Judgment in Yukos v Russia enforcement application

4 May, 2021

The Commercial Court (Henshaw J) has given judgment in relation to the case of (1) Hulley Enterprises Limited, (2) Yukos Universal Limited, (3) Veteran Petroleum Limited v The Russian Federation [2021] EWHC 894.

These proceedings concern the Claimants’ efforts to enforce in England high-profile arbitral awards handed down in 2014, in which the tribunal found that Russia had unlawfully expropriated the Claimants’ assets and ordered Russia to pay the Claimants approximately $50 billion in compensation (“the Awards”). The Awards are believed to be the largest arbitral awards in history.

The English enforcement proceedings were stayed in 2016 following a decision of the District Court of The Hague (the seat of the arbitration) to set aside the Awards. In 2020, the Awards were reinstated by the Court of Appeal of The Hague. Following the Court of Appeal’s judgment, the Claimants applied for the stay in England to be lifted, or alternatively to be maintained only if Russia provided appropriate security.

Henshaw J declined to lift the stay, finding that it should be maintained until Russia’s cassation appeal to the Supreme Court of the Netherlands is finally resolved. He also declined to order Russia to pay security, holding that the Court lacked the power to order security against a State with an outstanding claim to State immunity.

The Claimants were represented by Jonathan Crow QC, Paul McGrath QC, Alison Macdonald QC, David Peters and Naomi Hart, instructed by Ros Prince and Priya Grigoriadis of Stephenson Harwood.