CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 14 janvier 2020

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RUSSIA (No. 2)   (Applications nos. 51111/07 and 42757/07)   JUDGMENT   Art 6 § 1 (criminal) and Art 6 § 3 (c) and (d) • Fair hearing • Defence through legal assistance • Confinement in glass cabin negatively impacting the exercise of an accused’s right to participate effectively in proceedings • Systematic perusal by trial judge of written communications between the accused and their lawyers • Adversarial trial • Equality of arms • Omission to hear in person expert witnesses whose reports were used against the accused • Imbalance between the defence and the prosecution in collecting and adducing “expert evidence” • Court’s unreasoned refusal to examine the defence witnesses, to adduce exculpatory evidence or to obtain disclosure of evidence in the possession of third parties • Unfair reliance of the trial court on judgments in related proceedings to which the applicants were not parties Art 6 § 2 • Presumption of innocence • Prime Minister’s confusing statements on the applicants’ conviction in an earlier trial • Confusion rapidly dispelled Art 7 • Criminal offence • Extensive and unforeseeable interpretation inconsistent with essence of the offence Art 8 • Respect for family life • Unavailability of long-stay family visits in remand prisons Art 18 and Art 8 • Restrictions for unauthorised purposes • Absence of ulterior motives in view of indiscriminate application of impugned legislation to all detainees of remand prisons   STRASBOURG   14 January 2020   FINAL   14/05/2020 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Khodorkovskiy and Lebedev v. Russia (No. 2), The European Court of Human Rights (Third Section), sitting as a Chamber composed of:   Paul Lemmens, President,   Georgios A. Serghides,   Helen Keller,   Dmitry Dedov,   María Elósegui,   Gilberto Felici,   Erik Wennerström, judges, and Stephen Phillips, Section Registrar, Having deliberated in private on 3 December 2019, Delivers the following judgment, which was adopted on that date: PROCEDURE 1.     The case originated in two applications (nos.   51111/07 and 42757/07) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Russian nationals, Mr Mikhail Borisovich Khodorkovskiy and Mr Platon Leonidovich Lebedev (“the applicants”), on 16   March 2007 and 27 September 2007 respectively. 2.     The applicants were represented by Mr A. Drel, Mr J. Glasson QC and Lord D. Pannick QC, lawyers practising in London. The Russian Government (“the Government”) were represented initially by Mr   G.   Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr   Galperin. 3.     The applicants complained, in particular, about their conviction for misappropriation and money laundering, and about other events related to the criminal proceedings against them. They alleged, in addition, that their prosecution had been motivated by political reasons, in breach of Article 18 of the Convention. 4.     On 24 March 2014 the applications were communicated to the Government. THE FACTS I.     THE CIRCUMSTANCES OF THE CASE 5.     The first applicant was born in 1963 and the second applicant was born in 1956. A.     Background 1.     The applicants’ activities prior to their imprisonment 6.     Before the applicants’ first arrest in 2003, the first applicant was the Chief Executive Officer (“CEO”) of and a major shareholder in OAO Neftyanaya Kompaniya Yukos (Yukos plc), the head company of the Yukos group of companies (further referred to as “Yukos”), which at the relevant time was one of the largest oil companies in Russia. The second applicant was the first applicant’s business partner and a close friend. From 1998 the second applicant was a director at Yukos-Moskva Ltd. He was also a major shareholder in Yukos plc. Furthermore, the applicants controlled a large number of other mining enterprises, refineries, banks and financial companies. In 2002-2003 Yukos began to pursue a number of ambitious business projects which would have made it one of the strongest non-State players on the market. In particular, Yukos was engaged in merger talks with the US-based Exxon Mobil and Chevron Texaco companies. 7.     The applicants were also active as political lobbyists. From at least 2002 the first applicant openly funded opposition political parties, and a number of his close friends and business partners became politicians. 8.     The first applicant asserted that his political and business activities had been perceived by the leadership of the country as a breach of loyalty and a threat to national economic security. He alleged that as a counter-measure the authorities had launched a massive attack on him personally, his company, colleagues and friends. A more detailed description of the applicants’ political and business activities prior to their arrest can be found in Khodorkovskiy and Lebedev v. Russia, nos. 11082/06 and 13772/05, §§   8-41, 25 July 2013. 2.     The applicants’ first trial 9.     On 20 June 2003 the General Prosecutor’s Office (the GPO) initiated a criminal investigation into the privatisation of a large mining company, Apatit plc (criminal case no. 18/41-03). In 1994 20% of Apatit plc’s shares were acquired by a company allegedly controlled by the applicants. The case was opened under Article 165 of the Criminal Code (“misappropriation of assets” falling short of embezzlement), Article 285 (“abuse of official powers”) and Article 315 (“deliberate non-compliance with a court order”) of the Criminal Code. 10.     