Rivals both claim win over Yukos decision

Nataliya Vasilyeva
Tuesday 20 September 2011 22:06 BST

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Louise Thomas

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Russia violated the rights of the now-defunct oil behemoth Yukos, the European Court of Human Rights ruled yesterday. But the court rejected a contention that the prosecution of Yukos was politically motivated and deferred any ruling on nearly $100bn (£63bn) in damages.

The authorities were unfair in meting out punishment to the company over tax violations and didn't give Yukos enough time to prepare its defence, according to the ruling from the court in Strasbourg. The ruling is open for a months-long appeal process available to both sides.

Yukos sought $98bn in damages, the largest claim in the court's 50-year history and one of Russia's biggest legal challenges to date. The company – a major Russian taxpayer whose primary subsidiary once produced as much oil as all of Libya – was dismantled by Russian authorities after the 2003 arrest of its founder and owner, Mikhail Khodorkovsky. His supporters say then-President Vladimir Putin's Kremlin mounted an orchestrated effort to destroy a tycoon seen as a threat to Mr Putin's rule.

The European court found the question of damages "is not ready for decision" and gave both parties three months to reach a settlement. If they don't, the court will rule later on whether to order any damages.

The court's nine-judge panel found that Russia violated three articles of the European Convention on Human Rights, including the right to a fair trial. The court also found the enforcement proceedings were disproportionate. The court, however, denied an allegation that Russia misused legal procedures to dismantle Yukos.

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