* Two big cases against Russia could be resolved this year
* American investors rely on U.S. diplomatic pressure on
* Khodorkovsky says not interested in Yukos money
By Megan Davies and Douglas Busvine
MOSCOW, Feb 12 Freed former tycoon Mikhail
Khodorkovsky has ruled out trying to recover the fortune that
made him Russia's richest man, but two multi-billion-dollar law
suits involving his defunct oil giant Yukos could be decided
Pardoned by President Vladimir Putin in December after 10
years in jail for fraud and tax evasion, Khodorkovsky, 50, has
bowed out of the ring, but the ex-managers and shareholders of
Yukos fight on for compensation from the Russian Federation.
A business once worth $40 billion that pumped two percent of
the world's oil, Yukos was broken up and nationalised after
Khodorkovsky's arrest in 2003. Most of its assets are now owned
by Russian state oil major Rosneft.
The two main lawsuits, one brought by former Yukos managers
at the European Court of Human Rights in Strasbourg and one by
shareholders at the Permanent Court of Arbitration in The Hague,
could be decided this year, according to those involved.
After the sudden release of Khodorkovsky, plaintiffs in the
cases made clear they wanted to push forward with their cases.
Allies say Khodorkovky's imprisonment and the subsequent
dismantling of his business empire were caused by his funding of
Putin opponents and his public accusations about state
corruption, which the Kremlin denies.
"When I went to Russia it was to be a part of what I saw as
a country going in the right direction," said Ohio-born Bruce
Misamore, the ex-finance chief of Yukos who is still seeking
compensation nine years after fleeing Russia for America.
"We were doing everything right. Then Mr Putin turned into a
despot and stole the company back. Things haven't been the same
in Russia since," Misamore said in an interview.
In the defining power struggle of Putin's first presidency,
Khodorkovsky was arrested in 2003 at gunpoint at a Siberian
airfield. A court found him guilty of tax evasion and fraud.
Khodorkovsky's jailing was seen by many as sending a warning
to Russia's big businessmen to keep out of politics and ushering
in a new era of Kremlin capitalism in which Putin associates
prospered. A former Putin aide, Igor Sechin, now runs Rosneft,
the world's top listed oil firm by output thanks to Yukos legacy
Since Khodorkovsky's pardon and the release in January of
his business partner Platon Lebedev, the Russian government has
made it clear this clemency would have no effect on the legal
battles surrounding the Yukos breakup.
Putin has not discussed the cases since he pardoned
Khodorkosky in December. In televised comments, Putin once
defended the tycoon's imprisonment, declaring: "A thief must be
"LITIGATION WILL CONTINUE"
The Kremlin declined to comment on the legal wrangles,
referring inquiries to the justice ministry which ruled out any
Claire Davidson, a Yukos spokeswoman, said: "Litigation will
continue on behalf of all shareholders. The release of Mr
Khodorkovsky doesn't change anything."
Legal experts and Kremlin watchers describe the plaintiffs'
chances of an outright win in court as slim, after an interim
ruling by the ECHR in 2011 found partly in favour of the Russian
"It will end in compromise," said Alexander Rahr, research
director of the German-Russian Forum, a non-governmental group,
expressing a view shared by a number of independent lawyers who
spoke on condition of anonymity because the case was ongoing.
"Khodorkovsky and Lebedev are out. The European Court for
Human Rights will make a political decision. It will not put
Russia in the stocks," added Rahr, who played a backstage role
in negotiating Khodorkovsky's release, giving him a first-hand
insight into the complex affair.
Asked about possible outcomes, the ECHR's press office
declined to comment and said that it could not provide a
timeframe for a judgment on the matter of "just satisfaction",
Yukos, which at one point made Khodorkovsky the world's
richest man under 40, first petitioned the ECHR in 2004.
The oil group accused Russia of imposing bogus taxes,
stealing assets in sham auctions and unlawfully bankrupting the
company. Its initial $100-billion suit was scaled back to an
undisclosed sum, described by Misamore as "mega billions".
Moscow has argued that its seizure and freezing orders
against Yukos were "appropriate ... because of the unprecedented
amounts of the tax debts".
In its 2011 ruling, the ECHR described the tax claims as
lawful but said they had been enforced in violation of Yukos's
property rights. It granted Yukos leave to seek "just
satisfaction". Yukos plaintiffs await a verdict.
Separately, Gibraltar-based Group Menatep, through which
Khodorkovsky controlled Yukos and which now exists as holding
company GML, is pushing an arbitration claim for more than $100
billion. This accuses Russia of expropriating Yukos without
compensation and is the biggest commercial legal case ever.
Asked whether Russia would consider itself bound by any
financial award by the ECHR, the justice ministry said it would
be "inappropriate" to comment before judgment was handed down.
The finance ministry did not comment on how Moscow might respond
to any judgment against it in The Hague.
Yukos became a hit with U.S. investors as Khodorkovsky
boosted transparency, expanded output and paid out dividends. An
investor who bought Yukos stock after Russia's 1998 crash would
have amassed paper profits of up to 1,000 percent.
Tens of thousands of individual U.S. investors who lost
their money are seeking $12 billion in redress with assistance
from the State Department. Litigation is not a viable route for
them as Moscow and Washington have not signed any investment
State Department officials have raised Yukos investors'
concerns at deputy prime minister level.
"Russia is trying to attract foreign investment and there is
increasing pressure from the U.S. Congress on the U.S.
administration to be advocating for American shareholders in
Yukos so there should be some movement in 2014," said Marney
Cheek, a partner at law firm Covington & Burling which is
representing some U.S. investors in Yukos.
FLIGHT TO ISRAEL
After he was jailed for fraud and tax evasion, Khodorkovsky
ceded his controlling interest in Menatep, which owned 60 to 70
percent of Yukos, to Russian-born Leonid Nevzlin, a business
partner who had fled to Israel to avoid prosecution.
Insisting he was wealthy enough not to have to work,
Khodorkovsky said after his release that he was not seeking to
regain what was left of his business. It was not clear whether
this statement was a condition for him being freed.
A spokesman for Khodorkovsky declined to elaborate on the
comments which were made immediately after he swapped the
cramped conditions of Corrective Colony No.7 near the Arctic
Circle for Berlin's luxury Adlon Hotel.
Nevzlin said Khodorkovsky "showed no interest" in Yukos when
they were reunited in Israel in the New Year.
"It just wasn't possible to discuss business with him,"
Nevzlin told independent channel TV Rain on Jan. 10. He said he
would continue to take the lead for GML's core shareholders.
Nevzlin was not available to comment to Reuters.
If Khodorkovsky claimed no Yukos monies, his present wealth
would be based on what he saved before he was arrested.
"You can be sure we are not talking about multi-billions of
dollars; we are talking maybe hundreds of millions," said one
source who has advised Khodorkovsky in the past and who spoke on
condition of anonymity.
The former tycoon has said he cannot return to Russia as
there are no assurances he will be able to leave again. A court
order that he and Lebedev pay 17 billion roubles ($500 million)
in tax arrears remains in force.