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Image courtesy of Ilya Voyager/ Wikimedia Commons.

A court in The Hague ruled that the Russian government owes shareholders of the defunct Moscow-based oil company Yukos US$50 billion in compensation for seizing the company in 2004, the Wall Street Journal reported Monday.

The award by the Permanent Court of Arbitration is the largest judgment ever by the court.

The $50 billion in compensation is only about half the amount shareholders sought.

The arbitration panel based the compensation on Yukos’ value in 2003, when the Russian government began taking steps to seize the company.

In 2004, the company was hit with tens of billions of dollars in back-tax claims.

Yukos declared bankruptcy in 2006 and its main assets were liquidated and sold to state-controlled Russian companies.

Russian officials maintained that the Yukus seizure was purely a tax matter. However, the move was widely seen as a politically motivated attack on Yukos’s CEO Mikhail Khodorkovsky.

Khodokovsky and his business partner, Platon Lebedev, were jailed on charges of fraud and tax evasion in 2003.

Khodorkovsky served nine years in prison before receiving a pardon from Russian president Vladimir Putin.

“It is fantastic that the company shareholders are being given a chance to recover their damages,” Khodorkovsky told the Wall Street Journal.

The Russian finance ministry said it would appeal and called the settlement “seriously flawed” and “politically biased,
the Wall Street Journal said.

Lawyers said the appeal could take many years and ultimately recovering the award may prove challenging.

Yukos’ management filed a separate expropriation claim in the European Court of Human Rights on behalf of minority shareholders worth up $38 billion, Wall Street Journal said.

A ruling on that suit is expected Thursday.