Monckton seals partial victory for Yukos in ECHR fight

Monckton Chambers’ Piers Gardner has won a victory for the now defunct oil giant Yukos after the European Court of Human Rights (ECHR) ruled that the Russian government had breached its rights.

Piers Gardner
Piers Gardner

However, the European court also found that the Russian Federation had not abused its legal system in order to destroy the company.

Gardner was instructed directly to act for Yukos in its legal battle against the Russian government. The defendant instructed Brick Court silk Michael Swainston QC. Swainston led a team of barristers from Brick Court including Paul Wright, Maya Lester and Stephen Midwinter, while Devereux Chambers’ Timothy Brennan QC provided tax advice.

The court’s nine-judge panel found that Russia violated three articles of the European Convention on Human Rights, but rejected several other claims filed by Yukos such as a contention that the prosecution of Yukos was politically motivated (see judgment).

Both sides have claimed victory in the case with the Russian Federation highlighting that the court had failed to find that Yukos was the victim of a politically motivated plot to expropriate the company.

The court ruled that: “Apart from the violations found, there was no indication of any further issues or defects in the proceedings against Yukos which would have enabled the court to conclude that Russia had misused those proceedings to destroy Yukos and take control of its assets.”

The court found that Yukos was denied a fair trial in contesting the tax liabilities imposed on it in 2004. It found that the enforcement of those tax liabilities, penalties, fines and interest breached the company’s convention rights and dealt it a ’fatal blow’.

It has taken seven years for the judgment to be published and the question of the $100bn damages was not determined by the court. The parties have been given three months to settle the case or the court will intervene.

The company — a major Russian taxpayer whose primary subsidiary once produced the same amount of oil as the whole of Libya — was dismantled by Russian authorities after the 2003 arrest of its founder and owner Mikhail Khodorkovsky.