Yukos Universal v. Russia

- the writ of summons;

- the bailiff's notification in pursuance of section 126 of the Dutch Code of Civil Procedure served at the request of Rebgun et al. on Godfrey et al. on 31 October 2006;

- the amended bailiffs notification served at the request of Rebgun et al. on Godfrey et al. on 1 November 2006;

- the document containing exhibits, with exhibits, of Godfrey et al. ;

- the statement of defence, with exhibits;

- the document containing exhibits, with exhibits, of Rebgun et al.;

- the statement of reply, with exhibits;

- the statement of rejoinder; counsels’ pleadings and the documents submitted on that occasion.

Judgment was scheduled in the end.

Shortly thereafter OAO Rosneft Oil Company (hereinafter: Rosneft), a Russian state enterprise, obtained all the shares in Baikal Finance Group. Yuganskneftegaz is Rosneft’s most important asset.

I am instructed by Yukos Oil Company to lodge an application under Article 34 of the European Convention on Human Rights with the European Court of Human Rights against the Russian Federation and to request its immediate registration. (...)

The application concerns the Company’s right to the peaceful enjoyment of its possessions and to effective domestic remedies and is urgent.

It arises in the context of a decision on 14 April 2004 by the Russian Tax Ministry to issue orders to pay tax, penalty interest and fines totalling over RUR 99 Billion (approximately Euro 2.9 Billion). The obligations created by those order to pay (which are unlawful and disputed) were secured against the Company by an injunction granted by the Moscow Court of Arbitration on 15 April 2004; that injunction forbids the Company from "alienating, (sic) encumbering in any way its property". However, the orders to pay are enforceable by executive act of the Tax Ministry. The present application concerns the risk that such execution will be sought, the consequences for the company and the lack of available and effective domestic remedies.

The Russian insolvency proceedings

The Sellers jointly agree that in the period on and from the date of this Agreement to and including the Settlement Date they shall by taking the steps described in Schedule 8, endeavour to file and have accepted the Application for Bankruptcy (...) as soon as is reasonably practicable following the date of this Agreement (...).

The Moscow Arbitrazh Court

Has established the following: In its riding dated March 9, 2006 the Moscow arbitrazh court acknowledged the petition of bankruptcy creditors for bankruptcy of OAO "Oil Company 'YUKOS"', initiated the proceeding (...).

In the ruling dated March 28, 2006 bankruptcy creditors in OAO "Oil Company 'YUKOS’" bankruptcy proceedings were replaced by "NK 'Rosneft"’.

In the present session the court shall review the Justness of the applicant claims towards the debtor and whether to initiate the supervision procedure.

The debtor counterpleads initiation of the supervision procedure, considers applicants claims unjustified and applies to court to reject the supervision procedure and close a case.

After hearing the persons participating in the case, studying the case papers, presented documents, the court came to a conclusion that the applicants claims shall be deemed justified, to initiate a supervision procedure in respect of the debtor and as the claim has been approved by the effective ruling of the Moscow Arbitrazh Court dated December 21, 2005, not changed by the ruling of the federal Arbitrazh Court of the Moscow Circuit dated March 2, 2006.

(...)

Therefore the debt in amount of 472,787,663.10 and interest in amount of 9,459,143.18 Dollars, that is equal to 12,711,846,886.77 Rubles and 264,198,598.58 Rubles respectively at the rate as of March 6, 2006 (bankruptcy petition filing date).

The debtor did not presented evidences with respect, to settlement of the aforesaid amount.

THE COURT HAS RULED

To justify the claims of OAO "NK 'Rosneft"’ against OAO "Oil Company 'YUKOS'".

To initiate the supervision procedure in respect of OAO "Oil Company 'YUKOS’".

To incorporate a claim of OAO "NK 'Rosneft"' amounting to 12,711,846,886.77 Rubles and 264,198,598.58 Rubles in the register of creditors claims of the third line.

To approve Rebgun Eduard Konstantinovich (...) as a temporary receiver of OAO "Oil Company 'YUKOS’" (...).

At the creditors’ meeting, a financial rehabilitation plan proposed by Yukos Oil was presented.

In so far as is relevant here the report of the creditor’s meeting, in English translation, contains the following:

"The item put to the vote: To take a decision on implementing the financial rehabilitation procedure (...)

