200-moscow-hague-yukos-ruling/

    “The Hague’s arbitration court was not legally empowered to view the case of Yukos Oil Company v. Russia, and the court’s “one-sided” ruling disregards previous Strasbourg court decisions on the issue, the Russian Finance Ministry said in a stateme”

    There won’t be flowing money into the pockets of former olicharch Khodorkovsky from the Russian people any time soon.

  5. Davy on Tue, 29th Jul 2014 7:47 am 

    Art, just another nail in Putt’s economic coffin. How long can he afford all the adventures and bold geopolitical maneuvers. I see all the complaints here about the US overextending themselves Russia is far smaller economy and population with a lot on their plate.

  6. Arthur on Tue, 29th Jul 2014 12:10 pm 

    Not so sure about Putin’s coffin. He has what the industrialized world needs: oil and gas. Putin has options. And here in Europe the right leaning part of the population supports Putin. And so does China. In 1987 nobody in Eastern Europe would have expected that two years later the Soviets would be send packing. Same thing could happen to Americans. There is no way that the European population is going to cooperate with a NATO conflict with Russia. And we have seen in the ME how internet and social media can be used to overthrow a hated regime, like for instance the multicultural regimes in Europe. Let’s see how Europe will react if Russia cuts oil and gas to Europe, like in the coming winter.

  7. Northwest Resident on Tue, 29th Jul 2014 12:28 pm 

    “There is no way that the European population is going to cooperate with a NATO conflict with Russia.”

    Who was the Russian official that just recently stated that war is coming to Europe? Some unnamed advisor, as reported by ZeroHedge, so maybe not reliable information.

    I can’t escape the long-held feeling that the build up in hostilities — and recently the downed airliner — are all planned and coordinated with the goal of preparing the European (and Russian) populations for military conflict. NOT because large-scale military conflict is going to happen, but because a populace cowed by fear of military conflict will be more amenable to things like martial law, rationing, riot control and suppression, excessive monitoring, reduction in freedom of speech and other “freedoms” — in other words, all those things that we know will happen during, before and after a large scale economic collapse. Remember it was Warren Buffet that said global economic collapse would surely result in widespread bloodshed in Europe due to ancient ethnic and other tensions. TPTB surely agree with Warren Buffet on this point, and are taking concrete steps right now, before our very eyes, to prevent that from happening.

    Everything is playing out against a backdrop of impending economic collapse and widespread energy shortages. Putin, Obama, European Union — they are just actors on the stage, saying their lines, playing their roles. TPTB behind the curtain are the ones running the show, and it is both frightening and awe-inspiring at the same time to witness how they move events and resources to accomplish really gigantic goals. My POV…

  8. Davy on Tue, 29th Jul 2014 1:26 pm 

    Art, will you admit Putt is extending himself economically and militarily? There is a point called diminishing returns of foreign policy.

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