Russian-owned land in London seized as part of Yukos battle

A PRIME plot of London real estate belonging to the Kremlin has been seized by former shareholders of defunct oil giant Yukos amid a $60bn (£47bn) legal battle.

In what is the first successful charge over a Russian-owned property in England, the Kremlin has been punished after failing to pay legal costs to a group of former Yukos backers. The plot of land is located at 245 Warwick Road in Kensington, which the Russian Federation bought in 2006 for £8m.

This is the latest twist in the battle over Yukos, which was seized by the Kremlin in 2003. Before that, it produced more than a fifth of Russia’s oil.

The seizure was made after Mikhail Khodorkovsky, the company’s former boss, fell out with Vladimir Putin. He was later jailed for alleged tax evasion and fraud. His downfall was seen as key in cementing the president’s power.

Three Yukos shareholders, Hulley Enterprises, Yukos Universal and Veteran Petroleum, succeeded in securing a landmark arbitration award in 2014, which ordered Russia to pay them $50bn in compensation.

However, since the Dutch ruling nine years ago, a string of legal battles have ensued with the shareholders trying to enforce the arbitration ruling in Britain, the US and the Netherlands. It means the amount owed to shareholders rose to almost $60bn as interest piled up.

Hulley and Yukos Universal are subsidiaries of GML, whose chief executive Tim Osborne said: “This historic first charge over Russian property in England is a testament to our commitment to hold Russia accountable for its actions.” Russia can appeal against the order at a hearing on April 12.