Much has been written about the claims brought by the majority shareholders of Yukos. Three shareholder companies, namely Hulley Enterprises Limited, Veteran Petroleum Limited and Yukos Universal Limited initiated arbitrations against Russia on 3 February 2005. These three sets of proceedings were heard by a single Tribunal leading to a decision in favour of the majority shareholders to the tune of US$50 billion, which is the highest known level of damages ever awarded in an arbitration. This has attracted a great deal of attention from both legal and lay commentators.
The award was far from the end of the matter. Russia has sought to challenge the award at the seat of arbitration, The Hague. Ruling on the challenge, on 20 April 2016 The Hague District Court annulled the Tribunal’s award against Russia, holding that there had not been a valid arbitration agreement. An appeal is ongoing. Meanwhile, the former majority shareholders in Yukos have been seeking to enforce the award against Russian assets in a multitude of jurisdictions around the world. A number of those enforcement attempts are taking place against assets located in France.
On 24 November 2016 the Paris Court of Appeal lifted attachments obtained by one of the former majority shareholders against assets owned by three entities: the Russian Satellite Communications Company, real estate developer Goszagransobstvennost and RIA Novosti which are all “federal state unitary enterprises” of Russia. Russia argued that the state enterprises were not managed directly by the Russian state and could not be used to satisfy the award made against it. Russia also argued that the attachments were obsolete in light of the annulment of the arbitration award by the District Court in the Hague. This latter argument was not addressed by the Paris Appeal Court, which instead lifted the attachments on the basis that such an attachment may only be made against a third party who has a direct personal debt towards the judgment debtor. A dozen other attachments relating to the Yukos award remain in place in France.
This is the latest instalment in the long-running Yukos saga and illustrates the importance of locating assets belonging to the counterparty, against which an award can be enforced.
For further information, please contact Claire Stockford or Ben Wells.