AMSTERDAM—A court in the Netherlands on Wednesday handed Russia victory by quashing a $50 billion compensation claim awarded to the shareholders of the now-defunct oil company Yukos.

The court in The Hague overturned a 2014 decision of an international arbitration panel which ruled Russia owed the shareholders more than $50 billion for what it described as the Kremlin's "devious and calculated expropriation" of assets designed to bankrupt the firm.

The Permanent Court of Arbitration lacked jurisdiction to rule on the matter because the case was brought under the Energy Charter Treaty which has never been ratified by Russia, the Dutch court said. "With the arbitration awards quashed, the Russian Federation is no longer liable for paying compensation to these parties," it said.

The Dutch court was authorized to rule on the matter because the arbitration panel is based in The Hague.

Yukos was once Russia's largest oil company's before its main shareholder and chief executive Mikhail Khodorkovsky was arrested and charged with fraud and tax evasion. Mr. Khodorkovsky, who was released from prison in 2013, said the charges were politically motivated. Yukos was hit with tens of billions of dollars in back-tax claims.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

(END) Dow Jones Newswires

April 20, 2016 05:25 ET (09:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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