[Congressional Record (Bound Edition), Volume 153 (2007), Part 27] [Extensions of Remarks] [Pages 36483-36484] [From the U.S. Government Publishing Office, www.gpo.gov]COURT RULINGS ON YUKOS MANAGEMENT ______ HON. ROGER F. WICKER of mississippi in the house of representatives Wednesday, December 19, 2007 Mr. WICKER. Madam Speaker, I would like to share information with my House colleagues about the application of the rule of law and free market economics in Russia. While economic growth has been positive since the 1998 financial crisis, Russia's legal and political system has regressed, threatening the development of a diverse economy based on market principles and the rule of law. The Russian government's 2003 expropriation of the YUKOS Oil Company raises concern about the stability of the economy and continues to remind us that investing in Russia is still very risky. As Co-Chairman of the Congressional Human Rights Caucus Russia Working Group, I would point out that the same legal system that has undermined the civil and human rights of former YUKOS head Mikhail Khodorkovsky and his business partner Platon Lebedev, also caused the company's downfall. In the YUKOS case, the Russian courts failed to adhere to basic principles such as private property rights protection, independent judges, due process and equal application of the law. YUKOS, once Russia's largest oil company, was forced to declare bankruptcy in August 2006, when it could not pay claimed back taxes. After a series of auctions, YUKOS' remaining assets fell into the hands of the state- [[Page 36484]] owned company, Rosneft. On November 22, 2007, Russia's Federal Tax Service announced it had completed YUKOS' bankruptcy procedure and that the company had ceased to exist as a legal entity. In contrast to their experience in the Russian judicial system, Khodorkovsky and Lebedev have won several court rulings in other countries. The first favorable decision came in August 2006, when a Dutch court refused to give the Russian receiver of YUKOS, Eduard Rebgun, full control of its Dutch unit. In August 2007, the Supreme Court of Switzerland ruled that the case against Khodorkovsky and Lebedev was politically motivated and refused to release bank documents to Russia in connection with the case. Shortly afterwards, in October 2007, the European Court of Human Rights ruled that Russia had violated the rights of Lebedev during his arrest and pretrial detention, and the Russian government was ordered to pay him compensation. However, in the most recent and significant ruling on October 31, 2007, a Dutch court ruled the YUKOS receiver did not have the right to sell off the firm's foreign assets in a bankruptcy auction in August. The court nullified all actions taken in that auction. The court also ruled that YUKOS was denied a fair trial to establish how much back taxes it owed to the Russian government. The Dutch court ruling is important because it highlights three vitally important issues: First, the ability of Russian officials to appoint their own managers to run YUKOS; second, the bankruptcy of YUKOS and the process used to achieve it; and third, the validity of the original tax claim against YUKOS. This decision, like many others before it, raises concerns about the legitimacy of the Russian court rulings in the YUKOS case. When the European Court of Human Rights along with courts in Switzerland, the United Kingdom, the Netherlands and other jurisdictions all reach the same conclusion, it strongly indicates that there is something very wrong in the application of the rule of law in Russia. I want to share details of the October 31st Dutch court judgment relating to this case, and would like to submit for the Record the ``Decision'' section of that ruling. Judgment District Court of Amsterdam, civil law division, case number/docket number: 355622/HA ZA 06-3612. Judgement dated 31 October 2007 in the case of 1. David Andrew Godfrey, resident in London (United Kingdom); 2. Bruce Kelvern Misamore, resident in Houston, Texas (United States of America); 3. the private company with limited liability YUKOS Finance B.V., with registered seat in Amsterdam; claimants, procurator litis: Mr. R.J. van Galen versus 1. Eduard Konstantinovich Rebgun, in his capacity of trustee in the bankruptcy of the legal entity under the law of the Russian Federation OAO YUKOS Oil Company, having chosen domicile at Rotterdam; 2. Leendert Jacob Hogerbrugge, Resident at Leiden; 3. Sergei Savelyevich Shmelkov, resident at Moscow (Russian Federation); defendants, procurator litis: Mr. P.N. van Regteren Altena. Claimants jointly hereinafter to be called Godfrey et al. and separately Godfrey, Misamore and Yukos Finance. Defendants jointly hereinafter to be called Rebgun et al. and separately Rebgun, Hogerbrugge and Shmelkov. OAO Yukos Oil Company hereinafter to be called Yukos Oil. The decision The District Court: Passes a declaratory judgment that all Shareholders' Resolutions in regard to Yukos Finance, in so far as taken by Rebgun in his capacity of trustee of Yukos Oil, including but not limited to the decision to dismiss Godfrey and Misamore as directors of Yukos Finance B.V. dated 11 August 2006 and the alleged decisions to appoint Shmelkov and Hogerbrugge as directors of Yukos Finance, are null and void; Passes a declaratory judgment that all decisions taken by Shmelkov and/or Hogerbrugge in their supposed capacity of directors of Yukos Finance B.V. are null and void; Orders Rebgun to lend his immediate and unconditional cooperation to the reversal of the (consequences of the) Shareholders' Resolutions he made in Yukos Finance, subject to a penalty of 10,000 Euros for each individual violation and of 1,000 Euros for each day that such violation continues, to a maximum of 500,000 Euros; Forbids Rebgun to exercise any rights with respect to the shares of Yukos Finance or to have these rights exercised, subject to a penalty of 10,000 Euros for each individual violation and of 1,000 Euros for each day that such violation continues, to a maximum of 500,000 Euros; Orders Shmelkov and Hogerbrugge, both jointly and severally, to lend their immediate and unconditional cooperation to the reversal of the (consequences of the) managerial decisions taken in Yukos Finance, whether individually or jointly, subject to a penalty of 100,000 Euros for each individual violation and of 100,000 Euros for each day that such violation continues, to a maximum of 100,000 Euros; Forbids Shmelkov and Hogerbrugge to exercise any rights with respect to their alleged representative authority in Yukos Finance or to have these rights exercised, subject to a penalty of 100,000 Euros for each individual violation and of 100,000 Euros for each day that such violation continues. to a maximum of 100,000 Euros; Orders Rebgun, Shmelkov and Hogerbrugge jointly and severally to pay the procedural costs on the side of Godfrey et al., estimated up to this judgment at 332,87 Euros in disbursements and 1,808 Evros in local counsel's salary: Orders Shmelkov to pay the costs incurred in connection with the Russian translation of the Writ of Summons, being 10,882,06 Euros; Declares the aforementioned orders and injunctions as well as the orders to pay the procedural costs immediately enforceable; Dismisses all other applications. This judgment was passed by Mr. W. Tonkens-Gerkema, Mr. C.S. Naarden and Mr. A.W.H. Vink and delivered in open court on 31 October 2007. ____________________