The Yukos cases and the provisional application of the Energy Charter Treaty

Abstract

At the centre of the controversy surrounding the reversal of awards in the Yukos cases is the provisional application laid down in Article 45 of the Energy Charter Treaty (ECT), which allows a signatory to unilaterally undertake to give affirmative legal effect to the obligations under the ECT on a voluntary and provisional basis. The paper examines the two disparate approaches adopted by the Arbitral Tribunal and the Hague District Court in interpreting the provisional application, namely the ‘all-or-nothing’ approach which necessitates an analysis and determination of whether the principle of provisional application per se is inconsistent with national laws of a signatory and the ‘piecemeal’ approach that requires provisional application to be dependable on the consistency of each provision of the ECT with national laws. The paper further scrutinises the effect that should be given to the provisional application of the ECT and maintains that the controversy has the potential to generate intricate tensions between the finality and rectification of arbitral awards and between international arbitral autonomy and judicial scrutiny instrument, and will have a conclusive impact on the fate of the petition of the Russian Federation.