Business Maverick: Vodka Brands Seized From Kremlin Prove a Hard Sell

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Russian vodka isn’t for everyone. State-owned vodka brands failed to sell at a Dutch auction on Tuesday, in a blow to the ex-owners of Yukos Oil Co. attempting to enforce a record court award against the Kremlin.

The 18 trademarks, including Stolichnaya and Moskovskaya, covering Belgium, Netherlands and Luxembourg weren’t sold to the highest bidder of €200,000 in The Hague, in an auction that attracted just two offers. The former owners of Yukos had intended to use the proceeds to help claw back some of the more than $50 billion arbitration award they won against the Russian government.

Despite not being able to sell GML, a holding company of the ex-owners, remained upbeat. The auction was an important first step after 17 years of litigation and established that the company can get through to the enforcement phase, Tim Osborne, chief executive of GML, said. “We are not here to just throw assets away. We are looking to collect $57 billion – 58 billion,” he told reporters after the auction.

The auction is part a string of legal proceedings initiated by GML since 2005. Yukos was liquidated for back taxes after President Vladimir Putin began securing state control over the Russian oil industry in 2003. Yukos’s chief executive officer Mikhail Khodorkovsky was jailed, precipitating a break up of the oil exporter.

In 2014, a Dutch arbitration court ordered Russia to pay more than $50 billion in compensation to GML. The Kremlin has consistently refused to pay the

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