In July 2014 the Permanent Court of Arbitration of the Hague ordered Russia to pay more than $50 billion in damages to former Yukos shareholders. On January 28, 2015 Russia appealed to the District Court of The Hague, claiming that the arbitrators did not have the authority to rule in the dispute, that procedural errors were made and that damages were miscalculated.
This action comes as the Russian economy is in trouble, with the decline in the price of oil, inflation reaching double digits, prices rising, imports decreasing and the ruble declining in value dramatically.
Financial consequences for the Russians can be severe, and Russian international actions in the political arena do not garner support in the court of public opinion. The most immediate consequence of the failure to comply with the Court of Arbitration decision is the imposition of penalties, to the tune of $1.7 billion annually. Another possibility is the freezing of Rosneft assets to assure payment.
Be on the lookout for my article with Sheila A.S., discussing the arbitration award, scheduled for publication.