UK court paves way for ruling on Russian immunity in $50 billion Yukos award

By Sam Tobin

LONDON (Reuters) – London’s High Court on Wednesday lifted a temporary block on a case brought by former investors in defunct oil group Yukos seeking to enforce a $50 billion arbitration award against Russia in Britain.

Judge Christopher Butcher ruled that the High Court could lift the so-called stay, which was imposed in 2016 while Russia challenged the arbitration award in the Netherlands, to hear a Russian claim of state immunity in London after the Dutch Supreme Court rejected a jurisdictional challenge in 2021.

The three former Yukos shareholders – Hulley Enterprises, Yukos Universal and Veteran Petroleum – were awarded a little more than $50 billion by an arbitration tribunal in the Hague in 2014 and have attempted to enforce it in Britain, the United States and the Netherlands.

The figure has since grown with interest to more than $57 billion.

Their lawyers also argued this month that the international response to Russia’s invasion of Ukraine “makes it far more likely” that the country will withdraw assets from Britain, meaning the court should lift the block on enforcing the award.

The High Court is expected to hold another hearing in October 2023, at which the former shareholders will argue that Russia cannot claim state immunity as the Dutch courts have already ruled against Russia on that issue.

The Russian embassy in London did not immediately respond to a request for comment.

Tim Osborne, CEO of the GML shareholder group that held about 70% of the shares in Yukos through its subsidiaries, said in a statement that the ruling was “everything we hoped for because this ruling proves that Russia cannot escape accountability in the West for its crimes”.

He added: “We will now go full steam ahead with getting the more than 50 billion dollar damage claim recognised so we can start enforcement against Russian state assets in England and Wales.”

(Reporting by Sam Tobin; Writing by Sachin Ravikumar; Editing by Alexander Smith and David Goodman)