"FOR": 16 ballots comprising 14,567,863,594 votes (...)

"AGAINST": 4 ballots comprising of 242,983,738,682 votes (...) "ABSTAINED": 3 ballots comprising 306,523,672 votes (...) (...)

The item put to the vote: To issue a decision on filing a petition with an arbitrazh court to acknowledge the debtor a bankrupt and to initiate the relevant bankruptcy proceedings (...) "FOR": 4 ballots comprising of 242,977,843,105 votes (...)

"AGAINST": 15 ballots comprising 14,564,992,054 votes (...) "ABSTAINED": 4 ballots comprising 315,290,789 votes (...)

The Russian Federal Tax Authorities, Rosneft, Yuganskneftegaz and one minor creditor voted in favour of the bankruptcy application and against the implementation of the financial rehabilitation plan voted.

The Moscow Arbitrazh Court (...)

Having considered in the court hearing the bankruptcy case of OAO "YUKOS Oil Company".

With the following persons attending the court hearing:

Representatives of the Federal Tax Service of Russia: (...)

Representatives of the Interim Receiver of the Debtor (OAO "YUKOS Oil Company"): (...) Representatives of the Debtor (OAO "YUKOS Oil Company"): (...).

Has established the following: In its ruling dated March 9, 2006, the Moscow Arbitrazh Court has accepted for consideration the petition filed by bankruptcy creditors seeking to acknowledge OAO "YUKOS Oil Company" bankrupt (...).

By the ruling dated March 28, 2006, the Moscow Arbitrazh Court has introduced rhe supervision procedure with respect to the Debtor and has appointed Mr. E.K. Rebgun as Interim Receiver [of the Debtor].

(...)

In his progress report, the Interim Receiver explained that on the basis of the financial analysis included in the case file, he believed that the activities of OAO "YUKOS Oil Company" became uneconomic in 2003, which fact is refected in the company’s balance sheet reports. Wholesale trade in oil, which ensured one third of revenues of OAO "YUKOS Oil Company", stopped in 2004.

(...)

On July 20. 2006, the Interim Receiver conducted the creditors' meeting, and the meeting decided to file a petition with the court seeking to acknowledge the Debtor a bankrupt and to implement (he receivership procedure against the Debtor.

A representative of the Debtor raised objections, did not accept that the Debtor should be acknowledged a bankrupt, and explained that the debtor was able to repay the existing indebtedness and that the Interim Receiver incorrectly estimated the debtor’s assets.

Having heard the opinion of the participants in the case, and having reviewed the case materials and the documents submitted, the court has established that the debtor has signs of bankruptcy as determined in Article 3 of the Federal Law "On Insolvency (Bankruptcy)", namely: the debtor had failed to satisfy the creditors’ monetary claims within three months after the due date.

It follows from the Protocol of the 1st creditors' meeting of OAO "YUKOS Oil Company" dated July 20-25, 2006, that the meeting was attended by 24 participants in the meeting, which constituted 99,61% of the total number of votes of creditors and authorized bodies, as well as by representatives and employees of the Debtor.

The said meeting, by a majority vote of the creditors, decided not to file a petition with the arbitrazh court on implementing the financial rehabilitation procedure with respect to the Debtor; (...) and to file a petition with the arbitrazh court seeking to acknowledge the Debtor a bankrupt and to initiate the relevant receivership proceedings with respect to the Debtor.

(...)

The creditors’ meeting decided to approve Interim Receiver of OAO "YUKOS Oil Company" Mr. E.K. Rebgun as the Receiver of the Debtor, OAO "YUKOS Oil Company".(...)

HAS RESOLVED:

To acknowledge OAO "YUKOS Oil Company" bankrupt.

To initiate the receivership proceedings with respect to the Debtor, OAO "YUKOS Oil Company", for a term of one year.

To approve Mr. Eduard Konstantinovich Rebgun (...) as the Receiver of OAO "YUKOS Oil Company" (...)

(...)

To terminate the powers of the head of the Debtor and other management bodies of the Debtor, except for the powers of the Debtor’s management bodies authorized, on the basis of the Debtor's foundation documents, to take decisions on entering into major transactions and on entering into agreements setting forth the terms and conditions of granting monetary funds by a third party of third parties for the purpose of fulfilling the Debtor’s obligations.

