Opinion ID: 791130
Heading Depth: 3
Heading Rank: 1

Heading: The Unpaid Oil Dispute

Text: 6 In 1999, an audit of Yugraneft's books and records raised questions regarding the adequacy of the initial capital contribution made by Chernogorneft. As a result, Norex's equity interest in Yugraneft was increased and Chernogorneft's reduced. Meanwhile, Chernogorneft, now controlled by TNK, found itself unable to repay Yugraneft for 70,000 metric tons of oil, part of a larger oil loan made in 1993. At the same time, another company in which TNK also owned a substantial interest owed Yugraneft payment for 102,000 metric tons of oil. 7 In November 1999, TNK official German Khan met with Norex Chairman Alex Rotzang in San Francisco and demanded that Yugraneft forgive the aforementioned oil debts, threatening that otherwise TNK would run over Yugraneft like a steamroller, because TNK eliminate[s] those who go against us. Compl. ¶ 199. The following year, in August 2000, Khan urged Yugraneft General Director Lyudmilla Kondrashina to settle the oil debt for 30% of its value, threatening that a refusal would leave Yugraneft with nothing because TNK had its own people at all levels of government. Id. ¶ 202. Khan repeated the 30% offer in January 2001, warning Kondrashina that, unless she agreed, TNK would take over Yugraneft. He stated that any litigation to challenge such a takeover would prove futile because TNK `controlled' Russia's Supreme Arbitration Court. Id. ¶ 206.