Page last updated at 11:33 GMT, Thursday, 4 March 2010

Yukos case against Russia begins at European court

Yukos lawyer Piers Gardner
The hearing is starting six years after the claim was first made

The European Court of Human Rights (ECHR) has begun hearing a complaint from collapsed Russian oil company Yukos against the Russian government.

Yukos first faced allegations of tax fraud in 2002 and was ultimately liquidated in 2007.

But the firm claims that it was "targeted" by the Russian authorities and illegally driven out of business.

Yukos representatives first filed the claim with the ECHR in 2004. They are seeking $98bn (£65bn) in compensation.

Yukos founder Mikhail Khodorkovsky was jailed for eight years in 2005 for tax evasion and other offences.

'Arbitrary and discriminatory'

Russian authorities began pursuing Yukos in 2002, accusing it of creating shell companies to hide revenue from the tax authorities.

Mikhail Khodorkovsky arrives at a court in Moscow
Yukos founder Mikhail Khodorkovsky was jailed in 2005

Yukos, once Russia's biggest oil company, struggled to survive after facing a series of tax demands totalling $27bn.

It eventually had its assets frozen and was forced to sell its shares in other companies.

The firm was declared insolvent in 2006 and was liquidated the following year.

Yukos claims that the Russian government's actions were "unlawful, disproportionate, arbitrary and discriminatory, and amounted to disguised expropriation" of the company.

The ECHR agrees to hear about one in 20 applications that it receives.

Its rulings are binding on all 47 members of the Council of Europe, which includes Russia.

Past rulings have obliged governments to amend legislation and administrative practices.

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