THE HAGUE: A Dutch court on Wednesday quashed a 2014 ruling by an international tribunal which had ordered Russia to pay $50 billion in damages to the former shareholders of the bankrupt Yukos oil company.
The Hague district court ruled the Permanent Court of Arbitration was "not competent" to rule in the matter and therefore "the Russian Federation is no longer liable for paying compensation to these parties."
"The Hague District Court has reversed the awards of the international arbitrators on the grounds that they lacked jurisdiction to arbitrate the cases," it added in its written decision.
Yukos was once Russia's biggest oil company but was broken up after Kremlin critic and ex-tycoon Mikhail Khodorkovsky was arrested in 2003.
His arrest had come shortly after President Vladimir Putin warned Russia's growing class of oligarchs against meddling in politics.
Yukos was sold off in opaque auctions to state companies led by Rosneft between 2004 and 2006. State-owned Rosneft was then small but has become a leading global player among the world's biggest listed oil companies by production volume.
The Permanent Court of Arbitration ruled in 2014 that Russia had forced Yukos into bankruptcy with excessive tax claims and sold off its assets to state-owned companies.
It ruled unanimously that the international tribunal had expropriated the claimants' assets, ordering Moscow to pay in "excess of $50 billion" to the former shareholders.
But Moscow has long fought the award, and a Russian official hailed Wednesday's ruling by the district court in The Hague.
"Our case about the arbitration in The Hague has been totally satisfied," the unnamed official told reporters by telephone.
"Today's decision means that the order demanding Russia pay several billions in compensation has been annulled."
The former shareholders are demanding that the Russian government cover their massive losses, blaming Moscow for driving Yukos into liquidation for political reasons before taking it over.
In a legal game of cat-and-mouse, the claimants led by GML, the main shareholder, have lodged cases in various European courts seeking the seizure of Russian assets abroad after Moscow refused to pay out.
Khodorkovsky, who is no longer a stakeholder, spent a decade in prison on charges of tax evasion, fraud and embezzlement which he and his supporters say were trumped up in revenge for his political ambitions.
He was suddenly pardoned by Putin in 2013 and flown out of the country.
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