French court backs freezing of Russian assets over Yukos claims

Yukos shareholders want the Russian government to cover their massive losses, blaming Moscow for driving the bankrupt oil giant into liquidation for political reasons before taking it over (AFP Photo/Maxim Marmur)

Paris (AFP) - The Paris appeals court on Thursday backed the freezing of Russian assets in France, instigated by shareholders in bankrupt oil giant Yukos looking for compensation from Moscow.

The shareholders want the Russian government to cover their massive losses, blaming Moscow for driving Yukos, run by Kremlin critic Mikhail Khodorkovsky, into liquidation for political reasons before taking it over.

European courts have allowed them to seek the seizing of Russian assets abroad after Moscow refused to pay out.

Last year, an arbitration court in The Hague ordered Russia to pay more than $50 billion in compensation.

Russia has also refused to pay out almost 1.9 billion euros ordered last year by the European Court of Human Rights.

In Paris Russia had asked the appeals court to suspend the seizing procedures pending a court ruling, expected by early 2017, on whether The Hague compensation order is applicable.

But that request has now been rejected, and the French court said all frozen assets will be transferred to state-owned financial body Caisse des Depots et Consignations (CDC).

"The former shareholders will continue to seize Russian Federation assets in complete accordance with the rule of international law," said Emmanuel Gaillard, a lawyer for the shareholders.

A lawyer for the Russian government, Andrea Pinna, said that the assets were now "highly protected" at the CDC as "they are no longer in danger of falling into the hands" of the shareholders.

Several Russian assets have already been seized in France, including apartment buildings, bank accounts and the Russian stake in the Euronews TV channel.

Moscow seized and carved up Yukos following the dramatic arrest of its billionaire owner Khodorkovsky in 2003.

Apart from their legal action in France, former Yukos shareholders are also trying to seize Russian assets in Belgium, Germany, Britain and the United States.