Russia must pay $50 billion to Yukos investors

An international arbitration court in the Hague has ruled that Russia must pay $50 billion to investors for the seizure of the Yukos oil company.

Reuters reports the $50 billion dollar sum is roughly half of what the investors originally sought, $114 billion.

Forbes says it is the single largest international arbitration decision in history.

The events that led to this decision began in 2003. At that time, Mikhail Khodorkovsky was Russia's richest man. Statements he made at the time, and his vast wealth made him a threat to Russian President Vladimir Putin.

As such, Putin deployed the resources of the state to bankrupt Yukos through numerous accusations of tax evasion and other wrongdoing. Khodorkovsky was himself convicted of tax evasion and other crimes. He spent ten years in jail before receiving a pardon from Putin before the Sochi Winter Olympics.

After the bankruptcy and arrest of Khodorkovsky, the Russian state appropriated what was left of Yukos and its assets without reimbursing Yukos' investors.

The decision is another economic strain for Russia, which argued that valuing a company so long after its dissolution was speculative and useless.

Russia is currently dealing with the economic costs of supporting the Crimean peninsula and its population after Russia annexed it from Ukraine in early 2014. This expensive decision has been compounded by the imposition of economic sanctions on some Russian firms by the United States and European Union.

The shooting down of commercial airline Malaysia Airlines MH17 by what seems to be rebels receiving support from Russia has increased political pressure for even more sanctions.

Reuters notes that $50 billion is equivalent to around 2.5 percent of Russia's gross domestic product at a time of anemic economic growth. That figure of $50 billion also represents 57 percent of Russia's Reserve Fund, which is designed to cover unexpected costs incurred by the state.