An impressive and powerful column from Tim Osborne of GML in the Moscow Times:
How to Steal Legally By Tim Osborne Nothing seems to dampen the authorities’ enthusiasm to wipe out any trace of Yukos, which at one point was the country’s largest and most transparent oil production company. More than 45 people connected to the company have been the target of legal action and the company’s assets were expropriated. These actions against Yukos reveal a justice system that is infected with corruption and political bias. They have also demonstrated the complete breakdown of rule of law in Russia.
The authorities’ enthusiasm to utterly destroy everything connected to Yukos has almost led to a de facto death sentence for former Yukos vice president Vasily Aleksanyan, who was refused life-saving medical treatment unless he provided false testimony to incriminate his friends. Thankfully, following international pressure and Mikhail Khodorkovsky’s hunger strike, Aleksanyan appears to be finally receiving treatment for his illnesses.This denial of Aleksanyan’s rights came at the same time as the government’s attack on the British Council. Authorities arbitrarily targeted employees’ tax affairs and threatened their families. Britain’s foreign secretary has said Russia’s actions against the British Council violated its obligations under the Vienna Convention.Together with the nonobservance of international treaties, the abuse of Aleksanyan’s rights once again demonstrates Russia’s flagrant disregard for truth and the rule of law, which has characterized the Yukos affair from the beginning. This was highlighted in comments by Yukos’ government-appointed receiver, Eduard Rebgun, who told Russia Today television in January that Yukos had made no effort to save itself — something it “could have done if it had wanted to do so.”I have heard countless fabrications about the company and its owners, witnessed its unnecessary destruction by the Russian government, and seen its employees and shareholders harassed, arrested and imprisoned. But never have I heard anything quite as disingenuous as Rebgun’s remark.Rebgun would do well to recall a ruling in an Amsterdam court in October, which stated that the legal process by which Yukos was declared bankrupt does not hold up under scrutiny. The court ruled that no appeal by Yukos in the Russian courts could repair the “fundamental legal defect attached to the bankruptcy order” and that “in the bankruptcy proceedings, no substantive, sufficiently safeguarded, judicial review took place or could have taken place of the manner in which the additional tax assessments, as imposed by the Russian tax authorities and determined by the tax court, were determined.”This ruling nullified any decisions Rebgun had made regarding Yukos’ foreign assets, owned by subsidiaries in the Netherlands. It was yet another indication that no one outside the cabal that orchestrated the dismemberment of Yukos believes the bankruptcy was anything other than a manipulated sham to steal the company’s assets. It is this same cabal that controls the fates of Yukos employees languishing in Russian jails after their flawed trials.The authorities went to considerable lengths, starting in July 2006, to ensure that a viable rescue plan put forward by Yukos management was dismissed by the company’s creditors. Even though I was Yukos’ nominated representative to the creditors’ meeting that decided the fate of the company, Rebgun denied me free access to the “bankruptcy” report. I was told that I would have to come to Moscow in person to review the documents — an unattractive option considering he had told me a few weeks earlier that he could not guarantee my safety in Russia. Rebgun’s words proved to be frighteningly prescient, considering the recent ill treatment of Aleksanyan.In their rescue plan presented at that creditors’ meeting, Yukos’ management demonstrated that the company was a viable entity and could pay its legitimate creditors within 18 months.The meeting, however, was made up almost entirely of government-controlled entities that were intent on destroying Yukos. They brushed aside management’s attempts to save the company, choosing bankruptcy instead.Despite claims by President Vladimir Putin that the Kremlin had no interest in bankrupting Yukos, the company’s assets were auctioned at below-market value. In addition, new debts suddenly emerged out of nowhere, preventing the company from surviving. The main beneficiary of these tactics was Rosneft.It is clearer now than ever that the expropriation of Yukos was a ploy to put key elements of the energy sector in the hands of Putin’s retinue. Moreover, the Yukos affair marked a turning point in Russia’s commitment to domestic property rights and the rule of law.GML, the majority owner of Yukos, is seeking compensation from Russia under the binding terms of the Energy Charter Treaty, which Russia signed in 1994. We expect the damages to be in excess of $50 billion. Pursuant to the New York Convention, the award, if it is not settled voluntarily, will be fully enforceable on any Russian government assets outside the country not covered by sovereign immunity.This is the largest commercial arbitration claim ever filed. Hearings will begin in November. We will demonstrate that Yukos did everything possible to save itself and that the only thing from which it needed protection was the Russian government.Tim Osborne is a director of GML Limited.
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8 Comments
lol, so the U.S., having signed but not ratified the Kyoto Protocol could be sued by other Kyoto Protocol members for violating the treaty?that’s a good one
COLLEEN:There is no better proof that Russia is wrong that your shoddy, hopelessly lame attempt to change the subject. You can’t defend the Kremlin’s larceny on its merits, so you do what the Soviets always did. There is an old joke about how an American was told at a Soviet hotel that he couldn’t complain about about its poor service because America lynched blacks.The net result of this attitude was that hotel service, like everything else in the USSR, wasn’t reformed, and the USSR perished. It seems you now would like Russia to follow the same path.Why do you hate Russia that much? What did it ever do to you?There’s no indication whatsoever that Mr. Osborn has ever suggested the U.S. should not be sued if it violates a treaty it has signed. Your propaganda aimed at him is utterly neo-Soviet in character, fundamentally dishonest and just as utterly pathetic.
The United States is not involved in the Yukos arbitration. It is a business affair, and frankly, a rather indefensible theft of assets.Russia is a signatory to the ECT, and must comply with the treaty.Any supporter of Russia would want the Kremlin to deal with the Yukos problem swiftly and transparently to end state theft and bring rule of law back to the country. There is no telling how great and how influential Russia could become with an open, democratic, and law abiding government looking to constructively engage in the international community.
La Russophobe, the issue in my opinion is arrogant colonialism and having a colonial / imperial mindset.And the examples are plenty.Last year, Britain’s ambassador to Russia told it, flat-out, to violate its constitution and extradite a Russian national. Cooly, Putin rebuffed the ambassador’s proposition as “clearly a remnant of a colonial mindset [...and Russia, thank God, has never been a colony of Great Britain].”Moving on to the CFE treaty. No NATO country has ratified or honored it, while Russia has ratified it and been observing it. For example, NATO makes monthly inspections of Russian military bases, as outlined in the treaty. Putin likened the restrictions Russia faces under the existing treaty to a situation in which the U.S. would have to seek Russian approval before it sent troops from California to Texas. “We will no longer fulfill any colonial conditions,” Putin finally said in his press conference yesterday.There are many more examples of this colonial mindset over Russia that some in the west seem to want to practice. I really don’t know what’s up with them and what they’re on, but I guess I could advise them to lay-off the meds.Osborne’s piece, in my opinion, reeks of this colonial mindset. A self-respecting country like Russia will not yield to ultimatums and threats, which Osborne is all about. Seriously, how ludicrous is his argument that Russia must abide by a treaty it has not ratified or it will be sued?Russia won’t back down. No, it won’t back down.
What on earth are you talking about?ECT – ENERGY CHARTER TREATY.The Conventional Forces in Europe Treaty has absolutely nothing to do with one of the largest business arbitration cases in history.It does not sound like you have read the article.
James, I made an example and proposed that Osborne’s lawsuit is yet another example of the colonial mindset some have over Russia.Russia has NOT ratified the Energy Charter, yet Osborne is suing Russia because he says it has violated the Charter? Sounds like colonialism.NATO has NOT ratified the CFE treaty, yet it expects Russia to singlehandedly fulfill its obligations under the treaty forever and ever? Sounds like colonialism.
What obscene gibberish and lies.NATO was never asked to ratify the CFE. NATO is not a signatory to treaties, it is the RESULT of a treaty. It is the countries that are members of NATO that must ratify the CFE.The issue as to CFE is not Russia’s refusal to ratify, it is its OPEN UNILATERAL WITHDRAWAL. No member of NATO has unilaterally withdrawn from the treaty, nor has Russia accepted the right of other countries to unilaterally withdraw from treaties it likes.Mentioning the CFE is an absurdly lame effort to avoid the topic, since she cannot hope to defend the Kremlin’s actions on their merits.It’s really quite comical to see this ridiculous cretin arguing about the legal aspects of the basis for a claim against Russia with a famous attorney. It’s perfectly clear that she has no idea what she is talking about and is trying to change the subject in an act of naked propaganda. It seems she has appointed herself a judge and already decided that Osborn has no case. Presumably, we should just hand over the governance of the whole world to her, so that she can sign her light of truth on us.Blech. No wonder Russia is in such a pathetic state, with rubbish like this for “friends.”
I think you should do a lot more reading about both treaties before making spurious connections.Furthermore, “colonialism” is an absurd Putin talking point, more appropriate to describe European and American activities in areas they once occupied, like Latin American, Africa, and Asia.Russia doesn’t need to be treated like victim. They’re big boys now, and deserve to be treated like equals before the law.