Oil and gas: Yukos shareholders awarded US$50bn against Russia

United Kingdom

Shareholders that had a collective 70.5% shareholding in Yukos have been awarded US$50 billion in damages against The Russian Federation in three awards published yesterday.

The tribunal was unanimous in finding that The Russian Federation had breached the Energy Charter Treaty by taking steps equivalent to expropriation of the claimants’ investment in Yukos.

The sums awarded amount to one ninth of Russia’s annual federal budget, or approximately 75% of the market capitalisation of Rosneft.

The news is likely to be the first stage in lengthy proceedings relating to the recognition and enforcement of the awards. With the arbitrations seated in The Hague, The Russian Federation will doubtless be investigating its avenues of appeal in the Netherlands. In the interim, the successful claimants will have an eye on the assets of The Russian Federation against which they may seek to enforce the awards.

The full text of the awards is here.