Posts Tagged ‘roscosmos’

The Man from Y.E.A.R. — Yukos, Eutelsat, Arianespace and Roscosmos

Monday, April 11th, 2016

Путін Хуйло.

Remember that $50 billion arbitration award to Yukos? Well, as with any judgement award, the tougher next step is actually getting paid. If you expect Russia to simply write a checks to a former Yukos shareholders, then go fly a kite.

They threatened to start seizing assets outside of Russia, so Putin’s commanding everything they own get a diplomatic property plate slapped on it. Afterwards, many buildings in Paris became part of the Russian consulate.

So now we find a couple of asset seizures from two Paris-based entities: Eutelsat and Arianespace. The Eutelsat assets seized were related to 15-year lease on the Express AT2 spacecraft, which launched in 2014, at $400 million. The Arianespace assets are related to rocket launch service, likely related to Soyuz launchers out of Kourou, and worth $300 million.

Would you be surprised if Luxembourg was next on the list?

Not at all, given Gazprom’s involvement with SES S.A.

Here’s the story by Michael D. Goldhaber, in American Lawyer (subscription)…

The Russian social contract rests on a tacit agreement between the businessmen and politicians not to talk about their mutual corruption. In Russia’s desperation to roll back history’s biggest arbitration award, this bargain is breaking down.

In July 2014, arbitrators ordered Russia to pay 
$50 billion to the oligarchs from whom it seized Yukos Oil Co. At a Feb. 8 hearing to set aside this award, Russian counsel Albert Jan van den Berg told the Hague District Court: “If we want to talk about the reality of this case, we have to go back to … the disintegration of the Soviet Union.… A handful of oligarchs were robbing state-owned companies blind.” On April 20, a Dutch court will decide whether “you stole it first” is a valid defense.

In the “loans for shares” program of 1995-1996, Russia allowed a larger group of oligarchs to transfer control of a dozen major companies to themselves in exchange for loans to help Boris Yeltsin balance his budget and thwart the Communists’ return to power. Russia chose Mikhail Khodorkovsky’s Bank Menatep to hold the initial Yukos auction and share tender. Two Menatep affiliates submitted the only bids. The winner bought 33 percent of Yukos in exchange for $159.5 million, committed to invest $200 million in the company and won the right to lend the state $159 million secured by another 45 percent of Yukos.

When Russia defaulted on that loan, Menatep organized a new auction, with two Menatep affiliates again emerging as the only bidders. One bought the secured shares for $160.1 million. Menatep’s total commitment was $518.6 million. By the next year, Yukos was publicly valued at $6 billion. Other crown jewels of the Russian economy that were privatized in this creative manner include Lukoil, Mechel, Norilsk Nickel and Sibneft.

Putin tolerated Khodorkovsky until he publicly questioned the integrity of another state oil deal in 2003, as we described in our ongoing coverage.Then prosecutors tested a long list of pretexts for hounding Yukos into liquidation. They never even considered going after Yukos for rigging a state auction, because that remained business as usual. Indeed, the state would recover Yukos’ main asset in 2004 by means of—you guessed it—a rigged auction.

As the 10th anniversary of Yeltsin’s “loans for shares” approached in 2005, the Duma passed a law at Putin’s urging that cut the statute of limitations for challenging a privatization. At that moment, a legal accounting seemed unlikely either for the oligarchs stealing Yukos, or for the government stealing it back.

But before Russia dismantled Yukos, the Menatep oligarchs had passed their shares to corporate shells based in jurisdictions that signed an investment treaty with Russia known as the Energy Charter Treaty. “It looks like someone mapping the Ebola virus,” a Russian counsel says of their tangled legal structure. In 2005, three offshore affiliates of Group Menatep (now GML Ltd.) filed claims for expropriation.

With Cleary Gottlieb Steen & Hamilton defending the arbitration, Russia argued only in passing that “loans for shares” sullied the oligarchs’ hands. The arbitrators, in their 1,888-point ruling of 2014, dismissed the argument in one formalistic point. Russia had failed to adequately connect Bank Menatep’s allegedly illegal “loans for shares” scheme with the claimants’ “investment” in Russia, they concluded, because the claimant entities were separate from Bank Menatep and its oligarchs. The reasoning of paragraph 1370 struck us as the award’s weak link immediately. The arbitrators didn’t back up their assertion of corporate separateness. And they never tested the alleged illegality.

