The Amsterdam Court of Appeals decided to recognize and enforce an arbitration decision awarding 13 bln rubles (cr. $400 mln) to Luxembourg-based Yukos Capital S.a.r.l. in its suit against a state-run Russian oil company, Rosneft. The award had been made by a Russian arbitration tribunal, but later had been annulled by a Russian court. Nevertheless, the Dutch court found the arbitral award valid and enforceable.
Yukos is formerly a major Russian oil company, headed by Mikhail Khodorkovsky, and brought to bankruptcy by tax claims. Yukos Capital S.a.r.l. is a Luxembourg company affiliated with former Yukos shareholders and managers. In 2004 Yukos Capital S.a.r.l. granted a loan to Yuganskneftegaz, then a subsidiary of Yukos, with an apparent idea to save the sinking Yukos empire (the attempt failed). Later state-run Rosneft acquired Yukos assets, including Yuganskneftegaz, during Yukos bankruptcy proceedings. Rosneft became Yuganskneftegaz’ legal successor and refused to repay the loan to Yukos Capital S.a.r.l.
Yukos Capital S.a.r.l. sued Rosneft in the International Commercial Arbitration Court in Moscow (MKAS) under the arbitration clause of the loan agreement. In 2006 MKAS held for Yukos Capital S.a.r.l. However, the Arbitrazh (Economic) Court of the City of Moscow annulled the arbitral decision, with the judgment being further affirmed by higher Russian courts. The stated rationale of holding the award invalid was that the impartiality of one of the arbiters had been “disputed.” The matter was that the arbiter had participated in a commercial seminar that had been organized by a law firm representing Yukos Capital S.a.r.l. In the Amsterdam court Yukos Capital S.a.r.l. argued that the Russian court that annulled the award had not been itself impartial.
Apparently, the latter argument appeared to be convincing for Dutch judges. Now Yukos Capital S.a.r.l. can seize any assets of Rosneft it might find in the Netherlands. In fact, Rosneft has several affiliated companies in the Netherlands, but their assets are mainly in Russia.
Russia is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Accordingly, decisions of Russian arbitration tribunals, including MKAS, are potentially enforceable in more than 140 countries of the world.
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 Moscow Circuit Federal Arbitrazh Court, Case No.KG-A40/6616-07, judgment of 26 July 2007, 13 August 2007 (affirming lower court), review denied by Supreme Arbitrazh Court, Case No.14956/07, decision of 10 December 2007.