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Arbitration
+-The former majority shareholders of Yukos (Hulley Enterprises Limited, Yukos Universal Limited and Veteran Petroleum Limited) brought arbitration proceedings in 2004 against the Russian Federation under the Energy Charter Treaty (ECT) for the illegal and politically motivated expropriation of their investment. Those arbitration proceedings were seated in The Hague. In 2014, the independent Arbitral Tribunal awarded the former majority shareholders more than $50 billion in compensation for the expropriation of their investments in Yukos.
Final Award of The Hague Tribunal under Energy Charter Treaty Yukos International and Russia
July 18, 2014 — The independent Arbitral Tribunal in The Hague concluded unanimously that “Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a State-controlled company, and incarcerated a man who gave signs of becoming a political competitor”, and awarded the former majority shareholders $50 billion in compensation.
Final Award of The Hague Tribunal under Energy Charter Treaty Veteran and Russia
July 18, 2014 — The independent Arbitral Tribunal in The Hague concluded unanimously that “Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a State-controlled company, and incarcerated a man who gave signs of becoming a political competitor”, and awarded the former majority shareholders $50 billion in compensation.
Final Award of The Hague Tribunal under Energy Charter Treaty Hulley and Russia
July 18, 2014 — The independent Arbitral Tribunal in The Hague concluded unanimously that “Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a State-controlled company, and incarcerated a man who gave signs of becoming a political competitor”, and awarded the former majority shareholders $50 billion in compensation.
Interim arbitral award on jurisdiction and admissibility Yukos Universal and Russia
November 30, 2009 — The independent arbitral tribunal in The Hague rules that the dispute between former Yukos majority shareholder Yukos Universal and the Russian Federation is admissible and within its jurisdiction, and that the Tribunal has jurisdiction over the Russian Federation on connection with the merits of the dispute.
Interim arbitral award on jurisdiction and admissibility Veteran and Russia
November 30, 2009 — The independent arbitral tribunal in The Hague rules that the dispute between former Yukos majority shareholder Veteran Petroleum Limited and the Russian Federation is admissible and within its jurisdiction, and that the Tribunal has jurisdiction over the Russian Federation on connection with the merits of the dispute.
Interim arbitral award on jurisdiction and admissibility Hulley and Russia
November 30, 2009 — The independent arbitral tribunal in The Hague rules that the dispute between former Yukos majority shareholder Hulley Enterprises Limited and the Russian Federation is admissible and within its jurisdiction, and that the Tribunal has jurisdiction over the Russian Federation on connection with the merits of the dispute.
Set-Aside
+-The Russian Federation is permitted to challenge the Arbitral Awards rendered in favour of the former majority shareholders of Yukos before the Dutch courts and ask that the Awards be set aside as the arbitration was seated in The Hague. In 2016, before the District Court of The Hague, that challenge was successful and the Awards were set aside. On appeal, in 2020 the Court of Appeal of The Hague overturned that decision, rejected all arguments of the Russian Federation as to why the awards should be set aside and reinstated the Awards. The Dutch Supreme Court affirmed the substance of that ruling in November 2021, ruling in favor of the former majority shareholders on seven of the eight grounds pleaded by the Russian Federation. However, one ground was referred by the Supreme Court to the Court of Appeal of Amsterdam for further consideration. On February 20th 2024, the Amsterdam Court dismissed that argument on appeal, concluding that the arbitral awards stand.
Judgment of the Amsterdam Court of Appeal
February 20th, 2024 — The court finds that the Russian Federation did not make a timely appeal on the fraud allegation. In addition, the court finds that certain documents upon which the Russian Federation bases its appeal should have been introduced earlier, that the subject the documents refer to, is not relevant for the judgment of the arbitrators, and that an appeal on alleged fraud would not have been successful because it’s not plausible that the arbitrators would have come to a different decision. Conclusion: the arbitral awards stand.
Judgment of the Dutch Supreme Court
November 5, 2021 — The Dutch Supreme Court affirmed the substance of the ruling of The Hague Court of Appeal, ruling in favor of the former Yukos shareholders on seven of the eight grounds. The Dutch Supreme Court decided that certain factual allegations need to be reviewed in full (having been decided previously by the Court of Appeal on purely procedural grounds). Therefore, the Supreme Court has referred the case to the Court of Appeal in Amsterdam, which will review this one limited issue.
Opinion of the Procurator General at the Dutch Supreme Court
April 23, 2021 — The Advocate-General of The Netherlands advised the Dutch Supreme Court to dismiss the Russian Federation’s cassation appeal in its entirety and to uphold the 2020 Court of Appeal ruling which reinstated the Arbitral Awards in favour of the former Yukos majority shareholders. The Awards order Russia to compensate the shareholders for the unlawful expropriation of their investment.
Final judgment The Hague Court of Appeal
February 18, 2020 — The Hague Court of Appeal overturned the 2016 decision of the District Court of The Hague (which set the Abitral Awards aside) and fully reinstated the $50 billion Arbitral Awards of 2014, which order the Russian Federation to compensate the former Yukos majority shareholders for the unlawful expropriation of their investment.
Interim judgment The Hague Court of Appeal
September 28, 2018 — The Hague Court of Appeal clarifies the procedures in the set-aside proceedings.
Judgment The Hague District Court
April 20, 2016 — The Hague District Court sides with the Russian Federation and reverses the Arbitral Awards on appeal, concluding that the Russian Federation was not bound by the provisional application of Article 26 of the Energy Charter Treaty containing the offer to arbitrate, despite Russia having consented to its provisional application pursuant to Article 45 of the Treaty.
