The English High Court today ruled, in preliminary proceedings, that Rosneft is liable to pay Yukos Capital S.a.r.L. US$160 million, the interest owed on a previous arbitral award of US$425 million.

The previous arbitral award, issued by a tribunal acting under the rules of the International Commercial Arbitration Court, was set aside by the Russian Arbitrazh courts. However, the Amsterdam Court of Appeal subsequently held that the Arbitrazh ruling was neither judicially impartial nor independent, and so would not be recognized in the Netherlands.

Rosneft accordingly paid the arbitral award of US$425 million to Yukos Capital in August 2010.

The English High Court proceedings regarded recovering the interest on this award, amounting to US$160 million, which had accrued during the period in which Rosneft had refused to pay.

The proceedings dealt with two significant preliminary issues, both of which in essence dealt with the lack of impartiality and independence in the Russian courts. In a comprehensive decision, Mr Justice Hamblen ruled in favour of Yukos Capital.

The main proceedings are scheduled to commence in early 2012.