Yukos shareholders awarded US$51 billion from Russia by Hague arbitration court

The Hague's arbitration court has ruled that Russia must pay a group of shareholders in oil giant Yukos US$51.6 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.

The arbitration panel in the Netherlands said it had awarded shareholders in the GML group just under half of their US$114 billion claim, going some way to covering the money they lost when the Kremlin seized Yukos, once controlled by Mikhail Khodorkovsky (pictured).

"The award is a slam dunk. It is for US$50 billion, and that cannot be disputed," said Tim Osborne, director of GML. "It's now a question of enforcing it."

But Foreign Minister Sergey Lavrov said Moscow would probably appeal against the decision, so shareholders, who have battled through the courts for a decade, might have longer to wait.

"The Russian side, those agencies which represent Russia in this process, will no doubt use all available legal possibilities to defend its position," he said when news of the award leaked ahead of the official announcement yesterday. Lawyers, however, said there were only limited grounds on which to appeal.

The panel of judges, which has been reviewing the case since 2005, concluded that officials under President Vladimir Putin had manipulated the legal system to bankrupt Yukos.

"Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction," the court said. "The primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets."