(1) Whether the provisional application of the Energy Charter Treaty ('ECT') by the Defendant pursuant to Article 45(1) of the ECT means that the Defendant had offered to submit disputes arising under the ECT to arbitration pursuant to Article 26 of the ECT.
(2) Whether, as a matter of the construction of the ECT, Articles 1(6) and 1(7), the Claimants were 'Investors', whether there was a relevant 'investment', and whether the Claimants were entitled to invoke the dispute resolution provisions of Article 26 of the ECT.
(3) Whether Article 21 of the ECT (relating to 'taxation measures'), when read together with Article 26 of the ECT, means that there was no written agreement to submit the parties' dispute to arbitration.
'1. The proceedings are stayed from the date of this order (the "Stay").
3. The parties each have liberty to apply, without showing a change of circumstances, to lift the Stay following the handing down of the judgment of the Court of Appeal of The Hague. …'
(1) Henshaw J held that the Defendant's challenge to the jurisdiction, brought by the Jurisdiction Application, would have to be determined as a preliminary matter, and that, unless and until it was dismissed, the Court's power under s. 103(5) of the 1996 Act to adjourn the enforcement proceedings and/or to require the provision of security as a condition of such adjournment, would not arise.
(2) Henshaw J considered that parts of the Defendant's challenge to the Awards in the courts of the Netherlands had a real prospect of success. Those grounds included a challenge to the jurisdiction of the arbitral tribunal, on bases which overlapped substantially with the Jurisdiction Application; and an argument that The Hague Court of Appeal had erred in refusing to consider certain allegations of procedural fraud in the underlying arbitration.
(3) Henshaw J concluded, having weighed up the competing factors, that the stay should be continued. The prejudice to the Claimants arising from further delay in potential enforcement measures, without security in the meantime, was 'outweighed in the present case by the advantages referred to in §213(viii) and 213(ix) above of awaiting the ultimate outcome of the viable challenge which Russia is bringing in the courts of the Netherlands' (para. 214). The matters referred to by reference to paragraphs 213(viii) and (ix) were: (213(viii)), 'the advantages, where a challenge in the curial court has a realistic prospect of success, of allowing that process to run its course, in the interests of comity, avoidance of inconsistent decisions and efficiency'; and (213(ix)), 'the specific risk of unfairness that would arise if Russia were to be unable to advance (or to fail in) its full case on state immunity as a result of a binding effect of the decision of the Hague Court of Appeal on essentially the same issues, only for that decision to be later reversed by the Dutch Supreme Court (with or without a reference to the CJEU).'
(1) That at the directions hearing on 1 April 2022 Henshaw J had indicated that a future change of the Defendant's legal representation was unlikely to result in a postponement of the hearing once listed.
(2) The Defendant had failed to provide proper particulars of the efforts it had made to obtain alternative representation.
(3) The Defendant itself is not subject to sanctions, and as far as Stephenson Harwood LLP were aware, there were no sanctions in England and Wales which would prevent a solicitor or barrister from acting for the Defendant in connexion with the present proceedings.
(4) The Claimants would be prejudiced by an adjournment of a hearing which had been fixed since 5 April 2022.
(5) Any prejudice to the Defendant fell well short of a reason for an adjournment. The Defendant had already served its evidence. The Defendant could, if it wanted to, avail itself of English qualified assistance in Russia. The letter enclosed a list of solicitors registered with the Law Society who are based in Russia. Further, the Defendant could represent itself. Moreover, the hearing was procedural in nature, being only concerned with whether the stay should be lifted.
(6) In any event, any difficulties faced by the Defendant were of its own making. It had invaded Ukraine. If it withdrew and paid reparations, doubtless sanctions against Russian entities would be lifted.
'The Court rejects the … argument of FKP and the Russian Federation. In the setting aside proceedings, The Hague District Court reversed the arbitral awards on the ground that there was no valid arbitration agreement (Section 1065(1)(a) (old) Dutch Code of Civil Procedure). On appeal, this Court ruled that no ground for setting aside existed in this respect and the grounds for cassation directed against this were rejected by the Supreme Court. In its ruling of 5 November 2021, the Supreme Court only found ground for cassation I to be well-founded. According to this ground for cassation, this Court should not have rejected on formal grounds the argument that the arbitral awards are contrary to public policy (Section 1065(1)(d) (old) Dutch Code of Civil Procedure) because HVY is alleged to have acted fraudulently in the arbitration proceedings. After cassation and referral, only this assertion is still to be handled in the setting aside proceedings, which are now being conducted before the Amsterdam Court of Appeal. No court charged with the setting aside has yet ruled on the merits of this assertion. There are therefore pending setting aside proceedings, whereby the basic principle applies that these do not suspend enforcement (Section 1066(1) Dutch Code of Civil Procedure). The lapse of the leave for enforcement by operation of law on account of the setting aside of the arbitral award, as referred to in Section 1064(4) Dutch Code of Civil Procedure, is not at issue in this situation either.'
(1) That the Awards were procured by a fraud on the tribunal, including by the adducing of false evidence and the failure to disclose key documents.
(2) That the tribunal had no jurisdiction because the Defendant did not ratify the ECT; it had only applied it on a provisional basis, and that, pursuant to Article 45 of the ECT, provisional application was only to the extent not inconsistent with the Defendant's constitution, laws or regulations, which Article 26 would have been.
(3) That the Claimants were not 'investors' and their interests in Yukos were not 'investments' and so the tribunal had lacked jurisdiction.
(4) That the Claimants had acquired their shares in Yukos illegally and that their investments were not protected by the ECT and the tribunal had lacked jurisdiction.
(5) That the dispute related to Taxation Measures. It was therefore within the Article 21 ECT carve out, which qualified the Defendant's offer to arbitrate, and was thus a dispute which could not be referred to arbitration; alternatively that the tribunal had violated its mandate in not referring the dispute to the relevant Competent Tax Authorities under Article 21(5)(b)(i) of the ECT.
(6) That the tribunal had violated its mandate and been irregularly composed because parts of its role were delegated to an 'assistant'.
(7) That the tribunal wrongly overlooked evidence.
(1) The fact that the Defendant's Jurisdiction Application overlapped with the jurisdictional points which were raised by the Defendant's cassation appeal to the Dutch SC was a matter heavily relied upon by the Defendant at the hearing in front of Henshaw J last year as a reason for the stay being continued until the Dutch SC had given judgment. Thus in Mr Goldberg's Third Witness Statement, served on behalf of the Defendant and dated 6 November 2020, there is, at paragraphs 48 – 57, an analysis of the basis for the Defendant's jurisdiction challenge here, and of how it overlaps with the issues which were then before the Dutch SC.
(2) In Henshaw J's judgment the extent of the overlap is recognised at paragraphs 45-50. As is said in paragraph 50, the first two of the Defendant's grounds in its Jurisdiction Application are the same as Grounds 2 and 3 in the cassation appeal. The third ground, as Henshaw J put it, 'overlapped' with Ground 5 in the cassation appeal. In fact, as I have set out, when the unappealed decision of The Hague Court of Appeal in relation to Article 21 is also taken into account, it can be seen that the Defendant's third point in its Jurisdiction Application has been the subject of a determination by the Dutch courts.
(3) An important part of Henshaw J's reasoning as to why the stay should not be lifted was the concern that, if the English proceedings were allowed to proceed, the Defendant might be unable to present to the English court its full case on state immunity, because it could be said to be bound by the decision of The Hague Court of Appeal, notwithstanding that that decision might itself later be reversed by the Dutch SC (see para. 213(ix)). The position in relation to this has now changed.
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