Now, Russia’s only recourse is in the Netherlands. (The day before the 2014 award, a Russian missile killed 193 Dutch citizens over the Ukraine.) At first, in January 2015, Russia told the Dutch court that “legal infirmities surrounding Yukos’ founding” were not a basis for a set-aside. Then White & Case took over Russia’s case from Cleary. With White & Case’s guidance, Russia is making “loans for shares” central to its enforcement defense in Washington, D.C., France, England, Germany, Belgium and the Netherlands.

Russia only raised “loans for shares” in Dutch court early this year. Even though it had confiscated Yukos’ share registry in 2003, Russia presented the evidence as newly discovered because “the code was not cracked until October 2015.”

Yukos’ counsel, Shearman & Sterling’s Emmanuel Gaillard, teases Russian intelligence: “It took the FSB 12 years to crack a code? This is very disappointing.”

Russia argues in its Dutch challenge that the arbitrators lacked jurisdiction because the Energy Charter Treaty does not extend a nation’s consent to arbitrate toward investors who make an illegal investment. (Russia also renews its arguments that it never ratified the treaty and that the claimants are Russian nationals, among other things.) For all the same reasons, Russia contends that the usual exception to sovereign immunity for confirming an arbitral award doesn’t apply.

As a legal matter, the Yukos camp counters that Energy Charter jurisdiction is predicated on claimants’ status as “investors,” rather than their investment’s legality. Anyhow, they say, Russia clearly waived its “loans for shares” objection.

As a factual matter, the oligarchs say that Russia knew full well that Menatep lay behind the bid for Yukos—just as the arbitrators knew full well that Menatep lay behind the arbitration. Given the dire state of Yukos and Russia in 1995, and a ban on foreign bids, they say a half-billion-dollar commitment was nothing to sneeze at.At the end of the day, the oligarchs argue that “loans for shares” were legal because they were organized, overseen, monitored and later ratified by Russia.

The Global Lawyer accepts that the Russian “sale of the century” was an open secret, and a disgrace. We’ll let the Dutch courts assess its legality. Meanwhile the cat and mouse game begins. On Dec. 17, a Paris court declined to suspend enforcement of the Yukos award pending appeal.

Gaillard complains that “Russia is busy slapping diplomatic plaques after the fact on every piece of property it owns in Western Europe.” Russia persuaded Belgium to enact a “Yukos Law,” requiring that a judge preauthorize asset attachment. It pressured Belgian diplomats and French police to block local functionaries from taking inventory at buildings the oligarchs seized. Most ominously, Russia warned in a July 15 diplomatic note that it will consider any American enforcement as grounds for retaliation against U.S. citizens and businesses.

Even so, the oligarchs have provisionally seized close to $1 billion in assets in France—including $400 million owed by Eutelsat to the Russian Satellite Communications Co. for satellite capacity and $300 million owed by Arianespace to Roscosmos for rocket launchers. One billion down, says Shearman. Forty-nine billion to go, says White & Case.

More Russian Bullshit

Tuesday, May 20th, 2014

The original agreement for the International Space Station was to operate it until 2020.

So why is deputy prime minister Rogozin telling NASA to use a trampoline?

Thanks to Emily Gertz for pointing it out.

The U.S. is relying on Russia for transporting astronauts to and from the ISS for several years, and Russia’s space station modules currently provide propulsion for the structure. But on board the station itself, Oberg says, Russia’s sections and crew rely upon American-made and operated equipment for electricity and communications. Further, Russia’s effort to to complete and launch its own science section is “years behind schedule,” says Oberg, so it must rely upon the labs contributed by other nations.

No matter what happens with Russian space policy, Oberg is excited for the next decade of space science, which he believes will be shifting from a “CERN model” of multiple nations contributing to and collaborating at one research facility, to “the Antarctica model” of many smaller stations forming and ending cooperative efforts as the science requires.

If Russia does exit the ISS soon after 2020, he says, it will happen at about the same time that new “human-rated” spacecraft like SpaceX’s Dragon come into use, and end Russia’s current lock on crew transportation.

“The Ukraine crisis has not diverted the station’s evolution into a new path,” Oberg says. “It may have put into sharper focus the different paths the station could follow, but that was happening anyway.”

Good luck with those sanctions.




RD-180 Engines Suck

Friday, May 16th, 2014

Elon Musk is standing up to Russian imperialism: “It’s very questionable in light of international events. It seems like the wrong time to send hundreds of millions of dollars to the Kremlin.”

Not only is he standing up for doing the right thing, he’s standing up to two 800-lb. gorillas in the military-industrial-complex: Boeing and Lockheed Martin. They’re co-owners of United Launch Alliance, launch service providers to the U.S. Air Force. ULA buys RD-180 engines from NPO Energomash in Russia. Like most important businesses in Russia, it’s controlled by Putin’s Mafia State.

