Court hears outline of Russia’s treatment of Mikhail Khodorkovsky

Ex-Russian oligarch seeks release of €100m frozen in 2011 at the request of gardaí

A lengthy outline of Russia's treatment of the former oligarch, Mikhail Khodorkovsky, given to the gardaí in May 2011 after more than €100 million was frozen by the Irish courts, has been disclosed as part of an application to have the funds released.

The submission, by UK law firm Peters and Peters, outlines how a number of jurisdictions have refused to extradite former Yukos Oil executives to the Russian Federation, and how bodies including the Parliamentary Assembly of the Council of Europe and the European Court of Human Rights, have criticised the conviction and imprisonment of Mr Khodorkovsky.

The court has been told the Garda Bureau of Fraud Investigation is continuing to examine whether the €100 million may be the proceeds of criminal activity.

Mr Khodorkovsky was the majority owner of Yukos Oil, the largest oil company in Russia in the early 2000s.


However after he publicly clashed with Russian president Vladimir Putin in 2003, he was arrested on charges of tax evasion, leading to a series of events that saw the company's assets seized and Mr Khodorkovsky going to jail.

The Peters and Peters submission includes details of the case of Antonio Valdes Garcia, a Spanish-Russian former executive with the Yukos group who, the court was told, was tortured after he voluntarily returned to Russia from Spain having been assured that charges against him would be dropped.

Remy Farrell SC, for Mr Khodorkovsky, said Mr Valdes Garcia suffered a shattered jaw and a broken hip, with the Russian authorities saying he had fallen from a third floor window. He escaped back to Spain and an extradition request from Russia was refused by Spain in 2009.

The submission also covers the case of former Yukos executive, the late Vasily Aleksanyan, who was refused access to treatment while in custody in Russia and terminally ill with AIDS, because he would not give evidence against Mr Khodorkovsky.

A seven-judge ruling by the European Court of Human Rights, that included a Russian judge, found that what was done to Mr Aleksanyan constituted inhuman and degrading treatment.

Repeat orders

The funds which Mr Khodorkovsky wants released, more than €100 million in Irish-domiciled funds, were frozen by the District Court in March 2011 at the request of the gardaí.

Successive 28-day repeat orders since then have meant the funds remain frozen under money laundering legislation, despite extensive engagement between Mr Khodorkovsky, who was pardoned by Mr Putin in 2013, and the Garda Bureau of Fraud Investigation.

Mr Farrell said the “sole predicative basis” for the gardaí believing the funds were linked with criminality, were the 2005 and 2010 convictions of Mr Khodorkovsky, which have been condemned as politically motivated around the western world.

There was no dispute over the source of the funds, which he said came from dividend payments and share buy-backs with Yukos shareholders in 2002 and 2003.

He said the two sets of charges brought against Mr Khodorkovsky, and his business associate, Platon Lebedev were mutually exclusive as the first convictions were for not paying tax on Yukos profits, while the second set of convictions arose from charges that they stole oil worth $25 billion (€23.5 billion) over a six year period, from Yukos.

This was the entire annual production of Yukos for the six year period, something which had not been noticed at the time by the Yukos auditors, PWC, or the Russian authorities. If the second set of charges were true, there would not have been any profits to pay tax on.

The UK, Mr Farrell said, is refusing to extradite people associated with Mr Khodorkovsky to Russia, because of concerns that they would not receive a fair trial.

The Peters and Peters report cited cases where extradition requests by Russia in cases linked to Yukos had been also refused in the Czech Republic, Switzerland, Cyprus, Lithuania, and Israel, and a mutual legal assistance request refused by Liechtenstein.

Judge Timothy Lucey heard that at the time Mr Khodorkovsky clashed with Mr Putin, a possible merger with a western oil company was being completed.

The jailing of Mr Khodorkovsky and the seizing of the Yukos assets, ensured that the oil remained under Russian control, while neutralising a potential political opponent of Mr Putin’s, and serving as a warning to others.

Michael McDowell SC, instructed by the Chief State Solicitor, told Judge Lucey it was accepted that the money came from Yukos.

The question was whether it came from Yukos in the matter claimed by Mr Khodorkovsky in his affidavit.

The trial continues.

Colm Keena

Colm Keena

Colm Keena is an Irish Times journalist. He was previously legal-affairs correspondent and public-affairs correspondent