The High Court has dismissed a claim brought by the former management of Yukos Oil Company against five individuals who were alleged to have colluded with the Russian state to rig an auction of a valuable Yukos subsidiary, Yukos Finance BV. Andrew Mitchell QC and Alexander Milner of Fountain Court acted for two of the successful defendants, Stephen Jennings and Robert Reid.
Yukos Oil was bankrupted in 2006 as a result of actions taken by the Russian state, and its assets were sold off in a series of state-run auctions. The last auction, in August 2007, was of the shares in Yukos Finance, which owned around US$1.5 billion in cash as well as a valuable oil pipeline. It was won by a consortium of investors including the Russian investment bank Renaissance Capital, of which Mr Jennings was the CEO and where Mr Reid was employed as a solicitor. The claimants alleged that the consortium had made an unlawful agreement with the Russian government whereby it would be allowed to win the auction at a pre-agreed price.
After a five-week trial, Sir Michael Burton GBE rejected the Claimants’ case that the auction was rigged, and in particular found that there was no factual justification at all for the allegations against Mr Jennings and Mr Reid. The Court also concluded that the Claimants’ case failed as a matter of causation, and was time-barred, and that the Defendants were in any event not the correct defendants to the claim as a matter of Russian law.
The full judgment is available here.