Unfair handling
September 20, 2011
The Strasbourg-based European Court of Human Rights (ECHR) condemned the Russian government on Tuesday for its treatment of the now defunct oil company Yukos.
The court faulted Moscow for unfairness in its handling of the 2006 bankruptcy and its jailing of former Yukos executives, including former CEO Mikhail Khodorkovsky.
The court did not find that the government had misused legal proceedings to destroy Yukos and did not rule on the issue of compensation. Yukos management had asked for 72 billion euros ($98 billion) in damages, the largest amount the court has ever dealt with.
Lawyers for the oil giant claimed Russian authorities illegally targeted Yukos over tax fraud, that their inquiries into its tax burden were irregular and that the company's right to a fair hearing was not honored.
The ruling comes after a legal battle that began eight years ago, when the authorities accused Yukos of creating shell companies to avoid paying taxes and declared it insolvent in 2006. Khodorkovsky and his business partner, Platon Lebedev, were convicted in 2003 and sentenced to 13 years in prison.
Yukos was founded in 1993 by the Russian government. Its privatization in the mid-1990s was led by Khodorkovsky, who became Russia's richest man in the process.
Putin's prisoner?
Critics have repeatedly said Khodorkovsky was a prisoner of then-Russian President Vladimir Putin's regime and that he was only convicted because, unlike other oligarchs, he did not toe the government's line.
The verdict could be a huge embarrassment to the Kremlin and reinforce investors' reticence towards doing business in Russia.
Russia is no stranger to the ECHR; the court deals with more cases involving Russia than any other country and has repeatedly found the country in breach of the European Convention on Human Rights.
In May, the court ruled in a separate case that Russia violated Khorkovsky's rights during his arrest in 2003 and subsequent detention, but it stopped short of calling his arrest politically motivated.
Author: Holly Fox, Nicole Goebel (AP, AFP, Reuters)
Editor: Martin Kuebler