(...)

This Resolution may be appealed in the appellate instance of the arbitrazh court (the 9th Arbitrazh Appellate Court) within one (1) month of its issuance in full, and in the cassation instance of the arbitrazh court (the Federal Arbitrazh Court of the Moscow Circuit) within a time period not exceeding two (2) months from the date the appealed judicial act enters into legal force.

The Ninth Arbitrazh Appellate Court

(...)

Having considered the appeal filed by OAO "Oil Company 'Yukos’" against the Decision of the Arbitrazh Court of the City of Moscow, dated August 4, 2006, seeking to acknowledge the debtor bankrupt and to iniate in its respect bankruptcy proceedings in case No. (...) on the insolvency of OAO "Oil Company ’Yukos,"'

With the following representatives participating in the hearing:

(...) - on behalf of the Interim Receiver,

(...), on behalf of OAO "Oil Company 'Rosneft,’" and

(...)- on behalf of the meeting of creditors of OAO "Oil Company 'Yukos,

ESTABLISHED:

In accordance with the Decision of the Arbitrazh Court of the City of Moscow, dated August 4, 2006, the OAO "Oil Company 'Yukos ’" was acknowledged bankrupt, bankruptcy proceedings were initiated in its respect, the receiver was approved and it was resolved to terminate the authority of the head and other management bodies of the debtor.

OAO "Oil Company 'Yukos '" disagreed with the adopted decision, considering that it has been adopted in violation of the norms of substantive and procedural law, and applied to the Ninth Arbitrazh Appellate Court with an appeal in which it seeks to have the decision cancelled in its entirety and to have a new judgment issued.

The plaintiff indicated that the appealed judicial act incurs dismissal of the debtor’s management and compulsory alienation of its property, which contradicts national legislation of Russia and does not comply with the requirement of the quality of Law established by the Convention on the Protection of Human Rights and Fundamental Freedoms, and represents interference into the rights to respect private property. In the debtor’s opinion, there were no grounds to make a conclusion about the negative balance between its liabilities and the cost of assets and, as a consequence, the debtor’s inability to satisfy creditors’ claims. Additional tax liability asserted in accordance with the results of tax audits for 2000-2003 was based on an unpredictable new interpretation of tax legislation which, in the sense of the Convention, does not comply with the requirement of the legality. In addition, the Plaintiff specifies that the court of the first (trial) instance, by its ruling of August 4, 2006, illegally rejected the motion on the suspension of the proceedings in the case until the debtor’s complaint is considered by the European Court. This circumstance, in the opinion of the plaintiff, caused, by virtue of Paragraph 1, Article 52 and Paragraph 2, Article 58 of the Federal Law "On Insolvency (Bankruptcy)" the issuance of the incorrect indecision, since the establishment of the signs of bankruptcy depends on the legality and reasonability of creditors' claims.

OAO "Oil Company 'Yukos, duly notified of the time and place of consideration of the appeal, failed to ensure the appearance of its representative in the appellate court. Under such circumstances the appellate court considers it possible to consider the case in the absence of representatives of the above-mentioned persons, according to Articles 123 and 156 of the RF Arbitrazh Procedure Code ("RFAPC").

(...)

Having reviewed materials of the case, having discussed the arguments of the appeal, having heard representatives of the participants in the case and having verified the legality of the appealed judicial act under the procedure set forth by Chapter 34 of the RF Arbitrazh Procedure Code, the Ninth Arbitrazh Appellate Court came to a conclusion that there were no grounds for cancelling decision of the first (trial) court.

(...)

By the majority of votes of creditors in bankruptcy at the above-mentioned meeting the following decisions were adopted: not to apply to an arbitrazh court with a motion to introduce a financial rehabilitation procedure with respect to the debtor; not to apply to the arbitrazh court with a motion to introduce external management procedure with respect to the debtor; to file a motion with the court to acknowledge the debtor bankrupt and to introduce in its respect bankruptcy proceedings.

(...)

In accordance with Paragraph 1, Article 75 of the Federal Law "On Insolvency (Bankruptcy)," bankruptcy’ proceedings shall be opened by the arbitrazh court on the basis of a decision of the first creditors’ meetings in the absence of the grounds for introducing financial rehabilitation and external management procedures.

