Yukos Investors Settle Dispute With Rosneft

MOSCOW--Russian state-controlled energy group OAO Rosneft has settled all outstanding litigation with former minority shareholders of Yukos whose main assets it took over in 2007 after the oil giant was bankrupted by the Kremlin.

The settlement, which Rosneft said on Wednesday involved no monetary or other payments by Rosneft or its subsidiaries, is the culmination of years of legal disputes over Yukos assets outside of Russia fought in more than six jurisdictions, including the U.S., the Netherlands and Ireland.

Other larger claims against the Russian government, which international courts have ordered to pay billions to former shareholders, are unaffected by the settlement.

Yukos was once Russia's largest oil company before its main shareholder and Chief Executive, Mikhail Khodorkovsky, was arrested and charged with fraud and tax evasion. Mr. Khodorkovsky, released from prison in 2013, said the charges were politically motivated. Yukos was hit with tens of billions of dollars in back-tax claims.

Yukos's main assets were then sold off to Rosneft in state-run bankruptcy auctions which have been challenged in western courts. Mr. Khodorkovsky served more than 10 years in jail before his release. He gave up his stake in Yukos in 2004.

The two Dutch foundations representing former Yukos minority shareholders have agreed with Rosneft to end all legal proceedings against each other in all jurisdictions, Rosneft and a representative of the Yukos shareholders said in separate statements Wednesday.

A representative of the Dutch foundations said the agreement gave them "certainty of ownership of important structures and assets," essentially allowing them to distribute assets, including cash, to former minority shareholders numbering some 55,000.

Litigation by another Russian company is "the only remaining litigation blocking a potential distribution," according to the Yukos shareholders' statement.

Yukos management set up the offshore structures as Russian authorities raised pressure on the company and froze its Russian accounts. The structures now control up to $2 billion in assets, which had been claimed by Rosneft. Yukos had been seeking to collect a further $3 billion in debts it claimed were owned by Rosneft. The Russian state giant had fought all efforts to collect those debts, however, and litigation was expected to continue for years.

The settlement doesn't affect a case brought by the Dutch foundations against the Russian government in the European Court of Human Rights, which awarded EUR1.87 billion ($2.02 billion) in compensation last year.

Another international court, the Permanent Court of Arbitration in The Hague, ruled last year that Russia owes $50 billion to GML Ltd., the Gibraltar-registered vehicle formerly known as Menatep, through which Mr. Khodorkovsky and his colleagues held their controlling stake.

Write to James Marson at [e-mail]

Access Investor Kit for Rosneft

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=RU000A0J2Q06

Access Investor Kit for Dominion Resources, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US25746U1097

Subscribe to WSJ: http://online.wsj.com?mod=djnwires