Russia: the Bear-Baiting Continues ...

... unabated, as one might say.  I have just returned from an outing across France and Germany to report that while all eyes are on Greece, something else very interesting is afoot.  Until a year ago the biggest civil actions the world has ever seen were (a) that being pursued against the German government by the three German nuclear power operators (E.on, RWE + Vattenfall), for damages in respect of Merkel's precipitate post-Fukushima closure of their plants.  That one weighs in at around EUR 12 billion, and is perhaps a story for another day.   (b) The BP oil spill ($18 billion, as we now know).

However, these were relegated to the second division by the extraordinary award against the Russian government of $50 billion last July, in favour of Yukos shareholders claiming that Russia destroyed their oil company illegally.

I don't recall this making monster headlines at the time (CU covered it here), but that might change.  Because all across Europe, law firms are diligently working up practical plans to seize Russian state assets - and last month the tip of this iceberg was sighted.  In all the Greek excitement, I certainly didn't spot it.

Apparently this is all very real and maybe even imminent.  There may be trouble ahead ...  oh, and that EC investigation on Gazprom rumbles on.    The countries of the Orthodox faiths must think us western europeans have got it in for them.

A good job the Chinese have problems of their own.  More nervous days in Mariupol though, I'd suggest.

ND

Hague rules against Putin

No, not William Hague, off to be as near as he can to Angelina Jolie, but the International Court of the Hague.

Many moons ago Putin seized a private company after accusing it for tax fraud, Yukos, which had grown to control much of Russia's oil and gas through likely dubious means after privatisation in 1993, was broken up and its CEO - the politically active Michael Khordokovsky, put in prison. The bits of the company were then sold to finance groups, who miraculously then sold it on shortly thereafter to Rosneft - controlled by Putin's ally.

So much, so murky, the numbers involved are fantastic. Yukos controlled 20% of Russia's oil and gas sector. The tax claim alone was for $27 billion!

Whilst there is not tax treaty for shareholders, meaning all Western claims are effectively defunct, the management have been appealing over the years at the various international courts. Today's ruling comes as a milestone and leave Russia with just one last appeal (so a few more years then....).

The timing for Russia could not really be worse, after the shooting down on MH17 and the proxy war it is sponsoring in the Ukraine. Little could it afford in its budget the $50 billion repayments sanctioned - all to oligarchs too, of all people.

It will be interesting to see if Russia ignores the court when push comes to shove, as it will set a dangerous precedent for any Russian company wishing to operate abroad as it will have abrogated key international treaties.