Procedural Posture

This Procedural Order addresses applications filed by the Respondent, the Russian Federation, following the Tribunal's issuance of a Partial Award on jurisdiction and liability. Having previously declined to participate in the proceedings, the Respondent formally appeared and requested that the Tribunal reconsider its jurisdictional findings, stay the arbitration pending set-aside proceedings before the Dutch courts, and grant an extension of time to file its Counter-Memorial on Quantum.

Tribunal's Analysis on Jurisdiction

The Tribunal evaluated its authority under the UNCITRAL Rules to reopen the jurisdictional phase. The Respondent argued that under mandatory Dutch law, the Partial Award constituted an interim award lacking res judicata effect, thereby obligating the Tribunal to reconsider its jurisdiction. The Claimants maintained that the Partial Award was final and binding. The Tribunal determined that while Article 15(2) of the UNCITRAL Rules grants broad procedural discretion to conduct the arbitration, it firmly declined to exercise any such discretion to reopen the jurisdictional phase. The Tribunal emphasized that the Respondent had been repeatedly invited to participate in the jurisdictional hearings but had declined to do so, and had presented no change in circumstances justifying a rehearing of issues already comprehensively canvassed in the Partial Award.

Decision on Procedural Timetable

Regarding the quantum phase, the Tribunal granted a modified extension for the Respondent's Counter-Memorial on Quantum. Balancing the Respondent's need for adequate preparation time against the potential disruption to the Claimants' schedule, the Tribunal established a revised procedural calendar. The Tribunal directed the Respondent to file its Counter-Memorial by 6 December 2019, with subsequent rounds of submissions scheduled to ensure the preservation of the May 2020 hearing dates.

Procedural Background

Procedural Order No. 21 addresses an application by the Respondent, the Russian Federation, to reopen the jurisdictional phase of the arbitration. Following the Tribunal’s issuance of a Partial Award on jurisdiction and liability, the Hague Court of Appeal rendered a judgment partially setting aside that Partial Award. Relying on this judgment, the Respondent requested that the Tribunal suspend the ongoing quantum phase, reopen the jurisdictional proceedings, and issue a new award on jurisdiction.

Parties' Positions

The Respondent argued that the Hague Court of Appeal’s judgment effectively annulled the Tribunal’s general declaration of jurisdiction. Invoking Article 1065(1)(a) of the Dutch Code of Civil Procedure, the Respondent contended that the Tribunal was obligated to assess jurisdiction afresh, specifically regarding the temporal limitations of Article 12 of the applicable bilateral investment treaty (BIT), which restricts protection to investments made on or after January 1, 1992.

The Claimants opposed the application, asserting that the Hague Court of Appeal merely took a cautious approach to clarify that the Tribunal's jurisdiction did not extend to pre-1992 investments—a limitation the Tribunal had already explicitly recognized in Procedural Order No. 8. The Claimants further submitted expert legal evidence indicating that under Dutch law, a setting-aside court renders a final de novo decision on jurisdiction, thereby precluding the Tribunal from revisiting the issue.

Tribunal's Analysis

The Tribunal majority rejected the Respondent’s interpretation of the Hague Court of Appeal’s judgment. The Tribunal observed that the partial set-aside was explicitly limited to ensuring certainty that jurisdiction did not encompass pre-1992 investments. The Tribunal emphasized that it had already acknowledged this temporal limitation in Procedural Order No. 8, a fact previously conceded by the Respondent in its own pleadings. Consequently, the Tribunal concluded that the Dutch court did not invalidate its authority to adjudicate claims concerning post-1992 investments or to proceed with the quantum phase. Furthermore, relying on the Claimants' uncontroverted expert evidence on Dutch civil procedure, the Tribunal found it lacked the authority to conduct a further jurisdictional hearing.

In a concurring opinion, Professor Maja Stanivuković agreed that reopening the jurisdictional phase was unnecessary and that the temporal eligibility of specific investments could be efficiently determined during the quantum phase. However, she disagreed with the majority’s characterization that the Partial Award had fully disposed of the Article 12 jurisdictional objections, noting that the factual determination of when specific investments were made remained an unresolved jurisdictional issue properly deferred to the final award.

Decision

The Tribunal dismissed the Russian Federation’s application for a re-hearing of its jurisdictional objections. The dismissal was issued without prejudice to the Respondent’s right to address the impact of the Article 12 temporal limitations during the Tribunal's determination of the proper quantum of compensation.

Procedural Background

This document is a decision issued by the Helsinki District Court (Finland) granting an application for provisional measures (attachment) filed by National Joint Stock Company Naftogaz of Ukraine and several affiliated entities against the Russian Federation. The applicants sought to secure assets pending the enforcement of the final arbitral award rendered on April 12, 2023, in PCA Case No. 2017-16, which ordered the Russian Federation to pay over USD 4.22 billion in compensation for the unlawful expropriation of investments in Crimea.

Parties' Positions and Jurisdictional Issues

The Russian Federation opposed the application, arguing that the enforcement of the arbitral award should be stayed pending the outcome of ongoing set-aside proceedings before the Dutch courts. Furthermore, the respondent invoked state immunity under customary international law, asserting that provisional measures could not be directed against sovereign property and must be strictly limited to assets used for commercial purposes. The applicants maintained that the arbitral award constituted a valid and binding debt, and that the respondent's persistent refusal to comply with the award demonstrated a clear risk of asset dissipation.

Court's Analysis and Decision

The Court determined that the applicants had established a prima facie claim based on the binding PCA award, noting that the existence of parallel annulment proceedings in the Netherlands did not preclude the granting of provisional measures. Addressing the risk of dissipation, the Court found that given the substantial quantum of the award and the respondent's conduct, the risk of the respondent concealing or transferring assets could not be deemed improbable.

On the issue of state immunity, the Court acknowledged the principles codified in the UN Convention on Jurisdictional Immunities of States and Their Property, which generally prohibit execution against state property unless it is used for commercial purposes. However, the Court ruled that it was not required to delineate or restrict the attachment order to specific commercial assets at this preliminary stage. The Court held that the determination of whether specific seized assets are immune from execution falls within the exclusive competence of the enforcement authority (the bailiff) during the actual execution of the attachment. Consequently, the Court ordered the attachment of the Russian Federation's movable and immovable property in Finland up to the full value of the arbitral award, including accrued interest and costs.