In the following years the charges against the applicants within case no.   18/41-03 (hereinafter – the “main case”) were repeatedly supplemented and amended. Thus, within that case the applicants were also charged with corporate tax evasion (Article 199 of the Criminal Code). The applicants were suspected of selling Yukos oil through a network of trading companies registered in low-tax zones, in particular in the town of Lesnoy, Sverdlovsk region. According to the GPO, tax cuts were obtained by those companies by deceit, since the companies existed only on paper and never conducted any real business in the low-tax zones which would have granted eligibility for a preferential tax regime. The GPO suspected that the applicants registered and controlled those companies through their friends and partners, in particular Mr Moiseyev, senior manager and shareholder of Group Menatep Limited, Mr Pereverzin, director of two Yukos companies registered in Cyprus (see paragraph 116 below), and Mr Malakhovskiy, director of Ratibor (see paragraph 108 below). 11.     Case no. 18/41-03 led to the applicants’ conviction at their first trial in 2005.   The facts related to that trial (the “first trial”) were at the heart of several applications lodged with the Court in 2003-2006 (see Summary of the Court’s main findings in the applicants’ previous cases at paragraph 34 et seq. below). 12 .     In October 2005, on completion of the first trial, both applicants were transferred from Moscow to two remote Russian penal colonies to serve their sentences. The first applicant was sent to penal colony FGU IK-10, located in the town of Krasnokamensk, Chita Region. The second applicant was sent to correctional colony FGU IK-3 in the Kharp township, located on the Yamal peninsula (Yamalo-Nenetskiy region, Northern Urals, north of the Arctic Circle). 13.     The applicants’ prison terms as imposed in the 2005 judgment subsequently expired; however, they both remained in prison on account of new accusations brought against them within the related but separate court proceedings which are at the heart of the present case (the “second trial”). 3.     Trials of the applicants’ former colleagues and partners (a) Trial of Mr Pereverzin, Mr Malakhovskiy and Mr Valdez-Garcia 14 .     On an unspecified date the GPO severed from the applicants’ case a new case concerning Mr Pereverzin, Mr Malakhovskiy and Mr Valdez-Garcia, directors of Yukos trading companies. The charges against Mr   Pereverzin included, in particular, embezzlement and money laundering (“ legalizatsiya ”) committed in a group which also included the applicants. 15.     In June 2006 the trial of Mr Pereverzin, Mr Malakhovskiy and Mr   Valdez-Garcia started at the Basmanniy District Court of Moscow. That trial was held in camera and was presided over by Judge Yarlykova. 16.     On 1 March 2007 Mr Pereverzin and Mr Malakhovskiy were found guilty; Mr Valdez-Garcia fled from Russia and escaped conviction. He alleged that in 2005 he had been ill-treated while in custody. In particular, Mr Valdez-Garcia claimed that he had been beaten by investigator Mr Kz. and received multiple injuries. However, the Russian authorities refused to institute a criminal investigation into those allegations. 17 .     On 21 June 2007 the Moscow City Court upheld the conviction on appeal. (b) Trial of Mr Aleksanyan 18.     Mr Aleksanyan was one of the lawyers acting for the first and second applicants. In 2006 he was arrested and prosecuted in a related but separate case (see Aleksanyan v. Russia , no.   46468/06, 22 December 2008). The accusations against Mr Aleksanyan were brought to trial, but in 2010 they were dropped due to the expiry of the statute of limitations. 4.     Other criminal cases against the applicants 19.     In 2004, while the applicants’ first trial was underway, the GPO decided that certain episodes related to the applicants’ business operations were to be severed from the main criminal case (no.   18/41-03) against the applicants. 20.     On 2   December 2004 the GPO opened criminal case no.   18/325556-04, which concerned “money laundering” by Mr Moiseyev and other “unidentified persons”. 21.     On 27 December 2004 the GPO informed the applicants of that decision. However, the applicants were not questioned in relation to those new charges and were not given any details or informed about the nature of the investigation. 22.     On 14 January 2005 the first applicant’s defence complained before the Meshchanskiy District Court (which conducted the first trial) that the GPO was conducting a parallel investigation but refusing to give the defence any information about its goals or about any charges which might result from it. 23.     According to the Government, criminal case no.   18/325556-04 was eventually joined with criminal case no.   18/41-03. The outcome of this particular criminal investigation is unclear. 5.     Yukos bankruptcy 24.     In late 2002 Yukos plc was subjected to a series of tax audits and ensuing tax proceedings, as a result of which it was found guilty of repeated tax fraud, in particular for using an illegal tax-evasion scheme involving the creation of sham companies in 2000-2003. 25.     On 15 April 2004 proceedings were started against Yukos plc in respect of the 2000 tax year and it was prevented from disposing of certain assets pending the outcome of the case. 26.     On 26 May 2004 Moscow City Commercial Court ordered it to pay a total of 99,375,110,548 roubles (RUB) (approximately 2,847,497,802 Euros (EUR)) in taxes, interest and penalties. 