European court rules Russia must pay Yukos shareholders 1.9 billion euros

Thu Jul 31, 2014 7:42am EDT
 
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By Megan Davies, Vladimir Soldatkin and Gilbert Reilhac

MOSCOW/STRASBOURG (Reuters) - Europe's top human rights court awarded shareholders in Yukos 1.9 billion euros ($2.6 billion) in damages on Thursday, a new blow to Russia days after some of the former oil company's shareholders won $50 billion in The Hague.

The Strasbourg-based court found that Russia had failed to "strike a fair balance" in its treatment of Yukos, once run by former oligarch Mikhail Khodorkovsky, and had forced the company to pay excessive fees.

While the 1.9 billion euros awarded by the European Court of Human Rights (ECHR) is a fraction of the 38 billion euros which Yukos sought, it hits Russia hard at a time when the country is on the brink of recession and is reeling from tougher sanctions imposed by the West this week over its actions in Ukraine.

"We received the news with a great joy, this is an unprecedented decision, the court has never ever awarded such a big sum," said Olga Pispanen, a spokeswoman for Khodorkovsky, who was arrested at gunpoint in 2003 and convicted of theft and tax evasion in 2005.

He was released last year after 10 years in prison.

Yukos, once worth $40 billion, was broken up and nationalized a decade ago, with most of its assets handed to Rosneft (ROSN.MM: Quote), an energy giant run by an ally of President Vladimir Putin.

Russia's Justice Ministry said the ECHR ruling was unfair and biased and said it could appeal within three months.

The court also ruled Russia should pay 300,000 euros in costs and expenses, plus any tax. Yukos had requested 4.3 million pounds ($7.3 million) in legal fees, $174,000 for costs of an expert report and $588,148 for other fees.   Continued...

 
People walk by the Yukos oil company headquarters in Moscow in this July 8, 2004 file photo. REUTERS/Viktor Korotayev/Files