Yukos trial begins in Europe

Mikhail Khodorkovsky

The 'Yukos Vs The Russian Government' trial has made its way to Europe where The European Court of Human Rights will hear a complaint from Yukos founder Mikhail Khodorkovsky about how his company was 'targeted' by the Russian government.

Khodorkovsky was the head of oil giant Yukos before he was arrested in October 2003. He was detained for fraud and tax evasion charges. He and his business partner Platon Lebedev are facing up to 22 years in prison, on charges of embezzlement. Before he was arrested, his wealth was estimated at more than US$15 billion according to Forbes magazine and he was the 16th richest man in the world.

The company was liquidated in 2007

Driven out of business?

Khodorkovsky  has said that Yukos was deliberately 'targeted' by the Russian authorities due to his constant clashes with former President Putin, his support of liberal opposition and possibly failing to 'toe the Kremlin line.'

Over the past few months, Group Menatep, the Yukos holding company, have accused Moscow of expropriating Yukos via a series of asset sales that saw the state-owned Rosneft take Yukos' title as the country's biggest oil producer.

In December, it appeared the group were making headway against the government when they stated that had won a ruling that will allow them to seek up to US$100 billion in damages from the Russian government, ever since the state's takeover of the company five years ago.

Menatep was suing the Russian government under article 45 of the energy charter, which protects investors against expropriations of assets by a state. Moscow had tried to bring forward their own version of the charter, but an international tribunal in The Hague stated that Moscow was bound by the terms of the Energy Charter Treaty, despite the fact that the Russian parliament has yet to ratify it.

Whether this latest stage in the battle will see Khodorkovsky and his 'team' win full compensation remains to be seen but they have a lot to fight for. Tim Osbourne, director of Menatep, was the biggest shareholder in Yukos with a US$25 billion stake before the company was taken over. When that happened, the stake became worthless after the Russian authorities froze the assets of all Yukos's major shareholders.

Like I said, a lot to fight for....

Relevant articles:

Khodorkovsky: "Forget oil" | Yukos Vs The Russian government | Is Russia oil wealth falling?

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