People walking past the Yukos logo at the entrance to the headquarters building in Moscow, Russia | Yuri Kochetkov/EPA Yukos shareholders declare war on Russia’s assets Properties in France, Belgium, the U.S. and the U.K. will be seized in the $50 billion suit.

Belgian and French authorities have moved to seize Russian assets in connection with a lawsuit brought by the former majority owner of Yukos Oil Company, which won a $50 billion claim against the Russian Federation last year.

The assets are the first to be publicly identified in the suit, which could eventually ensnare properties belonging to Russian state-owned companies like Gazprom, Rosneft, and RT.

The Hague court ruled last July that Russia must pay $50 billion to GML Ltd to compensate for dissolving Yukos. Russia has since petitioned the court to annul that ruling, and missed a January deadline to pay the full sum. The Kremlin said Thursday that it was examining the Belgian claims.

“Russia hasn’t paid us, interestingly, so we are left with the prospect of enforcing it,” said Tim Osborne, executive director of GML.

GML’s shareholders collectively own 70 percent of Yukos, which was forced into bankruptcy in 2006 as a result of the Russian government’s decision to expropriate the company’s assets and sell them to state-owned gas companies Rosneft and Gazprom. Ever since then, Osborne has been working to reclaim those funds from his London office, and recently began the process of petitioning national courts to seize Russian state assets in Europe and America.

The Belgian Court of Arbitration approved a claim on Wednesday from the Yukos Universal Limited, a subsidiary of GML, to the tune of €1.65 billion, according to Russian media reports. "Several dozen" Belgian companies have been notified of the seizure, Reuters reports.

In France, law enforcement officials seized a number of small funds belonging to Russian companies as well as the French subsidiary of Russia's OAO VTB Bank. The companies involved have 15 days to declare the Russian funds and debts they hold.

"They're freezing orders. We're not grabbing anything, we're just not letting them use it anymore," said Osborne. "We started in Belgium yesterday, we started in France about two weeks ago."

But only this week did the Russian press leak the news that papers had been served. Osborne emphasized that the seizures are only "pre-judgment attachments" to make sure Russian assets are not spirited out of the countries where GML has brought claims forward. So far, the list includes the U.S., U.K., France, and Belgium, and will soon include Germany as well.

"It does not come as a surprise," Andrey Belousov, a presidential aide in the Kremlin, told Interfax. "I personally believe that these decisions were much politicized."

Missed deadline

The news comes after the Russian Federation failed to meet a Monday deadline set by the European Court of Human Rights (ECHR), which it was supposed to present with a distribution plan for the €1.9 billion it owes to some 55,000 shareholders of Yukos Oil Company. No such plan was produced.

Russian Justice Minister Alexander Konovalov told Interfax that Russia was unlikely to honor the ruling.

"We have no certainty that Russia will be able to comply with this decision because, in our view, it runs counter to the case-law practice of the court itself and is not based on real, factological circumstances," he said. "We will write to them that we have not drawn up the plan."

GML would also receive 70 percent of the €1.866 billion from the separate European Court decision, which Russia unsuccessfully appealed in 2014, and which GML regards as a telling sign about whether Russia intends to honor the Hague decision.

“If it’s not paid, then it will be a very clear indication to the national courts that we’re talking to that Russia isn’t going to pay international awards,” Osborne said.

“The Russian authorities have claimed that the decision was made in the interest of several tens of thousands of people who do not need the money, it’s possible that they do not even want to reclaim the money,” Dmitry Gololobov, deputy general counsel for Yukos from 1995 to 2003, told Radio Svoboda in an interview on Monday. “Russia has called the ECHR decision irrational, and said that it can not and will not execute it.”

GML plans to reclaim its assets by other means — by seizing Russian state assets, mainly bank accounts and real estate, held outside the country. It will petition the Berlin regional court to begin recognition and enforcement procedures this summer. GML has crossed off several countries from the list of where it will introduce claims, including China, Switzerland, Luxembourg, and Canada.

“We will shortly have cases going in most of the western European countries, and then we will look farther afield,” Osborne said. The company is represented by Shearman & Sterling in Paris, as well as by teams of lawyers in each jurisdiction where it is seeking enforcement, including Berlin, Brussels, and New York.

GML expected to present this week’s missed ECHR deadline as evidence to the national courts that it should be able to get on with seizing the Russian Federation’s accounts and properties.

Not many people have been successful in wresting funds from the Russian government. One notable precedent is the case of Franz Sedelmayer, a former personal friend of Russian President Vladimir Putin, who spent 20 years battling 140 court cases against the Russian Federation to reclaim the assets of his seized company. In the end, Sedelmayer won $6.8 million by seizing a total of seven Russian trade mission properties, one in Sweden and six in Germany.

“There’s always an attempt by the debtor to camouflage the purpose of the assets,” Sedelmayer said. “That is one lesson that we learned. The other lesson, which we haven’t finished, is whether or not it’s possible to seize state-owned companies. In GML’s case that would be the only way of recovering that [amount] of money.”

Sedelmayer said he and Osborne talk from time to time. “We send each other little congratulation notes.”

The long game

Emmanuel Gaillard, the Shearman & Sterling partner representing Yukos shareholders, emphasized that now that the papers have been served to the Russian Federation, the Russians may argue that the assets identified are covered by sovereign immunity. Only properties used for commercial purposes, not diplomatic ones, can be seized.

“Typically, it takes years,” said Gaillard.

To collect the full $50 billion, GML will indeed have to look into seizing the assets of Russia’s state-controlled companies such as Gazprom, Rosneft, and Aeroflot.

“We’ve looked at the assets, we know where they are, we know what they’re doing, and we’re watching, but it’s premature because we can’t really have those arguments until we’ve completed the recognition and enforcement procedures,” Osborne said.

He has written to the Kremlin multiple times to open a dialogue about a possible settlement, and has tried using former Canadian Prime Minister Jean Chrétien as an intermediary, thus far to no avail.

“We get no joy. We don’t get a response, let alone any joy, they just ignore us,” he said.

Osborne has already spent more than 10 years working on the GML case, which is testing Russia’s willingness to abide by international financial agreements. One promising development is a recent $4 billion settlement between Yukos shareholders and Rosneft, announced in April.

“That’s the first indication there’s been that there’s any commerciality on that side of the fence, the first time they’ve demonstrated any willingness to look at it purely from the point of view of ‘is this a sensible thing to do,’” Osborne said. “Ours is a simple legal question, and we’ve had our arbitration, and we’ve won that. We’ll go through the set aside application and we will win that. And we’ll go for recognition and enforcement in all the countries we have to go to until we get our $50 billion.”

If GML succeeds, it will provide a lasting model for other parties seeking compensation from the Russian Federation.

“If it took 10 years it wouldn't surprise me, but we are ready for that,” said Gaillard. “We’ll get there, over time.”