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Russian Court Rejects Ruling On Western Banks' Claim On Yukos

The court rejected a ruling ordering Yukos to repay a $475 million loan to Western creditors (AFP) 30 November 2005 -- Russia's Federal Arbitration Court today rejected a lower court ruling ordering the Yukos oil company to repay an oustanding loan of $475 million to foreign creditors.

In 2003, Yukos borrowed $1 billion from Western banks. When the company failed to meet loan payments, 14 creditor banks took their case to London's High Court, which backed their claims.

The case then went to the Moscow Arbitration Court, which earlier this year ordered Yukos to pay the banks $475 million.

Following an appeal by Yukos, the Federal Arbitration Court today rejected that ruling and sent the case back to the lower court.

Yukos, once Russia's largest oil producer, is also facing claims by Russian tax authorities of billions of dollars in back taxes.