Yukos Capital Limited v The Russian Federation

Abstract

In 2013, Yukos Capital Ltd. (Yukos Capital, formerly Yukos Capital Sàrl), a company incorporated in Luxembourg, brought claims of expropriation and breach of the fair and equitable treatment (FET) standard under the Energy Charter Treaty (ECT) against the Russian Federation (Russia). Russia objected to the arbitral tribunal’s jurisdiction on several grounds. The arbitral tribunal dismissed Russia’s objections in an interim award dated 18 January 2017 and a final award dated 23 July 2021. Russia subsequently challenged the final award as well as the interim award before the Swiss Federal Supreme Court (Supreme Court) on the grounds that the arbitral tribunal had wrongly upheld its jurisdiction and that the final award was incompatible with public policy. In its decision 4A_492/2021 dated 24 August 2022 (DFSC 4A_492/2021), the Supreme Court, having exclusive jurisdiction to hear the application for the setting aside of the two awards, rejected Russia’s application. This contribution discusses the key issues that arose before the Supreme Court resulting from Russia’s challenge of the arbitral award.