Tags: EU | France | Yukos

Yukos Tells Court: Russia Sought to Destroy Us

Thursday, 04 March 2010 09:22 AM

The Russian government deliberately sought to "destroy" the now-defunct oil giant Yukos, a lawyer for the company argued Thursday before the European Court of Human Rights.

Thursday's long-awaited hearing marked a milestone in Yukos' efforts to win acknowledgment that the Russian government's actions against it were "unlawful, disproportionate, arbitrary and discriminatory, and amounted to disguised expropriation" of the company.

It was the first time since Yukos' claim against Russia was filed six years ago that the two sides have presented arguments face-to-face in the court, which deals with violations of the 1950 European Convention on Human Rights.

Russian authorities had accused Yukos of shady deals and using shell companies to hide revenue from tax authorities. Yukos founder Mikhail Khodorkovsky, who is in prison in Moscow, has claimed Russian authorities illegally drove the company out of business.

Russian authorities began pursuing Yukos in 2002. Through the courts, they ultimately froze its assets, forced it to sell its shares in other companies and declared it insolvent in 2006 before the company was finally liquidated a year later.

Khodorkovsky, once Russia's richest man, founded the company in the chaotic years that followed the 1991 Soviet collapse. He was convicted on charges of fraud and tax evasion and has been imprisoned since 2003.

Critics call him a political prisoner, a powerful oligarch arrested for daring to become involved in politics when then-President Vladimir Putin was in power.

The European court agreed to examine Yukos' complaints of irregularities in the Russian authorities' proceedings on its tax liability, the unlawfulness and size of the tax assessment and the forced sale of Yukos' main production unit Yuganskneftegaz, among other complaints.

The nine-judge panel was to begin deliberations later Thursday, but a decision is not expected for months.

Piers Gardner, representing Yukos, defended the way the company had handled its tax payments in Russia.

"Nothing was secret, nothing was hidden and nothing was wrong with these arrangements," Gardner said in his 90-minute pleading, adding that Russian authorities' "aim was to destroy Yukos."

Lawyer Michael Swainston, representing the Russian government, argued that the court can only accept cases concerning individuals instead of companies and said the case should be dismissed.

"This case should not be entertained by this court at all," Swainston said. He defended the Russian government's actions, saying Yukos had committed massive tax fraud and that the orders to freeze Yukos' assets had been "limited in scope."

Fearful it would never get a fair hearing in a Russian court, Yukos representatives filed their complaint with the European court in April 2004, claiming the company was "targeted by the Russian authorities with tax and enforcement proceedings, which eventually led to its liquidation."

Yukos has submitted a claim for $98 billion in damages.

Rulings of the European Court of Human Rights are binding on all its member countries. The Council of Europe monitors the execution of judgments, particularly to ensure payment of the amounts awarded by the Court.

In the past, the rulings have obliged governments to amend legislation and administrative practice in many fields.

The treatment of both Khodorkovsky and his company have continued to dog the Kremlin even as President Dmitry Medvedev, a lawyer, says that Russia must press forward with judicial reforms that enhance the rule of law.

Russian citizens long have seen the European court as a place they could get a hearing. Nearly one-third of the current 119,300 applications to the court are from Russia. Of the court's 862 judgments concerning Russia, the Court found violations of the human rights convention in 815 of them.

As a result, Russian authorities have been hostile to the Court's work. Recently, however, Russia has moved to ease that stance. In January, Russian lawmakers ratified an international agreement to strengthen and speed up the work of the court after years of refusing to do so.

In Moscow, anti-government protesters gathered Thursday at a courthouse that was holding a trial in a second case against Khodorkovsky.

"Maybe there (in Strasbourg) it will be a fair trial, a just trial. I have high hopes for the Strasbourg court, it has a good reputation as opposed to our courts. Our courts have bad reputation," protester Dmitry Sotnikov told AP Television News.

However, Russian human right lawyer Karinna Moskalenko, who attended Thursday's hearing in Moscow, said she didn't think the Strasbourg proceedings were "relevant" to or would have an impact on Khodorkovsky's legal struggles inside Russia.

Late last year, the Russian Supreme Court agreed with the European court's earlier judgment that the 2003 arrest of one of Khodorkovsky's business partners was illegal. Despite that, Russian authorities still have not released businessman Platon Lebedev.

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The Russian government deliberately sought to destroy the now-defunct oil giant Yukos, a lawyer for the company argued Thursday before the European Court of Human Rights.Thursday's long-awaited hearing marked a milestone in Yukos' efforts to win acknowledgment that the...
Thursday, 04 March 2010 09:22 AM
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