GML welcomes The Hague Appeals Court ruling

On 25 September 2018, The Hague Appeals Court clarified the scope of the ongoing Dutch set-aside proceedings where former Yukos majority shareholders (GML) aim to reinstate the Arbitral Awards of 2014, which awarded them more than $50 billion in compensation after Russia unlawfully expropriated their investment.

The former Yukos majority shareholders welcome the court’s ruling, in particular its decision to throw out Russia’s allegations that the shareholders committed fraud upon the Arbitral Tribunal. They now look forward to exposing Russia’s other false allegations, which aim to distract the court from the brutal destruction of a successful company. The unlawful expropriation of Yukos served to eliminate a political rival, Mikhail Khodorkovsky, and siphon valuable assets to the state-owned companies, Rosneft and Gazprom. This was the opening act of the kleptocracy that is the regime of Vladimir Putin.

Tim Osborne, Chief Executive of the former Yukos majority shareholders (GML), said:

“We asked the Court of Appeal to clarify the scope of the legal dispute and the issues to be addressed by the parties. Even though the Russian Federation had argued against it, the Court of Appeal ruled this was an appropriate and admissible request to delineate the scope of the appeal. The Court subsequently decided to throw out the Russian Federation’s allegations that the Claimants committed fraud upon the Arbitral Tribunal. At the same time, the Court decided that it will hear the parties’ arguments on the merits of the Russian Federation’s accusations about alleged historical “illegalities” related to the privatisation of Yukos. We welcome the clarifications provided by the Court. We now look forward to exposing Russia’s false accusations for what they are: one more desperate attempt to divert the court’s attention from the truth.”

The 2014 Awards are the result of a decade-long independent arbitration in The Hague, which concluded unanimously that Russia unlawfully expropriated Yukos Oil Company and thus violated its obligations under the Energy Charter Treaty. The Arbitral Tribunal awarded compensation of over $50 billion to the former Yukos majority shareholders.

The Awards were then set aside in 2016 by the District Court of The Hague on the grounds that the Arbitral Tribunal lacked jurisdiction since Russia had not ratified the Energy Charter Treaty and was not bound by its provisional application. The former Yukos majority shareholders believe the ruling of the District Court was wrong, and have appealed to The Hague Court of Appeal to reinstate the Awards.

In response to the appeal, Russia has changed the factual and legal basis of its claims to set aside the Arbitral Awards. It has brought a host of false allegations, which the Arbitral Tribunal firmly rejected; the former Yukos majority shareholders asked The Hague Court of Appeal for guidance on whether Russia should be allowed to do so. Today the court decided to hear some of those allegations, and the shareholders look forward to exposing them as one more attempt to rewrite history.