Fighting for the rule of law in Putin’s Russia

This is a factual political and legal thriller in which lawyers are some of the main heroes – and villains too. It is a story of Russia in its immediate post-Soviet wild west days, of Vladimir Putin’s quest to seize control of assets, and of resistance by some oligarchs but also by ordinary professionals committed to the rule of law and supporting a modern business economy.

At the end of Martin Sixsmith’s readable book is a helpful timeline, a list of characters and extensive notes (many of them referring to original Russian sources, as well as numerous personal interviews with primary characters), plus an index. I found these necessary, as the twists and turns (who dies in prison or is jailed on trumped-up charges) are pretty confusing. Sixsmith is open about the fact that he is friends with Mikhail Khodorkovsky (pictured), the oligarch founder of Yukos oil company who was jailed for 10 years and is a leading pro-democracy critic of Putin. 

The oligarchs backed Boris Yeltsin and his successor Putin, believing that they could control him. Roman Abramovich features in several places as someone who tries not to cross Putin but appears to keep a sense of humanity and exercise better judgement than those running the Russian state. 

When Russian directors are targeted, Yukos appoints British lawyers to act as directors. British tax lawyer Stephen Curtis died in a suspicious helicopter crash, and Tim Osborne, Nick Keeling and Kevin Bromley take up positions. Osborne leads the fight for compensation for the next 20 years. Emmanuel Gaillard and Yas Banifatemi are the French arbitration lawyers who pursue the ultimately successful strategy of claiming breach of the Energy Charter Treaty. 

The American, British and European law firms acting for the Kremlin (until the full-scale invasion of Ukraine in 2022) do not come out of this well. Most scorn is reserved for accountancy firm PwC, which allegedly under pressure from the Kremlin disavows years’ worth of its accounts for the oil company and does not give evidence in arbitration proceedings. The Kremlin then alleged fraud and proceeded to persecute Yukos employees. Osborne ‘insisted that PwC had always had a complete, first-hand knowledge of everything that was going on at Yukos’. In 2007, PwC claimed it was misled about related parties, payment structures and payments to related companies. In 2009, PwC’s director of European public affairs Michael Davies told Sixsmith: ‘The withdrawal of our audits was not done lightly. We were confident of the new information we received.’

The book will not tell practitioners anything about the law that they do not know. For a non-practitioner unfamiliar with arbitration, the introductory explanation of international commercial arbitration proceedings is clear and helpful, including excerpts from Schultz and Grant, Arbitration: A Very Short Introduction. 

To this reader, apart from the vengeful campaign of victimisation by Putin’s henchmen, the most shocking disclosure is how slow arbitration and compensation proceedings are. Every step seems to take six months or a year, leading to proceedings lasting 10 years – and another 10. 

The flaws in the book are political. While it is made clear that the oligarchs obtained their money mostly by dubious means, and kept the money tied up in tax-minimising structures in Russia and offshore that complied with the letter of the law if not its spirit, the clash with the Kremlin is presented as being between free market economy-supporting democrats and ex-KGB apparatchiks. The latter point is fair, but suggesting that the oligarchs – even once legitimised – supported free markets seems rather a leap. Sixsmith does convince me though that Yukos’ directors supported the rule of law. The warning for lawyers is that this does not really exist in the Russian Federation. 

Kiron Reid is a former law lecturer at the University of Liverpool, former diplomat and a volunteer professor at Zaporizhzhia National University in south-east Ukraine