- A court decision awards $50 billion to now-defunct Russian oil giant Yukos' former shareholders
- The case has been rumbling for almost a decade, after Yukos assets were expropriate by the state
- The win is seen as a blow to Russian President Vladimir Putin, whose relations with the West are strained
The brand name Yukos no longer exists and its former founder Mikhail Khodorkovsky has left Russia after being freed from jail, but a landmark ruling in the Hague released Monday ensures their legacy will live on during a sensitive period of time for Vladimir Putin.
Yukos was one of Russia's oil giants through the 1990s and until the early 2000s, when its assets were expropriated by the state after a political battle with Khodorkovsky.
Now the Permanent Court of Arbitration, in what is considered a landmark judgment, has ordered payment of damages to its former shareholders, totaling $50 billion and including interest and fees for violation of a treaty covering Russia's energy assets.
This case goes back to 2005 and strikes at the heart of Putin's tactics to strip Yukos and Khordorkovsky under charges of tax evasion.
The three judge panel called the Federation's move "equivalent of expropriation of claimants' investments." Those claimants, representing Group Menatep Ltd. or GML, include former Yukos CEO Platon Lebedev and four others who were seeking damages of up to $114 billion.
The main asset of Yukos, known as Yuganskneftegaz, was auctioned in late 2004 for just $9.3 billion and purchased by state-run Rosneft, which is now run by Putin confidant Igor Sechin.
The Russian president has big plans for Rosneft to be one of the top energy players in the world. It now has an enterprise value of $115 billion, but that is just a start with agreements signed with Exxon-Mobil, ENI of Italy and its largest shareholder BP, which has a 20% stake in the group.
Rosneft holds the position that it did not participate in the arbitrations and therefore is not bound by the rulings. In a statement it said, "Rosneft believes that all of its purchases of former Yukos assets, and all other actions taken by it with respect to Yukos were entirely lawful and proper applicable law."
The response from Russia's Foreign Minister Sergei Lavrov during a press conference Monday was equally unforgiving about the actions taken.
"The process is not over; appellations are allowed," Lavrov said. "The Russian side, as well as agencies representing Russia in this trial will use all available legal possibilities to defend their stance."
This ruling comes as Moscow faces intense scrutiny for its support of the ongoing fight by pro-Russian rebels in eastern Ukraine. Another round of European Union economic sanctions are pending after Washington proceeded to tighten the noose earlier this month.
Khodorkovsky was not part of this case, but an attorney who represented the former oligarch during his trial on charges by the Russian state said the ruling serves as a partial vindication for his former client.
According to Robert Amsterdam, "this is a very important decision to be read by all those who lose assets to autocrats." The arbitrators, he said, had "very heroically" cut through "mistruths" to find in favor of the claimants.
This ruling could not only influence Western-led sanctions on Moscow, but could potentially strain talks to find common ground between Russia, Ukraine and the European Union over future gas supplies into Europe.