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ECT and the Yukos case
LATE last year, various newspapers claimed Yukos' shareholders were to sue the Russian government under the Energy Charter Treaty (ECT) for the dismantling of their company to pay for alleged back-taxes. That led to a polarised debate over how successful such an attempt would be. The question deserves accurate legal analysis and might keep lawyers busy for a long time, writes Andrei Konoplyanik
ONE GROUP claimed victory for Yukos' shareholders was assured – Russia signed the ECT and under the Treaty's provision, the country would be liable for most, if not all, of Yukos' claim of between $28bn and $33bn. This camp, however, remained silent on the question of whether the fact that Russia has not yet ratified the Treaty would preclude the use of ECT's dispute-resolution mechanisms. The other group said it would. Russia may have signed ECT, but it has not ratified it. Therefore, no ECT rules are applicable in Russia and it does not run the risk of international arbitration. Moreover, this group argued, Moscow should avoid ratifying ECT to prevent other investors from taking legal action against the country. ECT and dispute resolution
The ECT contains several international dispute-resolution mechanisms. The two main procedures for dispute settlement through arbitration include ...Click here to continue reading ECT and the Yukos case
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