Judge in Yukos's countersuit asks to be removed

The cases will be handed over to a new judge. Is Yukos buying a judge?

Judge Olga Mikhailova, who presided over the case concerning the suit from the oil company Yukos against the Russian Tax Ministry asked to be removed from the hearings. The judge explained her decision with recent publications in press, which she considered as psychological pressure.

Mikhailova said, press publications connected with the process “exert very strong psychological pressure.” A spokesman for the Tax Ministry claimed they had a similar petition, in which the ministry wants the judge to step down from the process, RBC reported.

According to the Tax Ministry, Olga Mikhailova published four articles of her own in 2001-2002. The articles about tax laws were published in Your Tax Attorney magazine. Sergey Pepeliaev was the magazine's editor-in-chief. He represented Yukos's interests at court at that time. In addition, the judge published a book on the same subject, also edited by Pepeliaev. The ministry believes all these facts testify to Olga Mikhailova's interest in the outcome of the case.

Deputy chairwoman of the Moscow Arbitration Court approved Olga Mikhailova's withdrawal. The case will be handed over to a new judge. The hearings will resume during this month.

Meanwhile, Yukos's lawyer Sergey Pepeliaev said the Russian Tax Ministry was showing pressure on lawyers representing Yukos's interests in the Arbitration Court. Pepeliaev stated there were several facts to prove the pressure on the part of the Tax Ministry shown on the law firm Pepeliaev, Goltsblat and Partners. The firm represents Yukos at court on the suits connected with 99.3 billion rubles of back taxes. Particularly, a prescheduled tax inspection has been recently conducted in the law firm, although no violations were found in the beginning of the year as a result of the scheduled inspection. Pepeliaev also stated he had “never come across such unethical methods in arbitration disputes as the Tax Ministry shows with Yukos suits.”

As it was previously reported, Yukos sent a lawsuit to the Moscow Arbitration Court to cancel the decision of the Russian Tax Ministry dated April 14th to collect the 99.4 billion ruble tax debt. The court started pending the case. Two judges have been removed since then.

On June 28th the Court of Appeal of the Moscow Arbitration Court rejected appeals from Yukos and Yukos-Moscow filed against the resolution of the first instance court dated May 26th. The first instance court ruled to collect 99.4 billion rubles from Yukos. Furthermore, the court rejected the Tax Ministry's appeal to collect additional 400,000 thousand rubles from the company. To crown it all, the court reduced the amount of taxes collected from Yukos down to 32 million rubles.

Thus, the judgment to collect over 99 billion rubles from Yukos came into effect, and Yukos filed an appeal against that decision.

Yukos has already started paying tax debts for 2000, a spokesman for the company told the Oil Information Agency on July 15th.

Yukos's assets and accounts have been arrested. The free funds on the company's accounts will be enough to pay only one-third of tax arrears for 2000.

A spokesperson for the company said July 14th, the company was ready to pay 1.25-1.3 billion dollars to clear tax debts for 2000. The payment includes 550-600 million dollars in VAT refunds from the state budget. Yukos intends to pay the rest with the help of credits and assets sales, although assets will have to be unfrozen for it.

The Russian Tax Ministry accuses Yukos of tax deviation with the use of internal offshore zones. On April 14th the ministry finished the tax inspection of Yukos's tax payments in 2000. According to the results of the inspection, the ministry ordered the oil giant to pay 99 billion 375 million 538 thousand and 234 rubles in taxes, penalties and fines.