According to the appeal court, recognition of the bankruptcy was not warranted because the Russian authorities had purposely engineered the bankruptcy. In doing so, they violated fundamental legal principles. Extremely high, non-legitimate VAT levies with fines were imposed on Yukos Oil, which the company had to pay within a short time. In the ensuing tax proceedings, Yukos Oil was given no opportunity to present a proper defence. On various points, these proceedings did not meet the requirements of due process. Yukos Oil received no response to its requests for any kind of settlement arrangement. The auctioning of Yuganskneftegaz, a large oil-production business owned by Yukos Oil, was also not conducted properly. This led the appeal court to conclude that recognition of the Russian judgment declaring bankruptcy was contrary to Dutch public policy. Within the Dutch legal order, therefore, the bankruptcy judgment has no legal effect.