Russia ordered to pay $50 billion for destroying oil company

AP/Fuel Fix:

An international court on Monday ordered Russia to pay more than $50 billion to the former majority shareholders of now defunct oil company Yukos, ruling that the state engaged in a ruthless campaign to destroy what was once the country’s biggest oil producer.

In one of the biggest such cases ever, the Permanent Court for Arbitration in the Hague, Netherlands, determined Russia was not acting in good faith to collect taxes when it leveled massive claims against Yukos in 2003, even though some of the company’s tax arrangements might have been questionable. The tax case led to the imprisonment of Yukos CEO Mikhail Khodorkovsky and has been widely seen as retaliation for his support of opposition political parties.

The state took advantage of the tax claims “by launching a full assault on Yukos and its beneficial owners in order to bankrupt Yukos and appropriate its assets while, at the same time, removing Mr. Khodorkovsky from the political arena,” the court said.

The ruling adds to tensions between Russia and the international community at a time when relations are at their lowest ebb since the end of the Cold War. Following the downing of Malaysia Airlines Flight 17 over eastern Ukraine, the U.S. and European Union are debating further economic sanctions against Moscow because of its support for rebels suspected of launching the attack.

The amount of damages, although half as much as originally claimed, is still colossal, even for a nation with the vast oil and mineral wealth like Russia. It is nearly as much as Russia spent on the 2014 Winter Games in Sochi, the most expensive Olympics in history.
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It appears to be another example of how ruthless the Russian government is under Putin.  Fighting the arbitration ruling will be difficult for Russia, although their foreign minister has said the fight will go on.  Their next fight will be when the winners try to collect their award.  It may put some of their foreign assets at risk.