Vladimir Putin
Russia's President Vladimir Putin Reuters/RIA Novosti

The arbitration court in the Hague has awarded several billions of dollars in compensation to a group of shareholders in defunct oil giant Yukos in its lawsuit against Russia.

The Permanent Court of Arbitration ordered Russia to give $50bn (£29.45bn, €37.23bn) to former shareholders in Yukos, which was the largest oil producer in Russia, according to media reports.

The compensation awarded is half of the original $103bn claim by subsidiaries of Gibraltar-based Group Menatep, which had controlled Yukos. Group Menatep now exists as holding company GML.

"We couldn't be happier with this result," said GML director Tim Osborne.

Russia is looking to appeal the decision, according to Foreign Minister Sergei Lavrov.

"Those representing Russia will use all legal means to defend our rights," he said.

The compensation amount is the largest international arbitration award to date, eclipsing the $2.473bn won by Dow Chemical Co in 2012 from the International Chamber of Commerce in a case against Kuwait's Petrochemical Industries.

The gigantic payout comes as Russia faces further US and European sanctions for its alleged involvement in the downing of a Malaysian passenger jet in eastern Ukraine that killed 298 people.

The Russian government under President Vladimir Putin had dismantled Yukos after imposing $27bn in tax charges. Most of its assets are now owned by Russian state-controlled Rosneft, which is the world's largest publicly traded oil company by output.

Moscow-based Rosneft has been sanctioned by the US over its alleged connection to the Ukraine conflict.

In 2005, Mikhail Khodorkovsky, who was the largest shareholder in Group Menatep, was convicted of tax fraud and sentenced to prison. Former Yukos shareholders alleged the company's state-enforced bankruptcy and Khodorkovsky's prosecution were politically motivated.

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Khodorkovsky, who was once Russia's richest man with a fortune of $15bn, was released from prison in 2013, and he is currently living in Switzerland.

He transferred his Yukos stake to fellow shareholder Leonid Nevzlin to protect the company. Nevzlin is entitled to receive more than 60% of the compensation.

GML commenced the arbitration against Russia in 2005, making use of a provision in the Energy Charter Treaty that allows investors to arbitrate expropriation claims against signatory governments.