Procedural Posture and Purpose

This document constitutes the Claimant's Rejoinder on Jurisdiction in the UNCITRAL arbitration proceedings between the Claimant and the Russian Federation. Submitted on 15 June 2015, the pleading responds to the Respondent's Reply on Jurisdiction and further substantiates the Claimant's arguments affirming the Tribunal's jurisdiction under the Energy Charter Treaty (ECT).

Provisional Application of the Energy Charter Treaty

The Claimant addresses the Respondent's contention that it did not provisionally apply the dispute resolution provisions of Article 26 of the ECT. The Claimant argues that the Respondent accepted the obligation to provisionally apply the ECT in its entirety upon signature, pursuant to Article 45(1). The pleading asserts that the piecemeal approach to provisional application advocated by the Respondent is contrary to the treaty's text, object, and purpose, as well as established international legal principles and state practice. Furthermore, the Claimant maintains that even if a limitation clause applied, the arbitration of investment disputes under Article 26 is not inconsistent with Russian domestic law.

Definition of Investment under Article 1(6)

The Rejoinder vigorously contests the Respondent's characterization of the intra-group loans at issue as dividends rather than protected investments. The Claimant emphasizes that the loans constitute "debt of a company" under the plain language of Article 1(6) of the ECT. Relying on expert accounting and legal testimony, the Claimant refutes the application of the "substance over form" doctrine to recharacterize the debt instruments. Additionally, the Claimant rejects the importation of the Salini criteria or any "inherent meaning" test into the ECT's broad definition of investment, arguing that the loans would satisfy such criteria regardless.

Denial of Benefits under Article 17(1)

Finally, the Claimant rebuts the Respondent's invocation of the denial of benefits clause under Article 17(1) of the ECT. The pleading argues that the right to deny benefits must be positively exercised and can only have prospective effect, thereby not depriving the Tribunal of jurisdiction over a pre-existing dispute. The Claimant further demonstrates that it maintains substantial business activities in Luxembourg, its state of incorporation, and is not controlled by nationals of a third state, rendering the substantive requirements for a denial of benefits unsatisfied.

Request for Relief

The Claimant concludes by requesting that the Tribunal dismiss the jurisdictional objections raised by the Respondent in their entirety and proceed to the merits phase of the arbitral proceedings.