Yukos fails in bid to block Rosneft float

Shares in Rosneft, the Russian oil giant, will start trading on the London Stock Exchange this morning after a High Court attempt to block the flotation failed yesterday.

Lawyers acting for another Russian oil company, Yukos, had asked the court to suspend the listing on the grounds that Rosneft's main production asset, Yuganskneftegaz, was stolen from its shareholders.

But Mr Justice Charles refused to grant a judicial review of the decision by the Financial Services Authority and the LSE to allow the listing to go ahead.

Yukos had argued that permitting the listing to proceed would be tantamount to sanctioning the "laundering" of illegally acquired assets under the UK's Proceeds of Crime Act. But the judge accepted Rosneft's argument that technically the seizure of Yukos's assets was an "act of state" by the Russian Federation which took precedence over UK law. The judge also made it clear that, had he allowed a review,he would not have granted Yukos an injunction to delay the start of share trading today while the case was heard.

Yukos said it was considering whether to go to the Court of Appeal. In any event, it will continue its claim against Rosneft and the Kremlin through the European Court of Human Rights.

A Yukos spokeswoman said: "The case was decided on a technical point of law and expressly did not address the theft of an asset which we remain convinced was stolen."

Rosneft shares have been priced at $7.55, towards the top end of the indicative range. This values the company at $80bn (£44bn) and will enable the listing to raise $10.4bn.