Having $50 billion of assets under potential seizure is enough to make anyone whince. However, despite a quickly worded statement on the Yukos award, Vladimir Putin seems less than anxious to find a resolution. We think we know why, and it's very concerning.
As The FT reports confirming our earlier comments:
The award is a landmark not just for its size – 20 times the previous record for an arbitration ruling. The tribunal also found definitively that Russia’s pursuit of Yukos and its independently-minded main shareholder, Mikhail Khodorkovsky, a decade ago was politically motivated.
Though Russia cannot appeal against the award, Moscow said it would pursue all legal avenues for trying to get it “set aside”.
Even if the ruling stands, shareholders face a tortuous battle trying to enforce it. If Moscow refuses to pay, they must pursue Russian sovereign commercial assets in the 150 countries that are party to the so-called 1958 New York Convention on enforcing arbitration awards.
But perhaps this explains why Putin is not coming out swinging, as The FT concludes,
One person close to Mr Putin said the Yukos ruling was insignificant in light of the bigger geopolitical stand-off over Ukraine.
“There is a war coming in Europe,” he said. “Do you really think this matters?”