The largest arbitration award in history, totalling some US$ 50 billion in favour of the former majority shareholders in the Russian oil company Yukos, has been set aside by the Hague District Court. The basis of the court’s decision was that Russia, the Respondent in the arbitration, had never ratified the Energy Charter Treaty under which the claims had been brought. This was despite the fact that Russia had signed the Treaty in 1994, but the court held that this meant only that Russia was only bound by those provisions of the Treaty which were compatible with Russian law. Here, as the matters in issue were matters of public law, they could not be referred to arbitration and thus the arbitral tribunal lacked jurisdiction.
The Claimants have said they will appeal, so this is by no means the end of the case. This promises to be a long running saga given the huge amounts at stake.