Today the ECHR delivered its Chamber judgment in the YUKOS case. The Court held that the proceedings against YUKOS were not politically motivated and that YUKOS was not treated differently from other companies, however, it found that the Russian government had violated YUKOS’ rights under Article 6 of the Convention and Article 1 Protocol No. 1 to the Convention.
The Court held:
1. By six votes to one that there had been a violation of Article 6 § 1 and 3 (b) (right to a fair trial) of the Convention as regards the 2000 Tax Assessment proceedings on account of the insufficient time available to the applicant company for preparation of the case at first instance and on appeal;
2. By four votes to three that there had been a violation of Article 1 of Protocol No. 1 (protection of property) on account of the 2000-2001 Tax Assessments in the part relating to the imposition and calculation of penalties;
3. Unanimously that there has been no violation of Article 1 of Protocol No. 1 as regards the rest of the 2000-2003 Tax Assessments;
4. Unanimously that there has been no violation of Article 14 (prohibition of discrimination) of the Convention, taken in conjunction with Article 1 of Protocol No. 1, concerning whether YUKOS has been treated differently from other companies;
5. By five votes to two that there has been a violation of YUKOS’ rights under Article 1 of Protocol No. 1 in the enforcement proceedings against it in that the domestic authorities failed to strike a fair balance between the legitimate aim of these proceedings and the measures employed;
6. Unanimously that there has been no violation of Article 18 (limitation on use of restriction on rights), taken in conjunction with Article 1 of Protocol No. 1, concerning whether the Russian authorities had misused the legal proceedings to destroy YUKOS and seize its assets;
7. Unanimously that the question of the application of Article 41 (just satisfaction) is not ready for decision and reserves the said question in whole.
The judgment is not final since, pursuant to Articles 43 and 44 of the Convention, any party may request, during the three-month period following the delivery of the judgment, that the case be referred to the Grand Chamber of the Court for further examination.
[See the full text of the Court’s judgment and webcast of the hearings in the YUKOS case. My detailed analysis of the Court's judgment will follow later.]
Opinions regarding the Court’s judgment
Russian Government officials:
Russia's envoy to the court, Georgy Matyushkin, told the Interfax news agency he was "satisfied with the ruling overall".
In his interview with the Voice of Russia, Mikhail Barshchevsky, the Kremlin representative at Russian high courts, called the judgment as a “colossal victory” for Russia. He said:
YUKOS expected the European Court to uphold its claims that the company had suffered politically-motivated discrimination. Few would deny the ECHR ruling about the absence of political motives in the “YUKOS affair” is an indisputable victory for Russia. One cannot but agree with this.
Andrei Fyodorov, a Deputy Minister of Justice of the Russian Federation, in his interview with Reuters news agency, quoted by BBC, said the ruling was a blow for the firm's former managers. He pointed out:
I am convinced that our opponents did not expect this. I am sure they expected a crushing decision that would grind Russia into dust and that they would be awarded $100bn and that they can run off to drink coffee... It is a very big blow for them.
Russian representative at the Parliamentary Assembly:
According to the Voice of Russia, Dmitry Vyatkin, a Russian Member of Parliament at the Parliamentary Assembly of the Council of Europe, said that it dashed former Yukos shareholders’ hopes for compensation. He also noted:
The Strasbourg Court upheld what was absolutely evident, namely that the Yukos case is not about politics.
YUKOS representatives:
YUKOS’ former chief financial officer, Bruce Misamore, commenting on the Court’s judgment said:
YUKOS brought this application to the Court because it was denied a fair hearing in Russia. The Court has vindicated YUKOS' position. For example, the ECHR confirmed that the Russian tax proceedings were unfair finding that the limited period given to YUKOS to have access to the case material was ridiculously short, however many lawyers YUKOS might have been able to deploy.
Bruce Misamore, also pointed out that the ruling about political motivation was "the least of the concerns".
As RIA Novosti reports, Steven Theede, former chief executive officer of Yukos Oil Company said:
The Court found the crux of the case was the speed with which the Russian authorities demanded that YUKOS pay the taxes, despite the fact its assets were frozen, and the decision to choose to 'auction' OAO Yuganskneftegaz, its main production unit, to meet the asserted liabilities. The Court found it 'obvious' that the choice of auctioning OAO Yuganskneftegaz as the 'first disposal' was a 'fatal blow to YUKOS' ability to survive the tax claims and continue its existence.
According to Gardian, Theede also said the ruling that enforcement procedures were disproportionate was key because all of the factors that led to the dismantling of YUKOS "were brought about by enforcement procedures".
Human rights activists:
Lyudmila Alexeyeva, the head of the Moscow Helsinki Group, told RIA Novosti she hoped a future ECHR judgment would be "in YUKOS’ favor." She also noted:
To me, it's evident the case was politically motivated. YUKOS paid its tax honestly.
Press:
The Lawyer magazine considers the Court’s judgment to be a major victory for YUKOS praising YUKOS lawyer Mr. Gardner. Thus, in her article Katy Dowell points out that:
Monckton Chambers’ Piers Gardner has won a major victory for the now defunct oil giant YUKOS after the European Court of Human Rights ruled that the Russian government had breached its rights.
The Guardian is of an opinion that “the finding could still embarrass Russia and hurt its efforts to win back international investors scared off by YUKOS and other legal cases in recent years.”
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