Yukos US bankruptcy order prompts legal tug of war with Russia

[JURIST] US Bankruptcy Judge Letitia Clark took jurisdiction Thursday of a bankruptcy claim filed Tuesday by Russian oil giant Yukos, issuing a temporary 10-day injunction against the Russian government's sale of any Yukos assets and setting off a legal tug of war with Russian authorities over what law should govern the future of the company. Read the full text of the memorandum opinion here [PDF]. Russian officials said Friday that notwithstanding the US court order they would go ahead with their planned auction of Yuganskneftegaz, the main Yukos production arm, to pay back taxes allegedly due the Russian government. The Russian RIA-Novosti news agency quoted a Russian Foreign Ministry statement as saying that

The verdict prohibits Russian juridical persons particular action authorized by the Russian legislation within the Russian Federation. This, and whatever other decision of a similar kind by a U.S.-based law court, has no legal force in Russia unless approved by a Russian court...

This is, doubtless, a legal matter, and the ministry sees Yukos' point as the company recurs to whatever legal means to come up for its interests, including an appeal to a court based in the United States.

The ministry greets the American court's concern for the law complied with in public interest, whether in the U.S., Russia or anywhere else. It baffles the Foreign Ministry PR, however, to see just why the court made so bold as to evaluate Russian authorities' moves from the viewpoint of the Russian law and within the Russian legal system, as its own verdict says. Such activities are within the prerogative of Russian law courts alone, stresses the ministry.
RIA-Novosti has more on the Foreign Ministry statement. After the US court order Yukos issued a statement welcoming the ruling and saying that "While Russian authorities have stated their intention to proceed with the auction, we hope the ruling will lead international banks and other parties to reconsider their participation." Read the full Yukos release here. Yukos is posting all its bankruptcy documentation on a special website. Reuters has more on the Yukos bankruptcy filing.

 

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