The European Court finds NK "YUKOS" human rights were violated

On September 20, 2011 the European Court of Human Rights issued its Chamber judgment in the case OAO Neftyanaya Kompaniya YUKOS v. Russia (application no. 14902/04) which found:

  • by six votes to one that there had been a violation of the right of NK "YUKOS" to a fair trial on the charge of tax evasion due to failure to provide adequate time to prepare its defense in the first and second instance court (4 days to study case file of at least 43 000 pages and 21 days to prepare for appeal hearings). However, it did not find: that the action against YUKOS was arbitrary or unfair; that arbitrary or unfair conduct restrictions had been imposed by the courts on YUKOS’s counsel during the hearings; that Moscow City Court had given its judgment without studying the evidence; or, that YUKOS’s access to a cassation appeal was unfairly restricted;
  • by four votes to three that there has been a violation of the right of NK "YUKOS" to respect for its property regarding the imposition and calculation of the penalties concerning the 2000-2001 tax assessments for two reasons, the retroactive change in the rules on the applicable statutory time-limit and the consequent doubling of the penalties due for the 2001 tax year;
  • by five votes to two that there had been a violation of the right to respect for property in the enforcement proceedings. This is due to two reasons: firstly, the fact that proper ways of debt enforcement, not related to the actual destruction of the company, had not been carefully considered, and, secondly, the recovery of 7% enforcement fee, which is set by law and cannot be changed, despite the absolute disparity - in this case - of enforcement costs of judicial decisions;
  • unanimously that there had been no other violations of the right to respect for property of NK "YUKOS";
  • unanimously that there had been no discrimination against NK "YUKOS" in the right to respect for property; and that the fines or interest payments applied had not been individual, disproportionate or burdensome for the company;
  • unanimously that the proceedings were held to ensure tax enforcement and penalties for violation, and that there had not been a political motive behind the proceedings;
  • unanimously that there was no need for a separate examination on violations of NK "YUKOS" rights to an effective and fair defense; and finally,
  • unanimously that the question on award of a just compensation for NK "YUKOS" violations was not ready for decision (NK "YUKOS" claimed more than 81 billion euros as compensation for losses incurred by the company).
  • This Chamber judgment is not final. During the three-month period following its delivery, any party may request that the case be referred to the Grand Chamber of the Court. If such a request is made and accepted, the Grand Chamber will hear the case and deliver a final judgment. If the referral request is refused, the Chamber judgment will become final on that day. If no request is made, the Chamber judgment becomes final three months after its delivery.

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