Ruined Yukos seeks billions from Russia at rights court |
Former Yukos bosses and stakeholders asked the court to award them 98 billion dollars in compensation (72 billion euros), the largest sum ever sought in a case before the European Court of Human Rights.
Their lawyers contended the Russian state acted illegally when it unleashed a barrage of measures against what was then Russia‘s biggest company, starting with injunctions in 2000 and culminating with the firm‘s liquidation in 2007.
Yukos founder Mikhail Khodorkovsky, formerly Russia‘s richest man, is serving an eight-year sentence for a fraud and tax evasion conviction in 2005 but his legal troubles appear far from over.
”This was an expropriation by any other name,” Yukos lawyer Piers Gardner told the court in Strasbourg at the opening of the one-day hearing.
It was the first time in the decade-long saga that Yukos and Russian lawyers met face-to-face in an independent court, whose ruling will be binding on Russia as a member country.
The seven-judge panel began deliberations almost immediately after the hearing and is expected to deliver a ruling later this year.
”Yukos‘ contention is that it fulfilled its responsibilities and paid its taxes just as any other taxpayer would,” Gardner told a news conference following the brief, three-hour hearing.
”At the end of 2003, out of a virtually clear-blue sky, everything changed. There are political elements to this change,” he said.
The lawyer argued that Moscow authorities moved with ”speed and ferocity” against Yukos, seizing assets worth 33 billion euros to settle a tax bill of 2.8 billion euros.
Lawyers for the Russian state retorted that Yukos‘s claim was groundless and urged the rights court to reject it while maintaining Moscow‘s view that the firm was engaged in massive tax fraud in the early 2000s.
Moscow‘s action against Yukos, they argued, was in the public interest.
The court is to decide whether Russia violated Yukos managers‘ rights to property, rights to a fair trial and rights to be shielded from arbitrary legal proceedings, all of which are enshrined in the European convention.
The Yukos case and Khodorkovsky‘s plight have been held up by some critics of the Kremlin as examples of Moscow‘s ruthlessness in dealing with businesses that refuse to toe its line.
Khodorkovsky‘s supporters have long argued that the charges were trumped up to jail the tycoon in revenge for daring to finance the opposition when Prime Minister Vladimir Putin was president.
But Russia insists the businessman and his partners are guilty of massive financial crimes stemming from the controversial privatisation deals of the 1990s.
Founded in 1993, Yukos declared bankruptcy in 2006 and its assets were sold at auction in 2007.
On the eve of the Strasbourg case, Khodorkovsky claimed in an opinion piece published in a Russian newspaper that the justice system was being used to steal property from businessmen.
”Until you‘ve found yourself in the paws of the system, you know nothing about it. The system is essentially a united enterprise whose business is legalised violence,” Khodorkovsky wrote in Nezavisimaya Gazeta daily.
In a related case, the Strasbourg court ruled in 2007 that Russia had violated the rights of Platon Lebedev, Khodorkovsky‘s associate at Yukos, and awarded him 3,000 euros in damage.
Khodorkovsky, 46, has been on trial in Moscow since April on fresh charges of embezzling millions of tons of oil and money laundering that could see him jailed for another two decades.
Both Khodorkovsky and Lebedev have served jail time in the bleak Siberian province of Chita.
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