27.     Yukos plc appealed and the appeal proceedings began on 18   June   2004. On 29 June 2004 the appeal court dismissed the company’s complaints, including those alleging irregularities in the procedure and a lack of time to prepare its defence. 28.     On 7 July 2004 Yukos plc filed an unsuccessful cassation appeal against the 26 May and 29 June 2004 judgments and simultaneously challenged those judgments by way of supervisory review before the Russian Supreme Commercial Court. Yukos plc claimed, among other things, that the case against it was time-barred; under Article 113 of the Russian Tax Code, a taxpayer was liable to pay penalties for a tax offence only for a three-year period, which ran from the day after the end of the relevant tax term. 29.     The Presidium of the Supreme Commercial Court sought an opinion from the Constitutional Court, which confirmed on 14 July 2005 that the three-year time limit under Article 113 should apply. However, where a taxpayer had impeded tax supervision and inspections, the running of the time-limit stopped once the tax audit report had been produced. On the basis of that ruling, on 4 October 2005 the Presidium dismissed Yukos plc’s appeal, finding that the case was not time-barred, because Yukos plc had actively impeded the relevant tax inspections and the Tax Ministry’s tax audit report for 2000 had been served on Yukos plc on 29 December 2003, that was, within three years. 30.     In April 2004 the Russian authorities also brought enforcement proceedings, as a result of which Yukos plc’s assets located in Russia were attached; its domestic bank accounts partly frozen and the shares of its Russian subsidiaries seized. On 2 September 2004 the Tax Ministry found Yukos plc had used essentially the same tax arrangement in 2001 as in 2000. Given that the company had recently been found guilty of a similar offence, the penalty imposed was doubled. 31.     Overall: for the tax year 2001, Yukos plc was ordered to pay RUB   132,539,253,849.78 (approximately EUR 3,710,836,129); for 2002, RUB 192,537,006,448.58 (around EUR 4,344,549,434); and, for 2003, RUB 155,140,099,967.37 (around EUR 4,318,143,482). Yukos plc was also required to pay bailiffs an enforcement fee, calculated as 7% of the total debt, the payment of which could not be suspended or rescheduled. It was required to pay all those amounts within very short deadlines and it made numerous unsuccessful requests to extend the time available to pay. 32.     On 20 July 2004 the Ministry of Justice announced the forthcoming sale of Yuganskneftegaz plc, Yukos plc’s main production entity. On 19   December 2004 76.79% of the shares in Yuganskneftegaz plc were auctioned to cover Yukos plc’s tax liability. Two days earlier, bailiffs had calculated Yukos plc’s consolidated debt at RUB 344,222,156,424.22 (EUR   9,210,844,560.93). 33.     Yukos plc was declared insolvent on 4 August 2006 and liquidated on 12 November 2007. B.     Summary of the Court’s main findings in the applicants’ previous cases 1.     Lebedev v. Russia, no. 4493/04, 25 October 2007 34 .     The above case concerned the second applicant’s arrest and detention pending the first trial. The Court found several breaches of Article   5 of the Convention on account of the second applicant’s pre-trial detention. It also found that there was no failure on the part of the State to fulfil its obligation under Article 34 with regard to the second applicant’s temporary inability to meet one of his lawyers. 2.     Khodorkovskiy v. Russia, no. 5829/04, 31 May 2011 35.     The above case concerned the first applicant’s arrest and detention pending the first trial. The Court found no violation of Article 3 of the Convention in respect of the conditions of his pre-trial detention between 25   October 2003 and 8 August 2005. It found a violation of Article 3 in respect of the conditions of pre-trial detention between 8 August and 9   October 2005 and the conditions in the courtroom before and during the trial. The Court further found several breaches of Article 5 in respect of the first applicant’s arrest and pre-trial detention. 36.     The Court found no violation of Article 18 of the Convention in respect of the first applicant’s complaint that the State had used the criminal prosecution for a political end and in order to appropriate the company’s assets. While the Court admitted that the applicant’s case might raise a certain suspicion as to the authorities’ real intent, it reiterated that claims of political motivation for a prosecution required incontestable proof, which had not been presented (see Khodorkovskiy , cited above, §   260). 3.     Khodorkovskiy and Lebedev v. Russia, nos. 11082/06 and 13772/05, 25 July 2013 37.     The above cases concerned certain aspects of the second applicant’s detention pending the first trial that had not been examined in Lebedev (cited above), and the first trial of both applicants. 38.     The Court found a violation of Article 3 in respect of the conditions of the second applicant’s detention in the remand prison and in the courtroom. It also found several breaches of Article 5 of the Convention in respect of the second applicant’s pre-trial detention. 39.     With regard to the first trial, the Court found no violation of Article   6 § 1 of the Convention on account of the alleged partiality of the trial judge. However, it found a violation of Article 6 § 1, taken in conjunction with Article 6 § 3 (c) and (d), on account of breaches of lawyer-client confidentiality and the unfair taking and examination of evidence by the trial court. 