Interview with Dmitry Gololobov

The former head of the legal department of YUKOS and one of its most powerful managers, Dmitry Gololobov was in charge of the legal support of the company. In 2004, the Russia’s General Prosecutor’s Office brought charges against him and added to the federal and international wanted lists. Gololobov left Russia in autumn 2004. He now lives in the UK.

Dmitry Gololobov
Former head of YUKOS's legal department

Do you think that the concept of abuse of rights can be applied to the matter of the validity of an arbitration clause?

I've always been cautious about agreements made between companies within one group. The notion that directors must reasonably and prudently act in the interest of the company is present in Russian law in no less degree than in the western legal systems. Russian corporate law is borrowed from the West. Therefore, in all the most important matters the position of Russian law is the same as in most Western legal systems.

Many holding structures, not only Yukos, have misused such arrangements.

I can imagine that when signing these agreements which changed the seat and law of arbitration the directors of SamaraNefteGaz did not act in the interests of the company. It is indeed important in whose interests the management acts. These directors had the power of attorney but they did not act in the interests of the company. Their interest was clear.

Money in dispute belongs to Yukos’s shareholders. However, where they go is not so clear. The position of these people who are fighting for what is left from Yukos is that one day they will settle with shareholders. But there are various legal wrangles to go on for at least 10-15 years. In fact, they will spend the money on themselves and lawyers. In my view this is unfair.

I would have never recommended signing such agreements particularly in those circumstances. The clause was just as shaky then as it is today. I would have said: ‘You guys need to realise that this is clearly not in the interests of the company.’

The Supreme Court of the Netherlands enforced the arbitration award which had been set aside by a state court in Russia, which is in accordance with Russian law and the New York Convention. The Court, as I understand it, said, ‘we will enforce this award - and that is quite unusual - because in Russia Yukos was denied a fair trial’.

This would seem that the decision, on such a high level, is based on the assumption that there is no fair trial in Russia, at least in this particular case. What is your view on this?

I have recently seen several cases like that in England. English courts hold that politics do not affect legal relationships.

Of course there is the famous case Chorny v Deripaska, in which the court essentially said that a fair trial will be in England. There is, of course, a global trend toward expansion of own jurisdiction. From this standpoint the position of the Dutch court does not surprise me.

On the other hand, there are decisions which state that various reservations about a fair trial and so on should be used with extreme caution. I think that we should be very careful indeed here. It would have been better to wait for the ECHR's decision of the Yukos case.

There is a view, which is reflected in several studies, that some Western companies working in Russia rely more on public opinion than on formal legal procedures. Do you see the point here?

I have seen many cases in which public opinion was not taken into account. There those who like to talk about the bloody regime and absence of a fair trial. Yet courts in England usually say that commercial obligations must be respected.

It’s one thing if they tortured you, twisted your arms and forced you to sign documents that you did not want to sign. But when you do not dispute that you signed the documents of your own free will, do not contest the very essence of the obligation then what's the problem?

There are other precedents, of course. It seems to me that Russia and a number of CIS countries have a bad reputation. And this sometimes manifests itself in the courts. Judges are human beings too.

Where the trend is directed to?

I agree in principle with Anton Ivanov, the Chairman of the Supreme Commercial Court, who likes to say that fair trial in Russia does exist, at least in the majority of cases.

It’s a different story in criminal courts; there are a lot of problems here. In addition, there are, of course, issues with staff: incompetent judges, unprofessional clerks, etc.

To what extent are courts in Russia corrupt? I would say that corruption in Russian courts is greatly exaggerated.

I think too much weight is given to politically significant cases.

Another problem is that people are ignorant. Many people do not hire lawyers, do the legal work themselves and do it badly. This is in fact just a problem of Russian carelessness and not law. If we discount these cases, the situation is not so bad.

This is the objective side of justice. But there is another component: how public opinion sees the situation with the justice system from the outside.

The West is tied to the system of stereotypes. One of my American friends once told me that in America public opinion is formed by some 5% of the population or even less. This group can understand, analyze and make theirown conclusions. Others follow the stereotypes identified in the press. I agree with this view.My feeling is that this is what it is.

I have met Englishmen who believe that Russia is still ruled by a king whose name is Vladimir Putin.

Nevertheless, there is a famous resolution of the European Parliament, the decision of the Supreme Court of the Netherlands – in other words not simply popular opinion. Decisions, including those of the courts, are based on the assumption that there is no law and fair trial in Russia. Are you worried?

This resolution of the European Parliament contains several statements, including those with which you cannot argue - the killer of a journalist has not been found. I completely agree here.

Khodorkovsky's case - I would have waited for the ECHR decision.

The resolution also mentioned Izmestiev (former senator and businessman Izmestiev was sentenced to life imprisonment for organizing a gang that killed dozens of people – editor’s note). Here is the big question. Would Khodorkovsky want to be in the same company as Izmestiev?

It is clear to me that there are people who genuinely support Khodorkovsky, but there are also those who get paid for this support. There are those who protest against the regime, including those who would protest against any government. If you filter out these people virtually no one is left who is any knowledge of the matter.

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