Moscow Court Rules Against Yukos Capital - Who Would Have Guessed...

When Alexander Litvinenko was poisoned in London last year, the expected and understandable reaction for many was to point fingers at Vladimir Putin as the main culprit. Not that details were known or there has been any direct evidence of the Russian President playing professor Moriarty. It did not matter because the context of Mr. Putin's behavior, his rule, his policies and his past made is so very believable and probable that he had something to do with the murder.

When Mikhail Khodorkovsky of Yukos, was arrested, I, like many others believed that Putin - The President of Russian Federation, not some oil shark or a corporate raider after all - was crushing his potential political opponent. Feudalism for sure but at least he had some interests of the country in mind like any autocratic leader would. They do have these interests at heard, don't they?

That impression gradually subsided and was completely reversed when I learned of appointment of one Igor Sechin, Putin's long time confidant and an errand boy to become a top dog in Rosneft, a quasi private-state oil company, and when subsequently Rosneft became the primary beneficiary of the state instituted shameless devouring of what promised at one time to be the first real Western type Russian corporation - Khodorkovsky's Yukos. At that time, facts just lined up so well that a simple conclusion could not have been avoided - the whole kabuki theater has been set up for personal gain of Mr. Putin and his coterie. A very shallow behavior for a president of any country, except maybe Nigeria or Zimbabwe.

So, it is not a surprise that red flags came up right away while reading a Kommersant account [link in Russian] of The Moscow City Court of Arbitration decision to nullify the previous ruling by The International Court of Arbitration in favor of Yukos Capital and against Rosfneft. Previous action of Russian power structure related to Yukos were so blatantly in your face that the first thought that comes to mind is "Yeah, right, I wonder why." A state branch of some kind makes a decision in favor of Rosneft and against some entity related to Yukos. Now, how strange is that?!

Unfortunately Kommersant Daily did not have the article on its English side of the web site. I sometimes wonder why are there two distinctly different faces to Kommersant? So here is my quick translation of one of the paragraphs with my comments in square brackets:

The Law on International Business Arbitration [presumably a Russian Federation statute] allows nullification of rulings only in extreme cases, specifically when Arbiters had made grave procedural violations. Rosneft [which filed a motion to reverse the previous ruling] found [read - claimed] two [procedural] violations: the company did not have enough time to study documents and that Arbiters had a conflict of interest. Rosneft claimed that the conflict of interest resulted from participation of two of the three Arbiters in Arbitrage Conferences in Moscow and in Vienna, while a Law firm by the name of Nomos was on the list of conference organizers, and that same law firm later represented Yukos Capital before the International Court of Arbitration... 

Further in the article, Kommersant refers to a Rosneft legal counsel as claiming that no quid pro quo was necessary to establish a conflict of interest, but a simple contact between Arbiters [as conference participants] with conference organizers [of while Nomos was one]. An obvious conflict of interest if you ask me, exacerbated by both parties actually having a gall to be in the same city at the same time.

It appears that Russia has finally discovered the rule of law, doesn't it? Unfortunately, just like in the case of Moscow Mayor Yuri Luzkov, the rule of law is used to take a letter of the law to defeat the purpose of the law. When a court has been politicized, how (un)ruly is the law?

It is not clear, states Kommersant if the nullification was a result of the court agreeing with Rosneft's claim or not, but previous legalese frivolity of Russian officialdom makes it irrelevant. Just like it was with the Litvinenko affair.

One just has to ask if power structures of Russian officialdom understand how much mistrust do they generate both internally and externally by that in your face thuggish attitude? Or is it the case when lack of critical media contributes to degradation of critical thinking among the rulers themselves, making them sanitized to awkwardness of their own authoritarian actions. This is the road to eventual downfall of any authoritarian structure. Crushing dissent and cutting off critical media will eventually detach state decision makers from reality and they will start making clumsy laughable and dangerous mistakes.

This applies to all levels of state power where Tolstoy's "Puny Napoleons" will mimic their big bosses with eagerness and glee. Look up Siberian Light's account of Kasparov's travel problems: a farcical example of completely unnecessary knee jerk reaction of petty policy enforcers.

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Comments
Very well written, Gospodin Vatomsky! I suppose this is what "dictatorship of law," a favorite phrase of Putin's and Mussolini's, really means.
# Posted By Pēteris Cedriņš | 5/22/07 5:42 AM
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