• Court of Appeal verdict clears way for $352.6m in pay-outs
• Shell overstated oil reserves in 2004 scandal and fined by FSA

Thousands of shareholders are now able to begin claiming compensation from Royal Dutch Shell for the reserves scandal in 2004 that led to a £17m fine by the Financial Services Authority and the ousting of the oil group’s then chief executive.

A decision in the Amsterdam Court of Appeal on Friday has cleared the way for approximately $352.6m (£218.5m) in compensation to be paid out to non-US shareholders. The Court of Appeal verdict follows a hearing in November and shareholders believe it is an important step in avoiding US-style class action suits.

The Dutch settlement is not the result of litigation but part of a collaborative approach agreed and supported by both Royal Dutch Shell and European institutional investors and pension funds. It is being conducted in the Netherlands, where Shell is headquartered, and takes place under Dutch collective settlement arrangements introduced in 2005.

Private shareholders seeking compensation need to contact VEB, a Dutch private shareholders association that has been funded to assist individual shareholders who want to participate in the Dutch settlement.

Aviva Investors said: “We are delighted with the decision by the Amsterdam Court of Appeal. The settlement provides welcome closure to the reserve misstatements for both the company and its shareholders. The case has also set important precedents, both for shareholder collaboration and for the jurisdictional scope of such cases. It’s important now for pension funds and others to ensure that their claims will be properly filed.”

The proposed settlement will cover approximately 9.5% to 12.8% of estimated damages – a larger amount than is often achieved by US class action lawsuits.

The pay-out for investors has been on the cards since 2007 when Shell promised to offer compensation “without admitting any wrongdoing”. It has already set aside £250m in its accounts for investor compensation.

News that the oil giant had overstated reserves in submissions to the US regulator, the Securities & Exchange Commission, led to the departure of Sir Philip Watts, the chief executive, and Walter van de Vijver, Shell’s then exploration chief. It came as a serious shock to investors and left Shell’s reputation – and share price – in such tatters that there was speculation it would be taken over by a resurgent BP. The FSA subsequently fined Shell for committing market abuse and breaches of the listing rules after making misleading statements between 1998 and 2004.