* Russia failed to "strike a fair balance" in case
* Khodorkovsky welcomes "unprecedented" decision
* Over 55,000 Yukos shareholders could receive compensation
* Russia says could appeal
(Adds ex-Yukos CFO comments)
By Megan Davies, Vladimir Soldatkin and Gilbert Reilhac
MOSCOW/STRASBOURG, July 31 Europe's top human
rights court awarded shareholders in Yukos 1.9 billion euros
($2.6 billion) in damages on Thursday, a new blow to Russia days
after some of the former oil company's shareholders won $50
billion in The Hague.
The Strasbourg-based court found that Russia had failed to
"strike a fair balance" in its treatment of Yukos, once run by
former oligarch turned Kremlin critic Mikhail Khodorkovsky, and
had forced the company to pay excessive fees.
Yukos, once worth $40 billion, was broken up and
nationalised a decade ago, with most of its assets eventually
handed to Rosneft, an energy giant run by an ally of
President Vladimir Putin.
Yukos had argued in the European Court of Human Rights that
Russia had unlawfully seized it after imposing bogus taxes and
via a sham auction.
The court's decision goes some way to supporting critics of
Putin who blame the Russian leader for riding roughshod over the
rule of law for political aims.
And while the 1.9 billion euros awarded by the ECHR is a
fraction of the 38 billion euros which Yukos sought, it hits
Russia hard at a time when the country is on the brink of
recession and is reeling from tougher sanctions imposed by the
West this week over its actions in Ukraine.
"We received the news with a great joy, this is an
unprecedented decision, the court has never ever awarded such a
big sum," said Olga Pispanen, a spokeswoman for Khodorkovsky,
who was arrested at gunpoint in 2003 and convicted of theft and
tax evasion in 2005.
He was released last year after 10 years in prison.
Bruce Misamore, former chief executive officer of Yukos,
welcomed what he described as "substantial damages for the
Russian Federation's illegal, unfair, hasty enforcement
measures, including fines and bailiffs charges, which resulted
in the destruction of Yukos".
He said more than 55,000 Yukos shareholders stood to receive
compensation from Russia, adding: "This is a real step forward
but in no way reflects the true damages suffered by the victims
of the destruction of Yukos by the Russian Federation."
Russia's Justice Ministry said the ECHR ruling was unfair
and biased and said it could appeal within three months.
Russia gave a similar reaction on Monday when an
international arbitration court in The Hague found that Russian
authorities had subjected Yukos to politically motivated
The court also ruled Russia should pay 300,000 euros in
costs and expenses, plus any tax. Yukos had requested 4.3
million pounds ($7.3 million) in legal fees, $174,000 for costs
of an expert report and $588,148 for other fees.
"The awarded amount is already totally unprecedented in the
human rights field," said Jan Kleinheisterkamp, associate
professor of law at the London School of Economics. "1.9 billion
euros is humongous in terms of compensation granted by the
An interim ruling by the ECHR in 2011 found that Russia had
not misused legal proceedings to destroy Yukos but ruled that
enforcement proceedings used against Yukos had been
It invited a claim for "just satisfaction", or compensation,
from Yukos. Yukos had sought compensation of just under 38
billion euros. This was based on a valuation by a specialist
energy firm, according to a source close to the claim.
The damages were being sought on behalf of all Yukos
"This is another confirmation of the fact that everything
that Russia did against the oil company, was illegal," Leonid
Nevzlin, a former Yukos executive and top shareholder, told Echo
Moskvy radio. He said this was a consequence of Russia's
refusing to seek for a compromise with Yukos abroad.
(1 US dollar = 0.5926 British pound)
(Additional reporting by Maria Kiselyova in Moscow; Editing by
Elizabeth Piper and Alison Williams)