Promneftstroy ruled not a shareholder in Yukos Finance B.V.

18.11.2010 The Amsterdam Appeals Court today ruled that Promneftstroy had not become a shareholder in Yukos Finance B.V., rejecting the Russian bankruptcy trustee’s claim that Promneftstroy had acquired shares in an auction held by the Russian administrator.

The Appeals Court also announced it was deferring its decision on the wider Yukos Finance case until after the European Court of Human Rights had delivered its ruling on the long-running legal affair.

Commenting on the rejection of Promneftstroy’s claim, the joint managing director of Yukos Finance and former CFO of YUKOS Oil Company, Bruce Misamore, said: “We have always maintained that the Russian bankruptcy administrator had no authority to transfer the shares of a Dutch company, Yukos Finance B.V., and are pleased that the Court agreed. We are very happy with this element of the decision today”.

Commenting on the deferment, a spokesperson for Yukos Finance, Claire Davidson, said: “The hearing at the European Court of Human Rights occurred only recently, so it only makes sense that the Dutch courts would adjourn until that decision is made. It is however clear that the weight of judicial opinion in the Netherlands, and around the world, has always firmly supported the contention that the bankruptcy of YUKOS Oil Company in Russia was anything but legitimate. We therefore look forward to the decision from the European Court and have every confidence in a fair, reasonable and independent ruling.”

The Amsterdam District Court ruled in October 2007 that the bankruptcy of YUKOS Oil Company would not be recognised in the Netherlands, because the original bankruptcy proceedings in Russia did not follow due order of process, and were therefore in violation of Dutch public order.

In the summer of 2007, the Russian administrator purported to sell the shareholding of Yukos Finance B.V. to Promneftstroy. This transaction was not addressed in the 2007 ruling. However the decision today categorically rejected that Promneftstroy, who were represented by law firm Clifford Chance, had any claim whatsoever to Yukos Finance shares. This is a significant development and likely a terminal blow against Promneftstroy’s legal efforts.

Bruce Misamore further stated: “Once again, the Dutch courts have ruled on the side of judicial independence and the rule of law. This was not YUKOS Oil Company’s experience in Russia. The management of Yukos Finance has steadfastly adhered to a difficult and long-term strategy of ensuring justice is finally done for Yukos stakeholders in the face of unrelenting attacks by the Russian government. The ruling today means that Dutch assets will continue to be protected from expropriation by Russia. The ruling also makes it apparent to everyone in the world that the real thieves in this case are not Mikhail Khodorkovsky and Platon Lebedev, currently on trial in a political farce in Russia, but rather Vladimir Putin and the Russian Federation.”