40.     The Court further found no violation of Article 7 of the Convention with respect to the allegedly unforeseeable interpretation of the tax law which led to the applicants’ conviction. 41.     It found a violation of Article 8 of the Convention on account of the fact that the applicants had been sent to remote correctional facilities to serve their sentences. 42.     The Court also found a violation of Article 1 of Protocol No. 1 in respect of the first applicant on account of the imposition of civil liability for tax arrears payable by Yukos. 43.     The Court found no violation of Article 18 of the Convention in respect of the applicants, confirming its position as stated in Khodorkovskiy , cited above, §   260, that the standard of proof in cases where applicants allege bad faith of the part of the authorities is high ( Khodorkovskiy and Lebedev , cited above, § 903). It stated, in particular, that whereas it was prepared to admit that some political groups or government officials had had their own reasons to push for the applicants’ prosecution, this did not make the applicants’ prosecution illegitimate, in that the accusations against them had been serious, and even if there had existed a mixed intent behind their prosecution, this did not dispense them from responding to the accusations (ibid. § 908). 44.     Finally, the Court found that the authorities had failed to respect their obligation under Article 34 of the Convention, as a result of harassment of the first applicant’s legal team by enforcement agencies. 4.     OAO Neftyanaya Kompaniya Yukos v. Russia, no. 14902/04, 20   September 2011 45.     The above case concerned complaints by Yukos plc of irregularities in the proceedings concerning its tax liability for the 2000 tax year and about the unlawfulness and lack of proportionality of the 2000-2003 tax assessments and their subsequent enforcement. 46.     The Court found a violation of Article 6 § 1 and 3 (b) of the Convention as regards the 2000 tax assessment proceedings on account of the insufficient time available to Yukos plc to prepare the case at first instance and on appeal. 47.     The Court also found a violation of Article 1 of Protocol No. 1 regarding the imposition and calculation of the penalties concerning the 2000-2001 tax assessments on account of the retroactive change in the rules on the applicable statutory time-limit and the consequent doubling of the penalties due for the 2001 tax year. 48.     It also found that there had been no violation of Article   1 of Protocol No. 1 as regards the remainder of the 2000-2003 tax assessments. Likewise, it held that there had been no violation of Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1. The Court found, in this regard, that Yukos plc had failed to show that other Russian taxpayers had used or were continuing to use the same or similar tax arrangements and that it had been singled out. 49.     The Court further found a violation of Article 1 of Protocol No. 1 in the enforcement proceedings against Yukos plc. Given the pace of the enforcement proceedings, the obligation to pay the full enforcement fee and the authorities’ failure to take proper account of the consequences of their actions, the Russian authorities had failed to strike a fair balance between the legitimate aims sought and the measures employed. 50.     Finally, the Court held that there had been no violation of Article 18, taken in conjunction with Article 1 of Protocol No. 1. It found that Yukos plc’s debt in the enforcement proceedings resulted from legitimate actions by the Russian Government to counter the company’s tax evasion. Noting, among other things, Yukos plc’s allegations that its prosecution was politically motivated, the Court accepted that the case had attracted massive public interest. However, apart from the violations found, there was no indication of any further issues or defects in the proceedings against Yukos plc which would have enabled the Court to conclude that Russia had misused those proceedings to destroy Yukos plc and take control of its assets. C.     The applicants’ second trial 1. Opening of case no. 18/432766-07 (a)     The applicants’ transfer to Chita and their attempts to change the venue of the investigation 51.     At the relevant time the applicants were serving their sentences following their conviction in the first trial. The first applicant was serving his sentence in penal colony FGU IK-10, located in the town of Krasnokamensk, Chita Region (see Khodorkovskiy and Lebedev , cited above, § 322). The second applicant was serving his sentence in correctional colony FGU IK-3 in the Kharp township on the Yamal peninsula (see paragraph 12 above). 52 .     On 14 December 2006 the investigator ordered the transfer of both applicants to a pre-trial detention facility (SIZO-1 or FBU IZ-75/1 of the Zabaykalskiy Region) in the town of Chita. The second applicant was transferred there on 17 December 2006 and the first applicant on 21   December 2006. The applicants remained in the Chita remand prison until their transfer to a remand prison (SIZO-1) in Moscow in February   2009 as the criminal case was referred by the GPO to the Khamovnicheskiy District Court of Moscow for trial (see paragraph 72 below). 53 .     On 3 February 2007 the investigator decided to sever several episodes from criminal case no. 18/41-03 and to open a new case. The new case was assigned case number 18/432766-07. The Deputy General Prosecutor ordered that the investigation in that case was to be conducted in the Chita region. 54.     On 5 February 2007 the applicants were charged with the crimes punishable under two provisions of the Criminal Code: “embezzlement” (Article   160) and “Money laundering” (Article 174 (1)). According to the bill of indictment, those crimes had been committed by the applicants in Moscow in their capacity as former senior managers of Yukos plc and affiliated companies. 55 .     On 7 February 2007 a group of lawyers for the applicants travelled from Moscow to Chita. At Domodedovo airport (Moscow) the applicants’ lawyers were stopped and detained for one hour by police working in the airport security unit. Their papers were verified and their belongings were also checked using special equipment and X-ray apparatus. In the course of the searches confidential papers being carried by the lawyers were examined and video-recorded. 56.     On the same day, in the pre-flight security zone of Chita airport, GPO investigators approached Ms   Moskalenko, one of the lawyers for the first applicant, and ordered her to sign a formal undertaking not to disclose information from the case materials in file no. 18/432766-07. She made a handwritten note on the form, stating that she had been coerced into signing the form and that she had not been given access to the documents in case file no. 18/432766-07. On 8 and 15 February 2007 Ms Moskalenko filed a formal complaint with the GPO, stating that the two episodes in the airports amounted to harassment of the applicants’ lawyers and breach of their professional privilege. 57.     In February 2007 the applicants lodged a complaint under Article   125 of the Code of Criminal Procedure (the “CCrP”) about the decision to investigate the new cases in Chita. They claimed that since the acts imputed to them had been committed in Moscow, they ought to be investigated in Moscow, and that the applicants should be transferred to a remand prison there. 58.     On 6 March 2007 the GPO initiated disbarment proceedings in respect of Ms Moskalenko, referring to her absence from Chita when the first applicant was studying the materials of the case. The first applicant was obliged to issue a statement confirming that he was fully satisfied with Ms   Moskalenko’s work. On 8 June 2007 the Qualifications Commission of the Bar refused to disbar Ms Moskalenko. 59.     On 20 March 2007 the Basmanniy District Court found that the GPO’s decision to conduct the investigation in Chita had been arbitrary and that the investigation should be conducted in Moscow. That ruling was upheld on 16 April 2007 by the Moscow City Court. However, the applicants remained in the Chita remand prison. 60.     In July 2007 the defence filed an application with the Prosecutor General, asking that a criminal case be opened in respect of the GPO officials who had failed to follow the order contained in the Basmanniy District Court’s decision of 20 March 2007 concerning the proper place of the investigation. However, this request was refused. 61.     On 25 December 2007 the Supreme Court of Russia, at the GPO’s request, examined the case by way of supervisory review and ordered the lower court to reconsider whether Moscow was the proper place for the investigation in the applicants’ case. 62.     On 30 January 2008 the Basmanniy District Court held that the GPO’s decision to designate Chita as the place of investigation did not breach the applicants’ constitutional rights and did not hinder their access to justice. Consequently, the court confirmed the validity of that decision. On 7 April 2008 the Moscow City Court upheld the lower court’s ruling. (b)     The applicants’ attempts to have the proceedings discontinued 63.     On 28 March 2007 the first applicant lodged a complaint before a judge under Article   125 of the CCrP. He complained about actions by the GPO investigators, specifically that he had been given no details about the parallel investigations; that conducting the investigation in Chita was unlawful, since all of the operations imputed to the applicants had taken place in Moscow; that the courts which authorised his detention in the Chita remand prison lacked jurisdiction; and that the GPO had harassed his lawyers by subjecting them to unlawful searches, threatening them with criminal prosecution and trying to disbar Ms   Moskalenko, one of his lawyers. The applicant claimed that all of these elements, taken in aggregate, amounted to an abuse of process. He sought a court order directing the GPO to stay the proceedings. The applicant insisted on his personal attendance at the examination of the motion by the court, but the court decided that it was impossible to transport him from Chita to Moscow. 64.     On 27 June 2007 Judge Yarlykova of the Basmanniy District Court of Moscow examined the complaint. The applicant’s lawyer challenged the judge on the ground that she had earlier presided at the trial of Mr   Pereverzin, Mr Malakhovskiy and Mr Valdez-Garcia, and could therefore have preconceived ideas about the first applicant’s guilt. However, Judge Yarlykova refused the recusal application, and dismissed the complaint on the merits. 65.     On 19 September 2007 the Moscow City Court upheld the ruling by Judge Yarlykova. In particular, the Moscow City Court agreed with her that under Russian law a judge was not competent to supervise procedural decisions taken by the prosecution bodies in the performance of their functions, and that the judge’s only role in this respect was to verify that the constitutional rights of the participants in criminal proceedings had been respected. 66.     On 16 April 2008 the first applicant resubmitted his complaint of 28   March 2007 seeking discontinuation of the criminal proceedings against him and Mr Lebedev. He also referred to various breaches of the domestic procedure, to bad faith on the part of the authorities and to infringements of the rights of the defendants and professional privilege of the applicants’ lawyers. The applicant lodged this complaint before the Basmanniy District Court of Moscow, but the judge transmitted the motion to a court in Chita, referring to the fact that the investigation was taking place there. 67.     On 29 September 2008 Judge Ivanoshchuk of the Ingondinskiy District Court of Chita rejected the motion, on the ground that the investigator’s actions were not subject to judicial review. On 26 December 2008 that decision was confirmed by the Chita Regional Court. (c)     The applicants’ preparation for the trial 68.     According to the applicants, the bill of indictment and the appended written materials ran to 188 volumes. 69.     When the materials of the case file were given to the defence for examination, the applicants and their lawyer had access to one copy of the file, which they were only allowed to study in the presence of an investigator. When they wished to discuss materials or legal issues in private, the investigator removed the case file. 70.     According to the applicants,   they were not allowed to keep copies of the case file in their cells. 71.     Having received the bill of indictment together with the case file, the defence asked the prosecution to clarify the charges. In their view, the prosecution had failed to demonstrate which facts it intended to prove through which item(s) of evidence. They also submitted that the amounts of oil allegedly misappropriated by the applicants were defined in a random manner, and that the bill of indictment was badly written. However, their request was rejected and the prosecution decided that the bill of indictment was acceptable as it stood and was ready to be submitted to the court. 2. Second trial (a)     Preliminary hearing 72 .     On 14 February 2009 case no. 18/432766-07 was referred by the GPO to the Khamovnicheskiy District Court of Moscow for trial. In the Khamovnicheskiy District Court the case was assigned no. 1/23-10. The applicants were transferred from the Chita remand prison to a remand prison in Moscow (see paragraph 52 above). 73.     On 3 March 2009 the trial began with a preliminary hearing, held in camera. The case was heard by a single judge, Judge Danilkin. He was assisted by four secretaries. 74.     The prosecution team was composed of five prosecutors.   The defence team was composed of over a dozen lawyers. (i)     Conditions in the courtroom 75 .     From 17 March 2009 the hearings were public. The two applicants were held in a glass dock which, unlike the rest of the room, was not air-conditioned and was poorly ventilated. The applicants were brought to the courtroom each day in handcuffs and were heavily guarded. 76 .     The applicants sought the court’s permission to sit outside the glass dock near their lawyers, but permission was not granted. According to the applicants, while in the glass dock they were unable either to discuss the case with their lawyers confidentially or to review documents. All their conversations during the hearings were within earshot of the guards. Furthermore, the judge reviewed all the documents which the defence lawyers wished to show their clients. (ii)     Motions by the defence at the preliminary hearing 77.     At the preliminary hearing the defence filed several motions, all of which were rejected. Thus, the defence sought the discontinuation of the proceedings for abuse of process. However, Judge Danilkin ruled that it was premature to terminate the case without assessing the entire body of evidence and hearing the parties’ positions. The applicants appealed but to no avail: on 1 June 2009 the Moscow City Court ruled that Judge Danilkin’s ruling was not amenable to appeal by the defence. 78.     The defence further complained that the prosecution had failed to submit to the court a list of the defence witnesses who were to be called to the court by a subpoena. The defence contended that they were thus unable to secure the presence of those witnesses at the trial. The defence referred to Article 220 (4) of the CCrP in this respect. Judge Danilkin replied that the absence of a list of defence witnesses to be summoned did not invalidate the bill of indictment, and that the defence would be free to request that the witnesses be summoned during the trial if need be. 79.     The defence asked the judge to order discovery of evidence and suppress certain items of evidence contained in the prosecution case file, but all motions to that end were refused. 80.     The defence challenged the territorial jurisdiction of the Khamovnicheskiy District Court, but this objection was dismissed by the judge. 81.     The defence repeated their request to have the bill of indictment reformulated in order to connect the evidence and factual assertions on which the prosecution case relied and to clarify the prosecution’s legal arguments. Judge Danilkin refused that motion, stating that the law did not require the prosecution to do a better job and to re-write the bill. (iii)     Detention of the two applicants during the second trial 82.     At the preliminary hearing the prosecution requested an extension of the applicants’ detention on remand and on 17 March 2009 that request was granted. The court did not set a time-limit for the extension in its order. The applicants argued that in the subsequent months detention orders were extended with delays; as a result, some periods were not covered by any valid detention order. In addition, in the applicants’ opinion, the review of the detention order of 17 March 2009 was unnecessarily delayed. 83.     Over the following months the applicants’ detention on remand was repeatedly extended. In the opinion of the defence, those extensions were unlawful. The first applicant went on hunger strike in protest against the extensions. In 2011 the Supreme Court acknowledged that the applicants’ detention had been unlawful and issued a special ruling in this respect, addressed to the Chair of the Moscow City Court. (b)     The case as presented by the prosecution 84.     The Khamovnicheskiy District Court of Moscow concluded the preliminary hearing on 17 March 2009 and proceeded to the prosecution’s presentation of the case. 85.     The prosecution presented their case between 21 April 2009 and 29   March 2010.   According to the prosecution, between 1998 and 2003 the applicants, as owners and/or managers of the companies which had a controlling stake in Yukos plc, misappropriated 350 metric tonnes of crude oil produced by Yukos’s subsidiaries and subsequently laundered the profits by selling the oil through a chain of affiliated trading companies. The sums thus accumulated were transferred to the accounts of hundreds of foreign and Russian companies, controlled by the applicants. The prosecution claimed that those acts amounted to misappropriation or embezzlement (Article 160 of the Criminal Code) and money laundering (Article 174.1 of the Criminal Code). 86.     The facts and the legal arguments relied on in the prosecution case are described in more detail below. The following summary is based on the text of the judgment with which the second trial concluded; it reflects only those elements of the case as presented by the prosecution which were retained by the court as the basis for its conclusions. (i)     Obtaining de facto control over the Yukos group 87.     Yukos was created in the course of the privatisation of the State oil sector in 1995. The first applicant was a majority shareholder of Group Menatep Limited, which acquired a large block of shares in Yukos plc at one of the privatisation auctions. As a result, Group Menatep Limited became the majority shareholder in Yukos. The second applicant also owned an important block of shares in Group Menatep Limited and was its director. Thus, as majority shareholders in Group Menatep Limited, both applicants could play a decisive role in shaping Yukos’s business strategy. In 1997 the first applicant was elected President of the Board of Directors of Yukos. 88.     In addition, in order to secure the loyalty of certain senior executives in Yukos, the applicants created a secret parallel system for distribution of the group’s profits. Thus, in 1996 the applicants concluded an oral agreement with Yukos senior executives, under which Group Menatep Limited undertook to pay 15% of Yukos’s profits Tempo Finance Limited. Those Yukos senior executives were the beneficiaries of Tempo Finance Limited. Such payments were regularly made between 1996 and 2002, when they amounted to several hundred million United States dollars (USD). In 2002 the agreement between Group Menatep Limited and Tempo Finance Limited was reformulated and concluded in writing. As a result, the applicants secured the loyalty of several leading Yukos senior executives and obtained not only strategic but also operative control over the group (pages 569 et seq. of the judgment). The influence of the minority shareholders within Yukos was thus reduced to a minimum. 89.     Through Yukos the applicants gained partial control over Yukos’ main subsidiaries, in which Yukos owned 50% or more of the shares: oil-extracting companies, refineries, crude-oil storage terminals, etc. Yukos’ biggest oil-extracting subsidiaries were Yuganskneftegaz plc, Samaraneftegaz plc and Tomskneft plc (hereinafter “production entities”). Again, the applicants had recourse to various techniques in order to reduce the influence of the minority shareholders in those companies. 90 .     The applicants initially controlled the production entities on the basis of “management agreements”. Thus, on 19 February 1997 such an agreement was imposed on Yukos plc by Rosprom Ltd, another company which belonged to the applicants and in which the second applicant was a deputy president of the executive board ( pravleniye ) in 1997-1998. Under that agreement Yukos plc delegated to Rosprom the power to take decisions which would otherwise be within the competence of the executive bodies of Yukos plc. The management agreement was approved by the general meeting of shareholders of Yukos. On 14 April 1998 Rosprom signed an agreement in similar terms with Tomskneft plc. 91 .     In 1998 the applicants registered new companies which operated under “management agreements” with the production entities belonging to the Yukos group. Thus, Yukos Explorations and Production Ltd was to operate the group’s oil-extracting facilities, whereas Yukos Refining and Marketing Ltd was created to operate the refineries. Both Yukos Explorations and Production Ltd and Yukos Refining and Marketing Ltd were controlled by Yukos Moskva Ltd, in which the first applicant was head of the board of directors (from 3 July 1998 until 31 March 2000). From 2000 Yukos plc was administered by Yukos Moskva Ltd. 92.     