Court Watch
Finally, the Tribunal concluded that the provisional equidistance line must be adjusted. Although the Tribunal opted for the method invoked by India, it considered necessary an adjustment of the provi- sional equidistance line as to provide a balance for Bangladesh regarding the areas beyond 200 nm. It cited the Maritime Delimitation in the Black Sea case (Romania v. Ukraine) that allowed “coasts of the Parties to produce their effects regarding the maritime entitlements, in a reasonable and mutually balanced way”, notwithstanding the third states’ rights.
In essence, the decision creates a compromise between the claims of the Parties. Namely, the key demand of access to the extended continental shelf has been achieved by Bangladesh as well as protecting the rights of India over it.
* Submitted by Iuliana-Raluca Luca 10
European Court of Human Rights Rules in Favor of Former Russian Oil Company
On July 31, 2014 the European Court of Human Rights (ECtHR) issued a ruling ordering Russia to pay over $2.5 billion USD to Yukos Oil, formerly Russia’s largest oil producer, for unfair tax pro- cedures. Yukos originally sought $98 billion USD in recovery, the largest claim the Court has ever received. The large sanction issued by the ECtHR was also unprecedented. In addition, Russia faces a steep penalty of $50 billion USD after a tribunal in The Hague held that Russia illegally bankrupted Yukos. The Court found that Prime Minister Vladi- mir Putin worked to disband Yukos from 2004 to 2007 by enforcing severe tax penalties on the company. Yukos was given strict deadlines to pay such sanctions and its extension requests were denied, resulting in the forced liquidation of the company’s major assets.
Yukos and the Russian government have experi- enced much legal controversy over the years. In 2003, Russian officials arrested Yukos owners,
Mikhail Khodorkovsky and Platon Lebedev, for al- leged fraud and tax evasion. Both owners were convicted and sentenced on charges of embezzle- ment. Prior to this, Khodorkovsky and Lebedev were serving eight-year sentences for tax evasion. In 2010, Mikhail Kasyanov, former Russian prime minister, testified that Khodorkovsky’s arrest was politically motivated. Khodorkovsky allegedly sent funds to the Communist party without Putin’s ap- proval.
In the current Yukos v. Russia case, the ECtHR ruled that Russia did not abuse legal proceedings to expropriate the company; however, Russia’s en- forcement proceedings against Yukos were dispro- portionate to their intended purpose. The ECtHR found that Russia violated Article 1 of Protocol No. 1 and Article 6 of the European Convention of Hu- man Rights. The ruling was delivered by a vote of 5-2 with the judges from Russia and Azerbaijan dissenting.
In Yukos, the Court first considered whether or not the seizure of Yukos’ assets and the imposed tax fees violated the company’s rights under Article 1 of Protocol No. 1 of the European Convention on Human Rights. The Court found that Russia’s enforcement proceedings were lawful because they fell within the country’s sovereignty regard- ing general interest and fiscal payments security under Article 1.
The Court’s second contention was whether or not the enforcement proceedings were reasonably proportionate to their objective. To determine this, the court examined a number of factors that au- thorities are obligated to carefully adhere to during the enforcement process. Such factors include: (1) the character and amount of a company’s existing and potential debt; (2) the nature of business and the weight of the company in the domestic econo- my; (3) the company’s current economic condition and ability to withstand the enforcement proceed- ings; (4) the economic and social consequences of the enforcement options; and (5) the disposition
ILSA Quarterly » volume 23 » issue 1 » October 2014
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