Russia's constitutional court overturns European ruling on Yukos compensation

By bne IntelliNews January 20, 2017

Russia’s constitutional court has overturned the ruling by the European Court of Human Rights that Moscow should pay €1.9bn in damages awarded to shareholders of the dismantled oil company Yukos, arguing that the decision by the Strasbourg-based tribunal violated the country’s constitution.

The decision comes as significant first move under a law passed in Russia in 2015 allowing it to overrule European human rights court judgements, despite being bound by the European Convention on Human Rights to implement decisions of the Strasbourg court.

“Today’s decision will surprise nobody but confirms what we already know, that the Russian Federation will go to any lengths to undermine the democratic process and democratic institutions,” a spokesman for former Yukos controlling shareholders told the Financial Times.

In April 2016, Russia with the help of a leading US law firm delivered a first blow to former Yukos shareholders by overturning a ruling ordering the country to pay $50bn.

“With the arbitration awards quashed,” the April 20 verdict by a court in The Hague said, “the Russian Federation is no longer liable for paying compensation”.

The surprising victory also impacted previous rulings in France and Belgium that allowed the Yukos shareholders to seize Russian state assets to compensate for their losses when the independent oil company of billionaire Mikhail Khodorkovsky was broken up in 2006.

Yukos was bankrupted and its core assets sold off in suspect auctions (largely to  nascent Russian state oil company Rosneft) after Khodorkovsky fell out with President Vladimir Putin.

Khodorkovsky, arrested on fraud and embezzlement charges in 2004, subsequently jailed and only released in late 2013, has since become a prominent figure of Kremlin opposition in London.

Related Articles

Russia’s central bank reduces key rate in surprise decision

The Central Bank of Russia (CBR) reduced the key lending rate by 0.25 percentage points to 9.75% on March 24, despite broad market expectations of no change this month. The ruble strengthened to a ... more

Ex-Trump aide Manafort reported to be long-term Putin lobbyist

Paul Manafort, US President Donald Trump's former election campaign manager, struck a covert deal with Kremlin-affiliated Russian oligarch Oleg Deripaska in 2006 to promote the interests of President ... more

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss