Khodorkovsky & Lebedev Communications Center

An international arbitration tribunal in Stockholm has found Russia liable for expropriating the investment of a minority shareholder in Yukos Oil Company.

The arbitrators ruled that Russia must pay $3.5 million to RosInvestCo UK Ltd - the judgement marks the first instance where an international court has ruled on the merits of an expropriation claim filed against Russia by former Yukos investors.

A number of claims have been brought against Russia alleging that the Kremlin effectively nationalized Yukos by using a series of fraud and tax evasion charges to plummet the company into bankruptcy.

Investment Arbitration Reporter suggests the verdict is expected to be seized upon by other claimants pursuing parallel claims against Russia, including the majority shareholder Group Menatep who are seeking tens of billions of dollars in a trio of arbitrations under the Energy Charter Treaty.

Reports suggest that Russia faces at least two further international proceedings arising out of the alleged expropriation of Yukos. The Kremlin has yet to comment on the arbitral ruling, however, lawyers for the Russian Federation have recently applied to the Swedish courts to set aside the arbitral award. The Swedish Supreme Court ruled in November that a lower court can hear the merits of a challenge lodged by Russia, which maintains that arbitrators lacked jurisdiction to hear RosInvestCo's claim.