Originally from Journal of Damages in International Arbitration

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I. INTRODUCTION

In Quasar de Valores SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A., ALOS 34 S.L. v. The Russian Federation, an SCC tribunal found that the Russian Federation’s actions amounted to an expropriation of the Yukos Oil Company pursuant to the Agreement for Reciprocal Promotion and Protection of Investments between Spain and the USSR (“BIT”). As a result, the Tribunal awarded the Claimants1 approximately USD $2 million plus interest for the destruction of the value of their proportionate share of the what the company’s market value would have been but for the expropriatory measures.

II. BACKGROUND

Article 6 of the BIT states that any expropriation by either Party on the grounds of public use and in accordance with the legislation must be non-discriminatory and must adequately compensate the investors. Additionally, Article 10 provides for arbitration in the absence of amicable settlement “between one Party and an investor of the other Party relating to the amount or method of payment of the compensation due under article 6 . . . .”2