Former majority shareholders won on all substantive grounds of Russia’s appeal to the Dutch Supreme Court

The former Yukos majority shareholders won on all substantive grounds of Russia’s appeal to the Dutch Supreme Court. However, 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. Tim Osborne, Chief Executive of GML, the holding company of the former Yukos majority shareholders, said: “We will study the Supreme Court ruling, but are confident that the Court of Appeal in Amsterdam will dismiss the baseless allegations raised by the Russian Federation, and the Arbitral Awards will be upheld.” In 2014, an independent international Arbitral Tribunal in The Hague ruled unanimously that the Russian state unlawfully expropriated Yukos Oil, the country’s most successful company and largest taxpayer. The Tribunal found that “Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a state-controlled company [Rosneft] and incarcerate a man [Mikhail Khodorkovsky] who gave signs of becoming a political competitor.” In February 2020, The Hague Court of Appeal reinstated the Arbitral Awards, overturning a 2016 decision of The Hague District Court to set them aside. The Court of Appeal found that the Arbitral Tribunal had jurisdiction to hear the shareholders’ claims since the Russian Federation, whilst it had signed but not ratified the Energy Charter Treaty (ECT), had provisionally applied the ECT, including its provisions regarding dispute resolution. The Court of Appeal dismissed the Russian Federation’s other grounds for setting aside the Arbitral Awards.