So the pussy lawyers had this to say…

“ULA and the U.S. Department of Justice filed motions to dissolve the preliminary injunction supporting ULA’s earlier statements that the purchase of the RD-180 engines from our suppliers and partners, RD AMROSS and NPO Energomash, does not violate the Ukraine sanctions.

“Unfortunately, SpaceX has made many public but unfounded speculations to create negative perceptions of a competitor solely for purposes of its own self-interest. This frivolous lawsuit caused unnecessary distraction of our executive branch leaders during a sensitive national security crisis.

“The letters from U.S. Departments of State, Treasury and Commerce clearly state that NPO Energomash is not subject to any of the current sanctions and that ULA’s continued purchase of the RD-180 does not directly or indirectly contravene the Ukraine sanctions.

“As a result, both ULA and the Department of Justice have requested that the injunction be immediately lifted.”

As he’s been doing to honest business people in Russia, Putin is now fucking with international business.

Take this business away from entities controlled by Russian mafia and give it to an honest, smart, hard-working American company: SpaceX.

Who would you rather do business with: innovative leaders or murderous managers?

And which launch system is more reliable? The American one, naturally. Atlas launches cost 40-50% more than Russian launches (86% success rate since December, 2010). It’s worth it to keep the engineering talent and expertise here in the U.S.

Here’s another Proton failure, an anomaly at T+9:00 with the third stage. With a beast of a bird onboard (Express-4R/«Экспресс-АМ4Р» — a Eurostar 3000 bus built by Astrium), its payload had 30 C-band, 28 Ku-band, 2 Ka-band, and 3 L-band transponders — so this has to hurt.

When Russian contractors work for American or European customers, everything they do has to be diligently verified. With only Russian customers, nobody really cares that much. This is a remnant of the Soviet system and must be changed. You can’t complete as a world-class company with this attitude.

Here’s the video (warning: there’s no dramatic explosion)…

The detail given comes to us courtesy of SpaceFlightNow.com

The Express AM4R spacecraft, worth approximately $200 million, was supposed to begin a 15-year mission beaming radio, television, broadband Internet and telephone services across Russia and neighboring countries.

But a few minutes after the 12,720-pound (5,770-kilogram) Express AM4R satellite launched from Baikonur, Russia’s primary space base, its Proton rocket ran into a problem.

The failure occurred during the third stage of the Proton’s ascent into orbit, according to a statement by the Khrunichev State Research and Production Space Center, the Moscow-based manufacturer of the Proton launcher.

An announcer declared an emergency during a live webcast of the launch, and Khrunichev’s statement also described the incident as an “emergency situation.”

Khrunichev said experts were analyzing telemetry to determine the cause of the failure.

A report by Interfax said debris from the rocket may have fallen the Altai or Amur regions of Russia’s Far East.

Spewing a brilliant flame of blue exhaust, the 19-story Proton rocket lifted off at 2142 GMT (5:42 p.m. EDT) to start a nine-hour flight to deploy the powerful European-built Express AM4R telecommunications satellite for Russian government and commercial customers.

The launch was at 3:42 a.m. local time at Baikonur.

The hydrazine-fueled rocket disappeared from the view of a ground-based tracking camera a few minutes later, with no visible signs of any trouble.

But a problem occurred about 545 seconds, or about 9 minutes, after liftoff, according to a report by the semi-official Itar-Tass news agency.

Another report by the Interfax media service said the time of the failure was about 500 seconds after launch.

Both of the times reported for the anomaly occurred during the firing of the Proton rocket’s third stage, which is powered by an RD-0213 main engine generating 131,000 pounds of thrust. A four-nozzle vernier steering engine is also mounted on the third stage to keep the rocket pointed in the right direction.

The rocket’s guidance, navigation and control system is a triple-redundant digital avionics package on the third stage.

Thursday’s mishap marks the fifth launch failure of the Proton rocket or its Breeze M upper stage in 36 flights since December 2010. Another Proton/Breeze M mission put the Russian Yamal 402 communications satellite in the wrong orbit, but the spacecraft was able to boot itself to the correct location.

The string of mishaps has brought focus on the quality control procedures of Khrunichev and its suppliers, with the Russian space contrator announcing expanded inspections, video monitoring in its factories and other measures to bolster the Proton’s reliability.

I suspect commercial payload customer on the Proton manifest are scrambling: Express AM6, Inmarsat 5 F2, ASTRA 2G and Turksat 4B.