Russia vows to fight tribunal demand for $2.6-bln payout to Yukos Capital

TASS | 29 July 2021

Russia vows to fight tribunal demand for $2.6-bln payout to Yukos Capital

MOSCOW, July 29. /TASS/. Russia’s Prosecutor General’s Office will challenge the ruling by an international tribunal ordering the Russian Federation to pay $2.6 bln to Yukos Capital, a source in the office told TASS. Meanwhile, the tribunal had rejected most of the claims against the Russian Federation and that the arbitrators were divided on the issue of jurisdiction, the source noted.

Read also: Ex-Yukos unit wins new $5 billion court judgement against Russia

"On July 23, 2021, another arbitration proceeding as part of the so-called second wave of lawsuits against the Russian Federation initiated by former shareholders of Yukos and persons affiliated with the company was completed. By a majority of votes, the tribunal handed down a verdict ordering the Russian Federation to pay out $2.6 bln, plus interest and arbitration costs," the Prosecutor General’s Office said.

"In this regard, the final arbitral decision cannot be considered to be legal and grounded. The Russian Prosecutor General’s Office will, without fail, appeal this decision," according to a source in the body that is currently authorized to present the interests of the Russian Federation in international courts.

During the entire proceeding, the Russian side consistently challenged both the competence of the panel of judges to consider the disputes on the basis of the Energy Charter Treaty, and the validity of claims themselves, the Prosecutor General’s Office said. Russia’s well-founded position made it possible to reject most of requirements made by Yukos Capital.

"Meanwhile, the judges failed to reach a unanimous opinion on the items of the ruling made in the plaintiff’s favor. Two of three judges prepared three dissenting opinions on the case. There was no consent within the structure of the arbitration, both regarding the existence of its own jurisdiction to entertain the dispute, and regarding a clearly unjustified recovery of damages in Yukos Capital’s favor, despite the fictitious nature of inter-company loans that were part of a larger illegal scheme by Yukos shareholders to evade taxes and consecutively siphon off funds from Russia and launder them," press service of the Prosecutor General’s Office said.

Particularly, Professor Brigitte Stern admitted that the tribunal did not have jurisdiction to consider the requirements of Yukos Capital to the Russian Federation on two grounds: the temporary employment of the arbitrage clause contradicting Russian legislation and the lack of real investment in the Russian economy by Yukos Capital. She also opposed awarding any compensation to Yukos Capital because it will lead to its ungrounded profiteering off the Russian Federation.

source: TASS