The Netherlands. On April 20, 2016, in a surprising turn of events, the District Court in The Hague set aside six arbitral awards against Russia in the Yukos matter (three interim awards and three final awards), by way of which Russia had been ordered to pay the former majority shareholders of the Yukos Oil Company more than USD 50 billion for unlawful expropriation of investments. With this decision the largest arbitral awards in history have been overturned.
As we have previously reported on this case over the years (see DRJ May/July 2009, page 12; DRJ Nov. 2010 / Jan. 2011, page 91; DRJ Vol. 68 No. 1 2013, page 117), the Yukos saga began in 2003 when the Russian tax authorities accused Yukos of large-scale tax evasion. This led to the imprisonment of Yukos’ owner, Mikhail Khodorkovsky, the bankruptcy of Yukos and the transfer of its assets to Russian state-owned companies such as Rosneft and Gazprom. The former shareholders of Yukos commenced UNCITRAL arbitral proceedings at the Permanent Court of Arbitration in The Hague in February 2005, alleging violations of the Energy Charter Treaty (“ECT”).
In November 2009, the arbitral tribunal (composed of renowned arbitrators Yves Fortier (chairman), Charles Poncet and Stephen Schwebel) issued interim awards concluding that it had jurisdiction under the ECT. In July 2014 the tribunal issued final awards ordering the Russian Federation to pay more than USD 50 billion, the most ever awarded in international arbitration.