Hulley Enterprises, Ltd. (Cyprus), Yukos Universal Limited (Isle of Man), and Veteran Petroleum Limited (Cyprus) v. The Russian Federation
Ad hoc (UNCITRAL; administered by the Permanent Court of Arbitration), The Hague
Stakes: Over $50 billion
Largest arbitration ever. The majority shareholders of Yukos Oil Company, affiliated with Group Menatep Ltd., argue that Russia expropriated Yukos assets by driving the company into bankruptcy through bogus tax claims in a vendetta against founder Mikhail Khodorkovsky. Their cases were brought under the Energy Charter Treaty, a multilateral convention on trade and investment that is unratified by Russia, but contains a provisional application clause. Russia disputes that it is bound by the ECT and contests claimants’ standing. Although originally valued at $33 billion, the three claims are worth more than $50 billion based upon the valuation implied for the production unit that was Yukos’ main asset, Yuganskneftegas, when its current owner, Rosneft Oil Company, went public in 2006. Hearings on jurisdiction set for June 2007.
Claimants’ Counsel: Emmanuel Gaillard, Yas Banifatemi, and Philippe Pinsolle of Shearman & Sterling in Paris
Respondents’ Counsel: Robert Greig and Claudia Annacker of Cleary Gottlieb Steen & Hamilton in Paris
Arbitrators: L. Yves Fortier, QC, of Ogilvy Renault in Montreal (president); Stephen Schwebel of Washington, D.C.; Daniel Price of Sidley Austin in Washington, D.C.
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