On 28 July 2014, the Permanent Court of Arbitration has published awards from three cases involving former shareholders of OAO Yukos Oil Company (Yukos) and the Russian Federation.
The cases, which commenced in 2005 under the Energy Charter Treaty of 1994, were heard together before the same arbitral tribunals composed of The Hon. L. Yves Fortier PC CC OQ QC (Canada – Chairman), Dr. Charles Poncet (Switzerland) and Judge Stephen M. Schwebel (USA).
The arbitral tribunal has found that the action taken by the Russian Federation amounted to an expropriation of shareholders’ investments in Yukos in breach of Article 13(1) of the Energy Charter Treaty.
The tribunal granted over USD 50 bn to the claimants, which constitutes the highest award ever in the history of investment arbitration.
The awards in the Yukos case prove the value and the benefits of ISDS for investors whose investments have been damaged by measures inconsistent with the international legal obligations and who were unable to pursue their rights before the courts of the host State.
The award also proves that ISDS proceedings provide the only available relief for investors against countries which act unpredictable and violate their international obligations. It is these kind of awards that underline the continued importance of independent, impartial and effective dispute settlement.
Finally, the award shows the expertise of the arbitral tribunal in its extensive analysis of more than 600 pages, which illustrates that investment arbitral tribunals can deliver judicial decisions of the highest quality.
A great day for the Rule of Law.
The awards are available on the website of the Permanent Court of Arbitration.