(...)

The court of the appellate instance considers that arguments of the appeal are groundless, since, on their merits, they lack reasonable grounds for canceling the disputed decision.

Among one of the arguments in support of the cancellation of the disputed decision the plaintiff specified the acceptance of its complaints by the European Court, which sets forth the grounds for acknowledging of the illegality the debtor's indebtedness to the Russian Federation due to the violation thereby of the rights and fundamental freedoms of OAO "Oil Company 'Yukos'" in the form of an arbitrary accrual thereon of tax liabilities, illegal alienation, in favor of the company owned by the RF, of the main production asset of the debtor at an extremely underestimated price, and the adoption, in the course of enforcement proceedings, of unreasonable and inadequate measures in the form of the arrest of the entire debtor's property.

In the interim, the plaintiff, specifying such circumstances, failed to provide, neither to the court of the first (trial) instance, nor to the court of the appellate instance, evidence of the submittal of the claim to the European Court, as well as evidence of its acceptance. No evidence has been presented on the assignment to the complaint, as has been specified by the plaintiff (appellant), of the priority in accordance with Rule 41 of the Procedural Rules of the European Court of Human Rights and of its transfer to the First Section of the Court.

The absence of the above-mentioned evidence made, in fact, impossible to consider the debtor’s argument of the necessity to suspend proceedings in the case prior to the adoption of a decision by the European Court. The non-provision of this evidence to the court of the appellate instance also confirms the reasonability of actions of the court of the first (trial) instance to adopt a decision in the case without suspending the cotresponding proceedings.

Arguments set forth by the debtor with respect to the allegedly illegal acknowledgement of its indebtedness to the Russian Federation lack legal and evidentiary basis, and are, in essence, groundless statements aimed at the revaluation of circumstances of the violation thereby of tax liability already established in respect of the debtor.

Without disputing arguments of the appeal on the binding character of decisions of the European Court of Human Rights for the Russian Federation, in the opinion of the court of the appellate instance, as regards the adoption of the disputed decision there are no legal grounds to consider that the Russian Federation and the Arbitrazh Court of the City of Moscow violated the norms of either national or international law.

The plaintiff’s argument that its rights have been violated by the dismissal of the debtor’s management and compulsory-' alienation of its property may not contradict the European Convention for the Protection of Human Rights and Fundamental Freedoms, since this international act contemplates protection of the groundless and illegally violated rights of its beneficiaries.

As follows from the materials of this case, judicial acts confirmed prolonged violation by the debtor of tax legislation, in connection with which he was held liable for deferred payments several times. This fact was established, including by the ruling adopted by the court of the first instance, and by the resolution of the appellate instance in the course of the consideration of the request of the RF Federal Tax Service to include it in the register of claims of Yukos’ creditors. The fact that most part of claims included in the register of the debtor's creditors is asserted by the Russian Federation, is not a unique peculiarity of this case, but reflects the actual relationship between a taxpayer that violated its public duty and the State.

The violation by the debtor of the tax liability provided by legislation, and, as a result, the occurrence of consequences provided by laws, including the Tax Code of the RF and the Federal Law "Ou

Insolvency (Bankruptcy)," may not be rendered as illegal interference into private affairs of the debtor and may not evidence about the violation of its title to the property in its possession.

The Tax Code of the RF is binding for all persons by virtue of the obligation, provided in Article 57 of the RF Constitution, for all persons to pay taxes and charges established by law.

Moreover, in accordance with Article 19 of the Constitution, all persons are equal before the law and court. The state must guarantee the equality of rights and freedoms of a human being and a citizen irrespective of his/her sex, race, nationality, language, origin, proprietary and other position.

The debtor failed to prove that tax claims brought against it contradict Russian law, violate principles of Constitution on the equal approach to it by the law and court.

Arguments of the appeal alleging violation of the principle of legality in the issuance of the disputed fudicial act may not be deemed valid, since the debtor failed to specify violations of the norms of substantive law considering that these laws do not comply with the criteria of accessibility and legality in the sense of the Convention. Such argument does not comply with the requirements of (he RF APC providing, as the basis for the cancellation of the disputed act, an indication to its incompliance with the specific nonns of procedural or substantive law, and not with the sense of specific principles mentioned by the debtor.

