French victory for YUKOS

On 5 November 2014, the Supreme Court of France overturned a ruling of the Paris Appellate Court, deciding in favor of Yukos Capital in a lawsuit against Tomskneft, a subsidiary of Rosneft, and requiring Tomskneft to pay Yukos RUB 7.2 billion, in addition to court costs.  The decision took effect immediately, and the French authorities may force compliance.

The original decision was the result of a 2010 case in which a court in Paris ordered Tomskneft to pay Yukos Capital RUB 7.2 billion.  Artur Zurabyan, the head of the International Arbitration and Dispute Resolution Practice at ART DE LEX, explained that, given the recent ruling of the Supreme Court of France, the decision of that first court to hear the case now is in force.

In 2006, Yukos Capital initiated legal proceedings against Yuganskneftegaz, Samaraneftegaz, and Tomskneft, all parts of Yukos at the time and now subsidiaries of Rosneft, accusing them of defaulting on nine loans.  In February 2007, an arbitration proceeding, which followed the rules of the International Chamber of Commerce, required Tomskneft to pay Yukos RUB 4.35 as well as interest and penalties for a total of more than RUB 7.2 million.  After Yukos went bankrupt, Rosneft purchased Tomskneft, and at the end of December 2007, Gazprom Neft purchased 50 percent of Tomskneft’s shares.  

According to Dmitry Magonya, the managing partner of the ART DE LEX law firm, an arbitration court cannot issue writs of execution, which only a state court can do.  The Russian courts refused to do so, which is why, in July 2010, Yukos appealed to the court in Paris.  Yukos Capital also began lawsuits against Tomskneft in a court in Ireland, which, in March 2014, claimed no jurisdiction in the case, and a Singapore court, which has not yet begun any proceedings.

“The arbitration award may be executed in any country where the claimant finds the property of debtor and applies in court to enforce the decision,” stated the managing partner of ART DE LEX, Dmitry Magonya.  Tomskneft’s property is the major target, he noted, but Yukos Capital may attempt to foreclose on the property of Tomskneft’s parent company, Rosneft.