Yukos Shareholder Suit Dismissed

Remember Yukos? The Kremlin took a shine to the post-Soviet era oil giant a few years ago, and, as American shareholders tell it, re-nationalized the company without so much as a “thank you."

In response, the shareholders sued the Russian government and several Russian oil companies, claiming they had conspired to wrench the company’s assets from its owners by levying illegal and confiscatory taxes on Yukos, intimidating Yukos executives and using bankruptcy proceedings to paralyze Yukos’s non-Russian-based managers.

Maybe so, wrote U.S. District Judge Colleen Kollar-Kotelly in a 51-page opinion dismissing the claims today, but the case is not hers to decide. Kollar-Kotelly, striking a sympathetic tone, wrote that after a careful review, she “could not reach the merits of Plaintiffs’ claims based on the doctrines of sovereign immunity and personal jurisdiction.”

“These and other allegations contained throughout Plaintiffs’ 116-page, 424-paragraph Complaint tell a troubling story if proven true,” Kollar-Kotelly said. “Notwithstanding the foregoing, this Court is one of limited jurisdiction.”

Covington & Burling represented the shareholders; Baker Botts represented the Russian government; and Winston & Strawn and Weil, Gotshal & Manges represented the Russian oil companies.