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Strasbourg. The European Court of Human Rights on Thursday began hearing a complaint against Russia’s government by representatives of now-defunct oil giant Yukos, whose jailed founder, Mikhail Khodorkovsky, claims authorities illegally drove the company out of business.

It is the first time since the claim was filed six years ago that representatives of the two sides have presented their arguments face-to-face in the court.

The European court has agreed to examine Yukos’ complaints of irregularities in the Russian authorities’ proceedings on its tax liability, the unlawfulness and size of the tax assessment and the forced sale of its main production unit Yuganskneftegaz, among others.

Thursday’s hearing is a milestone in Yukos’ efforts to win acknowledgment that the Russian government’s actions were “unlawful, disproportionate, arbitrary and discriminatory, and amounted to disguised expropriation” of the company.

Fearful it would never get a fair hearing in a Russian court, Yukos representatives filed their complaint with the European court in 2004 claiming the company was “targeted by the Russian authorities with tax and enforcement proceedings, which eventually led to its liquidation.”

Russian authorities had accused Yukos of shady deals and shell companies used to hide revenue from tax authorities. They began pursuing Yukos in 2002. Through the courts, they froze its assets, forced it to sell its shares in other companies and declared it insolvent before the company was finally liquidated in 2007.

Khodorkovsky, once Russia’s richest man, who founded the company in the chaotic years that followed the Soviet collapse, was convicted on charges of fraud and tax evasion and has been imprisoned since 2003.

Yukos would not give up the fight, however, and representatives of the company’s entities that managed to survive kept pressing the complaint they filed with the European court.

On behalf of Yukos, its representative has submitted a claim for $98 billion in damages.

Rulings of the European Court of Human Rights are binding on all its member countries. The Council of Europe monitors the execution of judgments, particularly to ensure payment of the amounts awarded by the Court.

The treatment of both Khodorkovsky and his company have continued to dog the Kremlin even as President Dmitry Medvedev, a lawyer, says that judicial reform and the rule of law are among his top priorities.

“We chronically do not respect laws,” Medvedev said this week, addressing a high-level group of Russian and French business leaders during his state visit to France. He promised his audience that he would make sure Russia would become a country where the rule of law prevailed.

Russian citizens have long seen the European court as a place they could gain a hearing, and the Russian government has been hostile to it. Recently, however, Russia has moved to ease that stance. In January, Russian lawmakers ratified an international agreement intended to strengthen and speed up the work of the court after years of refusing to do so.

 

Associated Press