Although from 2000 onwards the first applicant was no longer the head of the board of directors of Yukos Moskva Ltd and became merely one of its directors, he continued to define the group’s policy as the major shareholder in Group Menatep Limited and, in this capacity, was able to influence the production entities’ operative decisions. The second applicant was the deputy head of the board of directors of Yukos Refining and Marketing Ltd and Yukos Moskva Ltd and was de facto the financial director of those companies and of the group as a whole. 93.     The system of “management agreements” made it possible to protect the mother company (Yukos plc) from civil and other liability for abusive interference in the business of its subsidiaries (page 308 of the judgment). Under those agreements the managing companies – such as Rosprom, Yukos Refining and Marketing Ltd and Yukos Explorations and Production Ltd – were required to act in the best interests of the production entities. However, in reality they acted in the applicants’ interests only. 94.     The applicants thus created a vertically-integrated group of companies where all important decisions were taken by them and their accomplices and then imposed on the production entities. The latter thus lost any independence. This enabled the applicants to redirect sales of the oil extracted by the production entities and prevent the minority shareholders in those entities and in Yukos plc from sharing the profits generated by the sales of crude oil. (ii)     Manipulating the price of oil within the group 95 .     In 1996 the applicants used their influence to compel the two production entities – Yuganskneftegaz plc and Samaraneftegaz plc – to conclude “general agreements” with Yukos. Those agreements contained an undertaking by the production entities not to sell their produce independently in the future, but only through Yukos. The agreements defined the principles for calculating the price of oil, which was based on the price of “oil well fluid” and provided for an independent evaluation of market prices for this “oil well fluid”. On the basis of those general agreements Yukos and its production entities concluded contracts for the sale of crude oil on conditions which were unfavourable to the production entities. Those deals were concluded “on the basis of malicious collusion with the representative of another party” and were thus contrary to Article   179 of the Civil Code (page 647 of the judgment; page 9 of the decision of the court of appeal). In 1998 a general agreement in similar terms was signed with Tomskneft plc. 96 .     Some of the directors representing the minority shareholders in the production entities objected to the practice of concluding contracts under such conditions, and even threatened Yukos with lawsuits. They claimed that the prices indicated in those contracts were much lower than the market price and that the production entities were thus deprived of their profits. However, the applicants overcame their resistance. To do so, they requested and obtained approval for the existing schemes of oil sales from the general meetings of shareholders. Those approvals covered all past sales and future sales for the next three years. The prosecution, with some exceptions, did not specify how many votes the applicants had at the general meeting of shareholders, how many votes they needed to approve the sales of oil, and in what way these approvals were in breach of the Public Companies Act. 97.     In order to obtain these approvals the applicants used various techniques. In particular, general meetings of the shareholders in the production entities were always presided by one of the Yukos executives. In addition, although Yukos and other companies affiliated with the production entities and owning shares in them ought to have been regarded as “interested parties” under the Public Companies Act of 1995 and, as such, should have been excluded from the voting, they did not acknowledge a conflict of interests and voted at those meetings along with other shareholders (page 9 of the decision of the court of appeal). 98 .     In some cases, where the applicants did not have the necessary number of votes, they succeeded in neutralising the resistance of “dissident shareholders” by having their shares seized by a court. Thus, in 1999 a Kaluga court opened proceedings against a group of “dissident shareholders” in Tomskneft plc. In those proceedings a certain Mr V. challenged those persons’ title to the shares in Tomskneft plc. According to the documents, Mr V. owned one share in Tomskneft plc. However, in reality he was not even aware of those proceedings or of the fact that he owned any shares. The lawyers working for the applicants had obtained from him, by deceit, a power of attorney. They then purchased one share in Tomskneft plc in his name, brought a lawsuit against the “dissident shareholders” and lodged a request for interim measures. Those measures consisted, inter alia , of a temporary prohibition on voting by the “dissident shareholders” at the general meetings. On 16 March 1999 a judge in a district court in the Kaluga Region issued an injunction against the “dissident shareholders”, as requested by the “plaintiff”. The applicants’ lawyers brought with them a