The lack of evidentiary support to the arguments of the appeal on the merits may not provide the basis for the cancellation of the legal and reasonable decision issued by the court of the first (trial) instance.

(...)

RESOLVED:

To leave standing decision of the Arbitrazh Court of the City of Moscow, dated August 4, 2006, in case No. A40-11836/06-88-35E, and to reject the appeal.

POWER OF ATTORNEY

Receiver of the Open Joint Stock Company "YUKOS Oil Company" (the "Company") (...), EDUARD KONSTANTINOVICH REBGUN (...) (the "Grantor"), does hereby make and constitute:

• Mr. Gerhard H. Gispen;

(...)

Acting jointly or severally, as its true and lawful Attorneys-in-fact of the Company, with full power and authority to act, as herein described, in the name and on behalf of the Company as follows:

1. To exercise all rights attached to the shares that the Grantor holds in Yukos Finance B. V. (...), including but not limited to, the right to convene and attend an (extraordinary) general meeting of shareholders in which the dismissal with immediate effect of Mr. David Andrew Godfrey and Mr. Bruce Kelvern Misamore as managing directors of Yukos Finance B. V. will be discussed and to vote in favour of this dismissal as a result of which the employment contracts of Mr, David Andrew Godfrey and Mr. Bruce Kelvern Misamore also will be terminated.

2. To execute all such documents and to do all such other things as may, at the sole and absolute discretion of the Attorney (Attorneys), be required to be signed, executed or delivered by the Company, or done by the Company in connection with this power of attorney or be appropriate or necessary for effectively or expeditiously carrying out the objects herein authorised.

3. To appoint any substitute (substitutes) for any and all of the above purposes and to revoke such appointment at pleasure.

4. This power of attorney is governed by and shall be cons trued in accordance with Netherlands law, to the fullest extent permissible

Shareholder's resolution

The undersigned :

Gerhard Hendrik Gispen, attorney if fact, appointed by Mr E.K. Rebgun, in his capacity as court appointed insolvency office holder of the Open Joint Stock Company Yukos Oil Company (the "Shareholder ") (...)

WHEREAS :

(A) the Shareholder is the holder of the entire issued and outstanding capital of Yukos Finance B. V. (the "Company"), (...);

(...)

(D) pursuant to the provisions of article 20 of the articles of association of the Company, resolutions can be adopted outside a meeting;

(E) the Board of Management of the Company has been consulted of the decision to be taken and has approved thereof,

HEREBY RESOLVES:

to dismiss (ontslaan) David Andrew Godfrey and Bruce Kelvern Misamore as Managing Directors (statu fair bestuurders) of the Company with immediate effect as a result of which their employment with the Company, if any, will terminate all under the terms as stated by Mr Gispen and as recorded by Mr Jan-Mathijs Hermans, civil law notary in Rotterdam, the Netherlands, on this date at 16:43 hours

principally:

1. to render a declaratory judgment that all shareholders’ resolutions taken with regard to Yukos Finance, to the extent that they were taken by Rebgun in his capacity as receiver for Yukos Oil or by mr. Gispen, including but not restricted to the resolution of 11 August 2006 to dismiss Godfrey and Misamore as directors of Yukos Finance B.V., as well as the disputed resolution to appoint Shmelkov and Hogerbrugge as directors of Yukos Finance, are null and void;

2. to render a declaratory judgment that all decisions taken by Shmelkov and/or Hogerbrugge in their alleged capacity as directors of Yukos Finance B.V. are null and void.

alternatively:

1. to quash all shareholders’ resolutions relating to Yukos Finance, insofar as they were made by Rebgun in his capacity as receiver of Yukos Oil or by mr. Gispen, including but not restricted to the resolution of 11 August 2006 to dismiss Godfrey and Misamore as directors of Yukos Finance B.V., as well as the disputed resolutions to appoint Shmelkov and Hogerbrugge as directors of Yukos Finance;

2. to quash all the decisions taken by Shmelkov and/or Hogerbrugge in their alleged capacity as directors of Yukos Finance.

both principally and alternatively:

3. to order Rebgun to lend his immediate and unconditional cooperation to the reversal of the shareholders' resolutions he made in Yukos Finance and of their consequences, subject to apenalty of EUR 5,000,000 for each individual violation and of EUR 500,000 for each day that violation continues;

