Yukos Owners Are Confident as Ruling on $100 Billion Claim Nears

Mikhail Khodorkovsky’s former Yukos Oil Co. partners said they’re confident of winning damages in a more than $100 billion case against Russia over the bankruptcy of the crude producer.

A tribunal at the Permanent Court of Arbitration in The Hague is expected to issue a ruling by the end of this month or soon after, according to Tim Osborne, a director for GML Ltd., which used to control Yukos. Winning the case would mean Russian state-run companies may face confiscation of overseas assets, Osborne said.

President Vladimir Putin’s government dismantled Yukos, once Russia’s biggest crude-oil exporter, after imposing $27 billion in tax charges. State-controlled OAO Rosneft became the nation’s largest oil producer by acquiring most of Yukos’s assets at a series of forced auctions.

“I remain confident that we will receive a substantial award of damages when the decision comes out,” Osborne said by phone from London June 18. “It would underline that this whole attack by the Russian government was politically motivated and confirm our view that it acted illegally in expropriating shares in Yukos Oil without compensation.”

Russia will have the right to contest any potential damages through Dutch courts, Osborne said. Russia’s justice, foreign and energy ministries didn’t immediately respond to e-mailed requests for comment. Rosneft, the world’s biggest publicly traded oil producer by output, declined to comment. There is no reason to lay claims against OAO Gazprom, spokesman Sergei Kupriyanov said by text. Gazprom bought Yukos natural gas assets from auction winners, Eni SpA and Enel SpA.

Khodorkovsky Arrest

Khodorkovsky, once Russia’s richest man with a fortune of $15 billion, has said he won’t seek to recover assets lost after he was arrested at gunpoint for fraud and tax evasion at a Siberian airstrip in 2003. He has accused Putin and Igor Sechin, then on Putin’s staff and now Rosneft chief executive officer, of targeting him because he funded opposition parties, a claim the Kremlin has denied.

Khodorkovsky, who’s living in Switzerland after Putin freed him in December following 10 years in prison camps, isn’t entitled to any part of the damages because he transferred his Yukos stake to fellow shareholder Leonid Nevzlin, said Osborne. Nevzlin sought refuge in Israel in October 2003, Vedomosti newspaper said at the time, before Khodorkovsky’s arrest.

Yukos Beneficiary

Khodorkovsky didn’t immediately respond to a request for comment submitted via Facebook and his spokeswoman, Olga Pispanen, didn’t answer calls to her mobile.

Nevzlin is beneficial owner of just over 70 percent of GML, while four other ex-Yukos owners -- Platon Lebedev, Mikhail Brudno, Vladimir Dubov and Vasily Shakhnovsky -- each have just under 7.5 percent. GML, which filed the lawsuit, used to own 60 percent of Yukos.

“We look forward to winning,” Shakhnovsky said by phone.

GML filed the lawsuit under the Energy Charter Treaty, an international agreement that in part regulates investments in the energy industry, which Russia signed but never ratified. The Hague tribunal ruled in 2009 that it would hear the case, which had been submitted in 2007.

Two arbitration tribunals in Stockholm in 2010 and 2012 ruled in favor of Yukos investors from the U.K. and Spain who demanded compensation under investment protection treaties.

Former management of Yukos have filed a separate lawsuit at the European Court of Human Rights asking it to order Russia to pay $38 billion for appropriating the company’s assets. That award would be payable to all shareholders.

Before it's here, it's on the Bloomberg Terminal.