Strasbourg Court Accepts $34Bln Yukos Case

The European Court of Human Rights has accepted a $34 billion lawsuit by former Yukos management against the government, apparently the largest claim ever made in the court. The claim is worth the tax collected from Yukos, the claimants’ spokeswoman Claire Davidson said in e-mailed comments Wednesday. The former managers say the charges against Yukos, once the country’s biggest oil firm, were fabricated so the government could snap up the firm. The Strasbourg-based court threw out some of the government’s key arguments against the litigation, including that Yukos no longer existed and the court lacked jurisdiction to hear the case. The court ruled that although Yukos had ceased to exist legally in 2007, the case had a lasting moral dimension. “All the more so if the issues raised by the case transcend the person and the interests of the applicant,” the court said in its decision to hear the case. The decision was made in late January but only published on the court’s web site this week. The court also dismissed the government’s argument that the claimants had failed to exhaust their appeals in Russian courts, siding with Yukos managers who said it would be hopeless to appeal in Russia. “The domestic courts consistently rejected the company’s attempts to contest the actions of the bailiffs, so the attempts would have been futile,” the court said. Human rights activists critical of the state’s onslaught against Yukos praised the court’s decision. “We welcome this decision and hope that the government will live up to its obligations under the European Human Rights Convention,” said Tatyana Lokshina of the Moscow bureau of Human Rights Watch. Former Yukos chief financial officer Bruce Misamore said the decision was good news for the company’s stakeholders. “This is an important step toward the vindication of the company’s belief in the rule of law — something it never secured in Russia,” he said in an e-mailed statement. It was unclear Wednesday when the court would actually make a ruling in the case. Davidson said the claimants had been asked to submit further information by April and noted that the case has been given priority. Kremlin spokesman Alexei Pavlov said Wednesday that he would only comment after the court made a final ruling.
Yukos managers filed the charges in 2004, when Yukos was targeted in a tax case that ultimately left the company bankrupt and several top managers in jail. Former Yukos CEO Mikhail Khodorkovsky was sentenced in 2004 to eight years in prison on charges of fraud and tax evasion, and the lion’s share of Yukos assets went to state oil company Rosneft in a series of auctions. Meanwhile, a senior federal prison official suggested that a second trial against Khodorkovsky could take place without the defendant actually being present. “Our pretrial detention facility can do a video conference with any Moscow court. This can be done if such a decision is made,” said Yunus Amayev, the head of the prison service’s branch in the Irkutsk district where Khodorkovsky is jailed, Interfax reported. Khodorkovsky’s lawyer Yury Shmidt said a court hearing without the defendant’s presence would not be legal. “I first thought this was a joke, but then these are the words of a senior prison service official,” Shmidt said by telephone from St. Petersburg. Prosecutors earlier this week filed new embezzlement and grand theft charges against Khodorkovsky and his business associate Platon Lebedev. Shmidt has called the new charges “nothing but nonsense.”