4. furthermore, to prohibit Rebgun from exercising any rights with respect to the shares of Yukos Finance or from having these rights exercised, subject to a penalty of EUR 5,000,000 for each individual violation and of EUR 500,000 for each day that violation continues;

5. to order Shmelkov and Hogerbrugge, both jointly and severally, to lend their immediate and unconditional cooperation to the reversal of the managerial decisions taken whether individually or jointly, in Yukos Finance and of their consequences, subject to a penalty of EUR 5,000,000 for each individual violation and of EUR 500,000 for each day that violation continues;

6. furthermore, to prohibit Shmelkov and Hogerbnigge from exercising any rights with respect to their alleged representative authority in Yukos Finance or from having these rights exercised, subject to a penalty of EUR 5,000,000 for each individual violation and of EUR 500,000 for each day that violation continues;

7. to order Rebgun, Shmelkov and Hogerbnigge jointly and severally to pay the costs of these proceedings and, moreover to order Shmelkov to pay the costs incurred in connection with the Russian translation of this writ and any costs of service/hand delivery of this summons in the Russian Federation

- unlawful tax assessments in the amount of many billions of dollars were imposed, which furthermore had to be paid within two days and comprised over 100% of the turnover;

- other oil companies that deployed the same tax facility as Yukos Oil were not assessed, which renders the tax assessments arbitrary;

- Yukos Oil was denied a fair trial with regard to these tax assessments;

- because of the freezing orders it was impossible for Yukos Oil to pay the alleged debts whereas the Russian State rejected all offers made by Yukos Oil to sell assets to pay the alleged debts;

- the crown jewel Yuganskneftegaz was auctioned off (or rather: expropriated) for a purchase price well below its market value, at an auction where a front man for Rosneft was the only bidder, since Western bidders were discouraged from placing their bids;

- the bankruptcy of Yukos Oil was declared even though Yukos Oil had more assets than debts;

- a rehabilitation plan in which all of the creditors were to be paid in full was rejected exclusively based on the fact that the three faces of the Russian government (Rosneft, Yuganskneftegaz and the Russian Federal Tax Authorities) voted against the plan, whereas the claim of the tax authorities does not exist and the claim of Yuganskneftegaz against the Yukos concern was unlawfully snatched away from her. Virtually all other creditors voted against the bankruptcy; moreover, other important creditors like Moravel and Yukos Capital were not admitted to the vote;

- Rosneft, Yuganskneftegaz and the Russian Federal Tax Authorities adopted the resolution to let Yukos Oil go bankrupt.

Since the bankruptcy of Yukos Oil cannot be recognized in the Netherlands, Rebgun’s alleged authority should not be recognised either. This means that, regardless of the question whether or not Rebgun is entitled to any right with regard to the shares in Yukos Finance including voting rights under Russian bankruptcy law, he is in any case not entitled to them under Dutch law. Therefore, all his decisions were taken without authority, are therefore in violation of the law, and for that reason are null and void pursuant to the provisions in Book 2 Section 14 of the Dutch Civil Code.

(i) the jurisdiction of the foreign court has a basis that is acceptable under international standards;

(ii) the foreign proceedings were conducted with due observance of the principles of due process of law;

(iii) the foreign judgment is not in violation of Dutch public order.

Godfrey et al. ’s assertions purport to argue, among other tilings, that the conditions for recognition of the bankruptcy order mentioned under (ii) and (iii) have not been met.

In its judgment of 4 August 2006 the arbitrazh court stated nothing whatsoever about the nature of the claims on Yukos Oil on which the bankruptcy application is based and the way in which these claims were effected.

Also in the appeal, the appeals court failed to give a substantive assessment of the way in which the tax assessments on which the bankruptcy application was based were determined. In the appeal, the appeals court considered that:

The plaintiff indicated that the appealed judicial act incurs dismissal of the debtor's management and compulsory alienation of its property, which contradicts national legislation of Russia and does not comply with the requirement of the quality of Law established by the Convention on the Protection of Human Rights and Fundamental Freedoms, and represents interference into the rights to respect private property).

