Appeal to reinstate the Arbitral Awards
In 2014 an independent, international Arbitral Tribunal in The Hague ruled unanimously that one of Russia’s most successful companies, Yukos Oil, was illegally expropriated by the Russian Federation. The Tribunal awarded compensation of $50 billion to former Yukos majority shareholders. In its Final Awards, the Tribunal concluded that:
- “Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a State-controlled company, and incarcerate a man who gave signs of becoming a political competitor;
- the State’s campaign of intimidation and harassment not only disrupted the operations of Yukos but also contributed to its demise;
- the primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets.”
The Russian Federation applied to the Dutch courts to have the Arbitral Awards set aside. (National courts in The Netherlands have jurisdiction over the set-aside process since the international arbitral proceedings took place on Dutch territory.) In 2016, the District Court of The Hague decided to set aside the Arbitral Awards: it ruled that the Arbitral Tribunal did not have jurisdiction to hear the claims since the Russian Federation had signed but not ratified the Energy Charter Treaty, the legal basis for the arbitral proceedings. The merits of the Arbitral Awards – the findings that the destruction of Yukos by the Russian State was unlawful and politically motivated – remain unchallenged.
We believe the District Court’s decision is fundamentally flawed and must be overturned. In 2017, we submitted our Statement of Appeal to The Hague Court of Appeal. You can read it here.
On 23-24 and 30 September 2019, The Hague Court of Appeal will hold a substantive hearing on the appeal. The central question to be overturned remains whether the Arbitral Tribunal had jurisdiction, based on the Energy Charter Treaty, to hear the claims against the Russian Federation. You can read the most recent pleadings here and a fact sheet on provisional application of the Energy Charter Treaty here.
We are confident in our arguments, and believe the rule of law will prevail.