NEWS

Yukos Bankruptcy Liquidator's Acts Invalidated in the Netherlands

2 November 2007

On 31 October 2007 the District Court of Amsterdam gave a landmark judgment on the non-recognition of foreign insolvency proceedings. The court refused to recognise the authority of a Russian bankruptcy liquidator appointed in respect of Yukos Oil Co to vote the shares of the Yukos' Dutch subsidiary, Yukos Finance BV. The court held that huge and unexpected Russian tax assessments were the primary cause of Yukos Oil Co's bankruptcy in Russia. The fact that the huge tax assessments were raised unexpectedly, that freezing orders imposed by the Russian courts prevented Yukos from paying them and the unfairness and inadequacy of the procedures for challenging them were unfair contrary to ECHR and general standards of due process. As a result, the appointment and actions of the Russian bankruptcy liquidator could not be recognised by the Dutch courts on public policy grounds. The bankruptcy liquidator's purported dismissal of the previous management of Yukos BV and all other acts undertaken in respect of that Dutch company on his purported authority, were invalid and should be reversed.

Piers Gardner of Monckton Chambers was part of the team, led by NautaDutilh, Amsterdam, instructed by the successful previous management of Yukos Finance BV and by the company.

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Piers Gardner