In the debtor's opinion, there were no grounds to make a conclusion about the negative balance between its liabilities and the cost of assets and, as a consequence, the debtor's inability to satisfy creditors' claims. Additional tax liability asserted in accordance with the results of tax audits for 2000-2003 was based on an unpredictable new interpretation of tax legislation which, in the sense of the Convention, does not comply with the requirement of the legality.

In addition, the Plaintiff specifies that the court of the first (trial) instance, by its ruling of August 4, 2006, illegally rejected the motion on the suspension of the proceedings in the case until the debtor’s complaint is considered by the European Court. This circumstance, in the opinion of the plaintiff, caused, by virtue of Paragraph 1, Article 52 and Paragraph 2, Article 58 of the Federal Law "On Insolvency (Bankruptcy)" the issuance of the incorrect indecision, since the establishment of the signs of bankruptcy depends on the legality and reasonability of creditors’ claims.

made, in fact, impossible to consider the debtor’s argument of the necessity to suspend proceedings in the case prior to the adoption of a decision by the European Court.

in the opinion of the court of the appellate instance, as regards the adoption of the disputed decision there are no legal grounds to consider that the Russian Federation and the Arbitrazh Court of the City of Moscow violated the norms of either national or international law.

(…)

As follows from the materials of this casejudicial acts confirmed prolonged violation by the debtor of tax legislation, in connection with which he was held liable for deferred payments several times. This fact was established, including by the ruling adopted by the court of the first instance, and by the resolution of the appellate instance in the course of the consideration of the request of the RF Federal Tax Service to include it in the register of claims of Yukos’ creditors.

the major part of the Russian Tax Claims was based on the respective Russian court judicial acts which are currently effective and in legal force in the Russian Federation. Therefore, Russian Tax Claims can not be re-considered by the Bankruptcy Court while such judicial acts are in existence. (...) By virtue of Section 1 of Article 16 of the RF APC (Russian Federation Arbitrazh Procedure code, rb), the judicial acts which came into legal force are mandatory for all persons and state bodies (including other courts) on the territory of the Russian federation.

- passes a declaratory judgment that all Shareholders’ Resolutions in regard to Yukos Finance, in so far as taken by Rebgun in his capacity of receiver of Yukos Oil, including but not limited to the decision to dismiss Godfrey and Misamore as directors of Yukos Finance B.V. dated 11 August 2006 and the alleged decisions to appoint Shmelkov and Hogerbrugge as directors of Yukos Finance, are null and void;

- passes a declaratory judgment that all decisions taken by Shmelkov and/or Hogerbrugge in their supposed capacity of directors of Yukos Finance B.V. are null and void;

- orders Rebgun to lend his immediate and unconditional cooperation to the reversal of the Shareholders' Resolutions he made in Yukos Finance and of the consequences thereof, subject to a penalty of EUR 10,000 for each individual violation and of EUR 1,000 for each day that such violation continues, to a maximum of EUR 500,000;

- forbids Rebgun to exercise any rights with respect to the shares of Yukos Finance or to have these rights exercised, subject to a penalty of EUR 10,000 for each individual violation and of EUR 1,000 for each day that such violation continues, to a maximum of EUR 500,000;

- orders Shmelkov and Hogerbnigge, both jointly and severally, to lend their immediate and unconditional cooperation to the reversal of the managerial decisions taken in Yukos Finance and of the consequences thereof, whether individually or jointly, subject to a penalty of EUR 10,000 for each individual violation and of EUR 1,000 for each day that such violation continues, to a maximum of EUR 500,000;

- forbids Shmelkov and Hogerbnigge to exercise any rights with respect to their alleged representative authority in Yukos Finance or to have these rights exercised, subject to a penalty of EUR 10,000 for each individual violation and of EUR 1,000 for each day that such violation continues, to a maximum of EUR 500,000;

- orders Rebgun, Shmelkov and Hogerbnigge jointly and severally to pay the procedural costs on tlie side of Godfrey et al., estimated up to this judgment at EUR 332.87 in disbursements and EUR 1,808 in local counsel’s salary;

- orders Shmelkov to pay the costs incurred in connection with tlie Russian translation of the writ of summons, being EUR 10,882.06;

- declares the aforementioned orders and injunctions as well as the orders to pay the procedural costs immediately enforceable;

- dismisses all other applications.

This judgment was passed by mr. W. Tonkens-Gerkema, mr. C.S. Naardcn and mr.