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Russia might appeal Hague's arbitration court resolution on Yukos

August 12, 2014, 11:31 UTC+3 MOSCOW
Russian Deputy Foreign Minister Vasily Nebenzya says the Hague Arbitration Tribunal's ruling on the legal action lodged by shareholders of the now defunct Yukos company was politically motivated
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The seat of the Permanent Court of Arbitration in The Hague

The seat of the Permanent Court of Arbitration in The Hague

© EPA/GUUS SHOONEWILLE

MOSCOW, August 12. /ITAR-TASS/. "Russia might appeal a resolution by the Hague Arbitration Court on the Yukos case because the judicial body which passed the resolution did not have the necessary jurisdiction to do that," Russian Deputy Foreign Minister Vasily Nebenzya told ITAR-TASS on Tuesday.

"The Arbitration Court was not entitled to hold merit hearings into the case because there was no legal basis for that. Russia never gave its consent to settlement of disputes with "foreign" investors at arbitration bodies," the diplomat said.

Nebenzya said the Hague Arbitration Tribunal's ruling on the legal action lodged by shareholders of the now defunct Yukos company was politically motivated.

"As for the final ruling by the Permanent Court of Arbitration in Hague, published on July 28, 2014, we proceed from the standpoint that the judicial body that passed the ruling had no required jurisdiction," Nebenzya said.

Russia is also bewildered by “the amount of losses determined arbitrarily” and awarded by the Arbitration Court on the grounds of the Energy Charter Treaty of December 17, 1994, which has not been ratified by Russia, the deputy foreign minister said.

Russia temporarily applied this Treaty inasmuch as this did not contradict the Russian Constitution and legislation, he said.

“All these circumstances prove that the Arbitration Court failed to approach this dispute with common sense required from judges in these situations,” the deputy foreign minister said.

“Instead of an objective and unbiased consideration of the matter, the Arbitration Court panel was guided by situational considerations in its actions and, as a result, passed a politically motivated decision,” the deputy foreign minister said.

Such an approach undermines the authority of the Arbitration Court and the Energy Charter Treaty as “their implementation mechanisms are acquiring ever more politicized nature and, as in this case, becoming a cause for abuse by internal investors registering themselves as foreign residents with the help of offshore schemes for the purpose of tax evasion,” the Russian deputy foreign minister said.

“In view of this, it would be logical to appeal against The Hague Court’s ruling, especially considering that pursuant to the imperative norms of the legislation of the Netherlands, the absence of jurisdiction serves as the ground for a Dutch state court to annul the Arbitration Tribunal’s decision,” the Russian deputy foreign minister said.

Yukos, once Russia’s largest oil firm, was accused of tax crimes and declared a bankrupt by a court ruling in 2006 while its assets were sold at auctions during the liquidation procedure.

Yukos former head Mikhail Khodorkovsky and his business partner Platon Lebedev were found guilty of embezzlement and tax evasion in May 2005 and sentenced to nine years in prison.

While serving their prison term, both Khodorkovsky and Lebedev were found guilty of embezzlement and money laundering in a second criminal case in December 2010 and sentenced to 14 years in prison, with account taken of the jail term they had served.

Khodorkovsky was pardoned by Russian President Vladimir Putin and left the prison in December 2013. Lebedev was released from the jail in early 2014.

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