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Russia to Appeal Hague Arbitration Court Ruling on Yukos - Finance Ministry

RIA Novosti

21:09 28/07/2014

MOSCOW, July 28 (RIA Novosti) – Russia will appeal a recent ruling by an arbitration panel in the Netherlands over the payment of billions of dollars to shareholders of the former Russian oil giant Yukos, the Finance Ministry said Monday.

"The Russian Federation will contest the ruling of The Hague's Arbitration Court in Dutch courts and expects to get a fair result," the ministry said in a statement.

"The key reason for the appeal is that the [Hague's] Arbitration Court had no jurisdiction to review the [shareholders'] claims because the Russian Federation has not ratified the Energy Charter Treaty," the statement said.

The ministry also pointed out at a number of serious flaws in the review of the Yukos case, including "biased interpretation of the evidence" and "unacceptable reversal of complex decisions made by Russian courts."

Earlier on Monday, The Hague's Permanent Court of Arbitration ruled that Russia must pay a group of shareholders in the now-defunct Yukos $51.6 billion, just under half of their $114 billion claim, for expropriating the company's assets. Russia has also been ordered to pay about $65 million in legal costs.

In 2003, Russia's authorities accused the leadership of Yukos, once the largest oil company in the country, of economic crimes. A range of Yukos managers were convicted for fraud and tax evasion. Yukos was later declared bankrupt and state-controlled oil company Rosneft bought the bulk of its assets.

Yukos' managers contended that the Russian government illegally forced the oil firm out of business and bankrupted it, which allowed Rosneft to snap up its assets and become Russia's largest oil producer.

Yukos founder Mikhail Khodorkovsky had spent a decade in prison for fraud and tax evasion until he was pardoned in December 2013.

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