Yukos Capital

 

 

 

A central feature of the dispute was that the bankruptcy of Yukos, which followed from allegedly inflated tax claims, caused a forced sale at below market price of its main assets, including key production subsidiaries. Subsequently, Yukos was found to be the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction. There is a wide variety of commercial assets against which the claimants may seek to enforce. These include valuable goods that Russia is looking to import from abroad, such as the two Mistral-class military vessels currently being built in France.

The PCA that heard the majority shareholders’ claim under the Energy Charter Treaty ruled that Russia had expropriated Yukos .After ten years of legal dispute, the former owners of Yukos have succeeded in obtaining three parallel awards against the Russian Federation from the Permanent Court of Arbitration in The Hague for more than $50 billion (Hulley Enterprises Limited (Cyprus) v The Russian Federation (PCA Case No AA 226), Yukos Universal Limited (Isle of Man) v The Russian Federation (PCA Case No AA 227) and Veteran Petroleum Limited (Cyprus) v The Russian Federation (PCA Case No AA 228)).

In a separate arbitration, heard in New York under ICC rules in 2007, a tribunal chaired by Swiss arbitrator Bernhard Meyer-Hauser, issued an award finding Samaraneftegaz liable for default under two loan agreements that the parties had entered in 2004, when both were part of Yukos. In August 2013, the US Court for the Southern District of New York confirmed the US$185award and the same court later issued an order restraining Samaraneftegaz from moving its assets until it satisfied the award.

On 4 November 2014, US Court of Appeals for the Second Circuit issued issued a summary order, under which A former arm of the bankrupt Russian oil company Yukos is set to enforce a US$185 million ICC award in its favour, after the Court rejected a Rosneft subsidiary’s (Samaraneftegaz) appeal against its confirmation.

On 5 November 2014, The French Supreme Court (Cour de cassation) has allowed an appeal by Yukos and overturned a decision of the Paris Court of Appeal in which it refused to enforce an ICC award in favour of Yukos. The Court of Appeal had found that the defendant had not received various notices during the arbitration, including procedural orders and the transcript of the hearing. The Supreme Court reiterated that the party alleging that an arbitrator has breached the principle of due process bears the burden of proving that allegation. In this case, the award stated clearly that communications had been received by the party. In ruling as it had, the Court of Appeal had reversed the burden of proof, thereby breaching Article 1520 4° of the Code of Civil Procedure and Article 1315 of the French Civil Code (In Yukos Capital v Oktrytoye aktsionernoye obshestvo tomskneft vostochnoi neftyanoi kompanii, Cour de cassation, Civ 1, 5 November 2014, Pourvoi n° K 13-11.745).

Source:

http://globalarbitrationreview.com/news/article/33138/yukos-award-upheld-new-york-but-not-us50-billion-one/