THE HAGUE, Netherlands (CN) — A 15-year-long legal case between Moscow and the former shareholders of oil giant Yukos will drag on even longer, after being sent back to a lower court Friday.
The Dutch Supreme Court ruled in favor of Russia, kicking the decision of whether to uphold a $50 billion arbitration award for former oil shareholders back to an appeals court for further consideration.
The case centers on a decision by the Permanent Court of Arbitration, an intergovernmental dispute resolution body based in The Hague, which concluded in 2014 that the Russian government did not act in good faith when it brought tax fraud charges against Yukos executives. It ordered Moscow to pay $50 billion to the former shareholders. The case was first brought to the arbitration panel in 2005.
Moscow contends that when Yukos was privatized in the 1990s, its shares were obtained through fraudulent actions. It appealed the PCA decision to a Dutch court in The Hague, which tossed out the award in 2016. The shareholders then appealed and The Hague Court of Appeal reinstated the fine, concluding the lower court didn’t have the authority to overrule the PCA.
However, the Dutch Supreme Court, which held a hearing on the matter earlier this year, has now quashed that decision on a technicality, referring the case to the Amsterdam Court of Appeal. In the Dutch legal system, cases are not returned to the lower court where they originated.
According to the five-judge panel, The Hague appeals court failed to consider Russia’s argument that the shareholders committed fraud during the PCA proceedings.
Both sides are claiming victory.
"The Russian Prosecutor General's Office welcomes the Dutch Supreme Court’s decision confirming the principles of the rule of law and the independence of justice," the agency said in a statement to Russian news agency TASS.
GML, the holding company of the former Yukos majority shareholders, also called the ruling a win.
“We will study the Supreme Court ruling, but are confident that the Court of Appeal in Amsterdam will dismiss the baseless allegations raised by the Russian Federation, and the arbitral awards will be upheld,” chief executive Tim Osborne said in a statement.
Russian opposition figure and Yukos CEO Mikhail Khodorkovsky and board member Platon Lebede each spent a decade in a Siberian prison camp for tax evasion and fraud. Before his arrest in 2003, Khodorkovsky was the richest man in Russia and the arrest was widely seen as a political maneuver by Russian President Vladimir Putin to consolidate power.
Last year, the European Court of Human Rights found that Russia did not give fair trials to the Yukos executives.
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