Russia’s Rosneft subsidiary fights court order to pay $186 million to Yukos

January 28, 2014

A subsidiary of Russia’s giant Rosneft energy company has appealed a US court judgment ordering payment of $186 million to Yukos Capital, according to court documents obtained by the RAPSI legal news service, RIA Novosti reported on January 28.

Samaraneftegaz argued that the judgment ignored Russian law in granting recognition and enforcement of the arbitration award to the subsidiary of the now defunct Yukos oil company once owned by Mikhail Khodorkovsky, who was released after 10 years in prison in December.

The dispute revolves around two July 2004 loan agreements, which provided for the arbitration of disputes in Russia and under Russian law, as well as November 2005 addenda to the agreements that provided for arbitration in New York’s International Court of Arbitration of the International Chamber of Commerce (ICC) under New York law, according to a recent order.

In August, the United States District Court for the Southern District of New York granted a request by Yukos Capital for summary judgment in its efforts to seek enforcement of an arbitration award it had earlier won in the ICC against Samaraneftegaz.

A supplemental judgment in early October, linked to the August judgment, ordered Rosneft to pay $185,907,785.41 plus interest to Yukos Capital.

Yukos Capital filed a memo in late October requesting that a US federal court order Samaraneftegaz to satisfy the judgment.

On January 9, the district court ordered Samaraneftegaz to turn over assets in order to satisfy the judgment, and to refrain from paying dividends, making loans, or providing other such payments to shareholders or corporate affiliates until either the judgment was satisfied or a bond posted pending appeal.

Samaraneftegaz raised several issues on appeal in a brief filed on January 24 with the US Court of Appeals for the Second Circuit. It argued that the district court had found that the relevant factors weighed in favor of dismissal based on forum non conveniens, but had declined to dismiss on this basis.

Copyright: RIA Novosti, 2014