Enforcement
+-In order to enforce the Arbitral Awards against assets of the Russian Federation, the Awards must first be recognised as judgments in the jurisdiction in which those assets are based. The Russian Federation may resist recognition on the basis that (i) it is a sovereign state and thus immune from the jurisdiction of the local courts and (ii) that one of the defences to recognition provided under Article V of the New York Convention 1958 applies. Once those challenges are dealt with, it is possible to enforce against and attach commercial assets of the Russian Federation. However, the Russian Federation may also challenge those attachments on the basis, for example, that the attached assets are not commercial in nature or are not its property but those of a separate entity. Only after those challenges have been disposed of can the assets be sold to recover sums due from the Russian Federation. Below are jurisdictions in which recognition and enforcement proceedings have been commenced.
Judgment Dutch Supreme Court HVY vs Russian Federation
March 22, 2024 — The Dutch Supreme Court dismissed the Russian Federation’s last appeal against the seizure of the Benelux trademarks of the iconic Russian vodka brands, Stolichnaya and Moskovskaya. This means Russia has exhausted its last possibility to prevent the former majority Yukos shareholders from putting the rights up for sale in the process of execution of their Arbitral Awards of more than $50 billion in damages for the illegal and politically motivated expropriation of their investments in the Russian oil giant.
Judgment Dutch Supreme Court HVY vs FKP Sojuzplodoimport
March 22, 2024 — The Dutch Supreme Court dismissed the Russian State Enterprise FKP Sojuzplodoimport appeal against the seizure of the Benelux trademarks of the iconic Russian vodka brands, Stolichnaya and Moskovskaya.
Memorandum Opinion from the US District Court for the District of Columbia
November 17, 2023 — The United States District Court for the District of Columbia ruled that Russia cannot hide behind immunity from jurisdiction in the enforcement proceedings brought by former Yukos majority shareholders. The court has asked both parties to submit a schedule proposal for resolution of the final remaining issues by December 5th, 2023.
Judgment High Court of Justice
November 1, 2023 — The High Court in London rejected the Russian Federation’s attempt to hide behind state immunity from jurisdiction in the enforcement proceedings brought by the former Yukos majority shareholders. The next hearing in these proceedings will be scheduled for the first date that the Court is available after mid May 2024.
Judgment High Court of Justice
October 26, 2022 — The High Court in London today lifted the stay on proceedings to have the 50-billion-dollar Arbitral Awards against the Russian Federation for the illegal, politically motivated expropriation of Yukos Oil recognized in England and Wales. This means that the former Yukos majority shareholders can resume their proceedings to have the 50-billion-dollar Arbitral Awards recognised and enforced against Russian state assets located in England and Wales.
Judgment of The Hague Court of Appeal
June 28, 2022 — The Dutch Court of Appeal in The Hague approved the seizure of the Benelux trademarks of iconic vodka brands Stolichnaya and Moskovskaya by the former Yukos majority shareholders to enforce their $50 billion damage claim against the Russian Federation for the illegal, politically motivated expropriation of the Russian oil giant in 2003.
Memorandum Opinion from the US District Court for the District of Columbia
April 14, 2022 — In this Memorandum Opinion, Chief Judge Beryl A. Howell concludes that delay in this case has already been substantial: the arbitration underlying this litigation was initiated almost two decades ago and the Dutch set-aside proceedings that started in 2014 have yet to be resolved eight years later, with no evident resolution in the horizon. Eight years after their initiation, with the economic response to war in Ukraine increasingly compromising the Shareholders’ ability to access Russian Federation assets in the United States in the event of succeeding in this action, the confirmation proceedings in this forum must proceed.
Ruling High Court of Justice
April 1, 2022 — The decision of the Supreme Court of the Netherlands significantly changes the landscape since the Court’s previous judgment on 14 April 2021, because it finally determines against Russia all the grounds which were advanced as being relevant to the questions of jurisdiction and immunity. The judge sets a sensible and reasonable procedural timetable for service of the evidence in relation to the renewed application.
Judgment High Court of Justice
April 14, 2021 — The Court dismisses the claimants application to lift the stay on enforcement procedures in England and Wales.
Judgment of the Dutch Supreme Court
December 4, 2020 — The Dutch Supreme Court denies the suspension application of the enforcement. There is no longer any interest in assessing the application for a provisional suspension until the Supreme Court has rendered a decision on the suspension application.
Memorandum Opinion from the US District Court for the District of Columbia
November 20, 2020 — The United States District Court for the District of Columbia grants the Russian Federation’s motion to stay enforcement procedures in the United States, and rules that this case will remain stayed until the earlier of November 18, 2022 or the conclusion of the proceedings to set aside the Awards in the Dutch Supreme Court.
Judgment The Hague District Court
October 27, 2020 — The Court concludes there is an unlawful attachment of FKP’s assets which cannot serve as an object of recovery against the Russian Federation. Furthermore, since HVY’s reliance on abuse of rights is not valid, the attachment must be lifted.
Memorandum Opinion from the US District Court for the District of Columbia
September 30, 2016 — At the request of the majority shareholders, the United States District Court for the District of Columbia grants a stay in enforcement proceedings pending a decision by the Court of Appeal in The Hague in the set-aside proceedings.
International treaties
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Energy Charter Treaty (1994)
Signed in 1994, the Treaty declares that every participating state shall “encourage and create stable, equitable, favourable and transparent conditions for investors”. It explicitly guards against illegal expropriation: investments shall not be nationalised or expropriated except where such a measure is in the public interest, non-discriminatory, lawful and duly compensated.
Vienna Convention on Law of Treaties (1969)
United Nations Treaty which recognises the ever-increasing importance of treaties as a source of international law and as a means of developing peaceful cooperation among nations; and affirms that disputes concerning treaties should be settled by peaceful means and in conformity with the principles of justice and international law.
New York Convention (1958)
The Convention facilitates the cross-border recognition and enforcement of arbitral awards.