The court in the Hague issued its first decision on an appeal of former Yukos shareholders


The Hague court of appeal considers an appeal of former Yukos shareholders to cancel $50 billion in compensation for bankruptcy and sale of the assets of the oil company, issued its first decision denying the former shareholders in the separation process into two parts, according to Global Arbitration Review.

Previously, lawyers Hulley Enterprises, Yukos Universal and Veteran Petroleum asked the appellate court to first hear the question, did the international court of arbitration in the Hague awarded to these entities of $50 billion in 2014, jurisdiction for settlement of the dispute, ongoing since 2005. In April 2016 it jurisdictional argument became the basis for the Dutch court of first instance (district court of the Hague) overturned the decision of the arbitration. The district court then considered that Russia was not a full member of the Energy Charter Treaty, and therefore a dispute with the Yukos shareholders in the arbitration under the Treaty could not be.

The Russian side believes that the proposal of the lawyers of former Yukos shareholders to separate the appeals process into two parts was one of the “procedural tricks” in the framework of the “tactics of a tightening” of the process. It follows from statements submitted to the International centre for the legal protection (MTSPZ, coordinates the protection of Russia from the international claims of former shareholders of Yukos). Former shareholders proposed to the court at the first stage, “focus only on the consideration of the first argument of the Russian side (the provisional application of the ECT, are not applicable to the mechanism for international arbitration disputes), which was decisive for the District court of the Hague,” said MTSPZ. “All the other fourteen reasons given by the Russian Federation, it was recommended to leave for later. Adoption of such a proposal the court would delay the appeals process for years and allowed the former shareholders of Yukos to continue the practice of arrests of the Russian property in France and Belgium,” — said in a press release MTSPZ.

The court also ordered the former shareholders of Yukos to submit, by 16 March 2017, a detailed Memorandum on all the grounds of appeal and not just part of them, indicates MTSPZ. The Russian side is “pleased that the Hague court of appeal <…> ordered them to submit a Memorandum on the totality of the issues raised by the Russian side”.

But the former shareholders of Yukos also announced that they consider the decision of the court of appeal for its success. “The court has clearly established the calendar for the consideration of our appeal and we optimistically look forward to provide our written statements by 14 March,” told the representative of the Director of communications GML (a holding company representing the interests of former shareholders) Jonathan hill. “We are pleased that the court listened to our proposals for the deadline of the parties and determined the date of the hearing. This will prevent any delays and obstacles from the Russian Federation,” says hill. He denied the charge of “delaying tactics” on the part of MTSPZ, putting that the purpose of the GML “as soon as possible to ensure justice”. “We have no interest to delay the process,” says hill.

In April 2016 the district court of the Hague at the request of Russia has cancelled the decision of arbitration on the payment of $50 billion to Yukos shareholders, but they appealed the decision to the local appeals court — the first hearing was held in mid-January 2017. In most countries, the decision of the District court of the Hague meant the termination or suspension of enforcement of an arbitral award (as happened in the UK, USA, Germany, India), but in Belgium and in France, the enforcement proceedings were continued. In France, the former shareholders of Yukos recently suffered a series of setbacks (including some arrests of ownership was deemed illegal by a French court). But in Belgium the court of first instance in December 2016, has rejected the petition of Russia on the abolition of arrests of its property, carried out by the former shareholders of Yukos in June 2015.

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