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Yukos Capital v. Russia, Claimant’s Counter-Memorial on Jurisdiction, November 3, 2014

3 Nov 2014
Yukos Capital Limited (formerly Yukos Capital SARL) v. Russian Federation, UNCITRAL (Geneva Tribunal), PCA Case No. 2013-31
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Claimant’s Counter-Memorial on Jurisdiction
Document Details:
LISTED PARTICIPANTS
Claimant’s Counter-Memorial on Jurisdiction
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
J. William Rowley
Respondent appointee
Brigitte Stern
Tribunal/Panel chair
Campbell A. McLachlan
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Cyrus Benson III, Penny Madden, Gail Elman, Ceyda Knoebel
Claimant's law firm
Respondent's counsel
Respondent's law firm
Other counsel
Claimant's expert
Stuart Gleichenhaus, Paul B. Stephan, Willems
Claimant's expert firm
Respondent's expert
Anton V. Asoskov
Respondent's expert firm
Claimant's witness
Bruce Kelvern Misamore
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Third-party funder
Entities
Yukos Capital Limited, Gibson Dunn & Crutcher, FTI Consulting, Russia
Country
Print reporter
Document Summary
Claimant’s Counter-Memorial on Jurisdiction
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is the Claimant’s Counter-Memorial on Jurisdiction submitted in the arbitration between Yukos Capital S.à.r.l. and the Russian Federation (PCA Case No. 2013-31), conducted pursuant to the 1976 UNCITRAL Arbitration Rules and the Energy Charter Treaty (ECT). The submission responds to the Respondent’s Memorial on Jurisdiction, urging the Tribunal to dismiss all jurisdictional objections and proceed to the merits phase.

Provisional Application of the ECT

The Claimant addresses the Respondent’s argument that it did not provisionally apply the dispute resolution provisions of Article 26 ECT because they are allegedly inconsistent with Russian law. The Claimant asserts that Article 45(1) ECT mandates the provisional application of the Treaty as a whole, rejecting the Respondent’s "piecemeal" interpretation. Relying on the Vienna Convention on the Law of Treaties (VCLT) and prior ECT jurisprudence, including the Hulley Enterprises and Veteran Petroleum awards, the Claimant argues that international treaties provisionally applied by the Russian Federation become part of its domestic legal system and take priority over conflicting domestic laws. Consequently, the Claimant maintains that Article 26 ECT is not inconsistent with Russian law.

Definition of Investment

The Claimant rebuts the Respondent’s contention that the US$ 3.2 billion in intercompany loans made to Yukos Oil Company do not constitute "Investments" under Article 1(6) ECT. The Claimant emphasizes that the ECT’s definition of investment is broad and expressly includes "every kind of asset" and "debt of a company or business enterprise." The Claimant rejects the Respondent’s attempt to import the Salini test from ICSID jurisprudence, arguing that the objective criteria of the ECT alone govern the tribunal's rationae materiae jurisdiction. Furthermore, the Claimant dismisses the Respondent’s characterization of the loans as disguised dividends, relying on expert evidence to demonstrate that the transactions possessed all commercial characteristics of valid, enforceable debt instruments associated with economic activity in the energy sector.

Denial of Benefits

Finally, the Claimant contests the Respondent’s invocation of the denial of benefits clause under Article 17(1) ECT. The Claimant argues that Article 17(1) applies exclusively to the substantive protections of Part III of the ECT and cannot serve as a basis to deny the procedural right to arbitrate under Part V (Article 26). Moreover, the Claimant asserts that the right to deny benefits must be exercised positively and prospectively, noting that the Respondent failed to invoke this right until April 2014, well after the dispute crystallized. Substantively, the Claimant contends that it maintains substantial business activities in Luxembourg, its state of incorporation, and is controlled by a Dutch foundation (Yukos Stichting) rather than nationals of a third state, thereby failing to meet the cumulative requirements for a valid denial of benefits.