Former shareholders of the now-defunct oil and gas company Yukos have responded to Russia's memorandum to the U.S. District Court for the District of Columbia, where a $50 billion compensation case against the country is being considered, calling for the proceedings to continue despite Russia's claims of their illegality, the Vedomosti newspaper reported Monday.
In the note dated Oct. 10, which has been published on the court's website, Russia argued that the U.S. court had no jurisdiction over the matter, given that the original arbitration was initiated under the Energy Charter Treaty of 1991, an international agreement establishing a framework for cross-border energy cooperation which Russia said it had not ratified.
It also accused the plaintiffs of extortion and acting on behalf of “a group of Russian oligarchs,” claiming that awarding damages would run contrary to American state policy and the so-called ?€?clean hands doctrine?€? — a rule stating that a plaintiff must be free from unfair conduct in regard to the matter of their claim in order to bring a case to court, Vedomosti wrote.
In response, the shareholders' lawyers called the reference to the practice ?€?a thinly veiled attempt to reopen an argument over matters which had … already been settled by the Permanent Court of Arbitration in The Hague,?€? which ruled that the doctrine did not apply in the Yukos case, the report went on to say.
They also denied wrongdoing on the part of their clients.
An arbitration panel in The Hague in July last year awarded $50 billion damages to five former shareholders of Yukos and an employee pension fund ?€” the largest compensation award for an arbitration ruling in history. Russia was also ordered to pay $60 million in legal fees.
The Russian side has until Dec. 11 to issue a reply.
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