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ECHR judge says Russia has grounds to contest ruling on Yukos

A judge of the European Court of Human Rights (ECHR) said on Thursday that Russia had grounds to contest the Hague arbitration court ruling on Yukos.

"I believe there are such grounds since the court made a serious deviation from its case law, failing to provide fairly convincing arguments," ECHR Ad Hoc Judge Andrei Bushuyev, who is head of the Department of Commercial Law at the St. Petersburg State University, said.

"At any rate, it is up to the sides to decide whether to contest [the ruling] or not," he added.

Bushuyev was a member of the ECHR panel of judges that examined the YUKOS lawsuit against Russia.

The Hague Permanent Court of Arbitration earlier this week ordered Russia to pay $50.085 billion in compensation to former YUKOS shareholders after examining three lawsuits filed by former stakeholders who had jointly demanded $103 billion.

The court ruled that Russia's actions against YUKOS could be regarded as expropriation of investments in breach of Article 45 of the Energy Charter which Russia had signed in the 1990 but never ratified.

The biggest sum, $39.97 billion, is to be paid to the Cypriot offshore company Hulley Enterprises Limited related to YUKOS former shareholder Group Menatep Limited (subsequently renamed GML).

The sum of $8.20 billion was awarded to another Cypriot company, Veteran Petroleum, which had acted as a pension fund for the YUKOS employees.

Compensation to Man-registered Yukos Universal Limited is $1.85 billion.

Russia will also have to compensate the complainants for their legal expenses in the amount of $64 million within 180 days (until January 15, 2015). If the money is not paid within this period, interest will be charged initially at a rate matching the return on the 10-year U.S. Treasury bonds as of January 15, 2015 and then every year on the corresponding date.

The lawsuit from GML, which had held more than 50% of YUKOS shares before the company's bankruptcy, was filed in 2007. The initial sum claimed was $28.3 billion, which later increased to $103 billion.

Yukos founder Mikhail Khodorkovsky owned 70% of GML shares until 2003. After his arrest he transferred the shares to his business partner Leonid Nevzlin. Apart from Nevzlin, other major GML stakeholders are Platon Lebedev, Mikhail Budno, Vladimir Dubov, and Vasily Shakhnovsky (each holding 7.3-8.6% of shares).

[Source: Itar Tass, Moscow, 31Jul14]

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