Kremlin appeals Hague court decision in Yukos case

A man passes by the logo of oil giant Yukos in Moscow. © Maxim Marmur
Lawyers for the Russian government are asking the Hague District Court to overrule the Hague arbitration court decision ordering Moscow to pay ex-Yukos shareholders $50 billion.

Russia proposes the court had no right to review the case because of the Energy Charter Treaty, which was used as the basis for the review of the case, has never been ratified by Russian Parliament.

The Energy Charter Treaty establishes a multilateral system of rules governing the energy sector. Russia signed the agreement in 1994, but never ratified it. Moscow has agreed to the treaty's provisional application, but does not recognize it above Russian law.

In 2014, the Hague arbitration court ruled that Moscow pay $50 billion in damages for expropriating oil firm Yukos’ assets. Pursuant to the decision, France and Belgium seized property, which the authorities considered to be owned by the Russian state.

In addition, Moscow claims the shares belonging to Yukos’ former owners should not be considered as investments that fall under the protection of the Energy Charter.

Russia considers these investments were made through front companies registered in other countries in violation of Russian law. According to the Kremlin, the dispute should be resolved in a Russian court.

"The fact that the investments were made by Russians in Russia, this makes the Yukos dispute beyond the Energy Charter Treaty," says the attorney representing the Russian state Jan van den Berg.

The case is part of a wider $100 billion legal battle against Russia. In January, Moscow's lawyers overturned a ruling by the Stockholm arbitration tribunal that awarded compensation to Spanish shareholders in the defunct oil company.

The Swedish Court of Appeal ruled the arbitration tribunal has no jurisdiction to adjudicate the claim.

The District Court of The Hague is considering Russia’s appeal on Tuesday.