Monster Corporate Sovereignty Ruling Against Russia Overturned By Dutch Court, But It's Hard To Tell Whether It's Over Yet
from the plus-or-minus-$50-billion dept
By now, the theoretical risks of including corporate sovereignty chapters in TPP and TAFTA/TPP are becoming more widely known. But as Techdirt wrote back in 2014, there's already a good example of just how bad the reality can be, in the form of the monster-sized case involving Russia. An investor-state dispute settlement (ISDS) tribunal ruled that Vladimir Putin really ought to pay $50 billion to people who were majority shareholders in the Yukos Oil Company. The Russian government didn't agree, and so naturally took further legal action to get the ruling overturned. As The New York Times reports, it seems to have succeeded:
In a major victory for the Russian government, a Dutch court on Wednesday overturned an award of more than $50 billion to former shareholders of the defunct oil company Yukos that Moscow was ordered to pay in 2014.
The award was thrown out because of something mentioned in the earlier Techdirt article: the fact that the claim was brought under the Energy Charter Treaty, which Russia signed, but never ratified. Because the ISDS arbitration panel had met in The Hague, in the Netherlands, Russia took its case before Dutch judges, who agreed that Vlad need not pay in these circumstances.
But the ruling is unlikely to signal the end of this case -- after all, some pretty serious sums of money are involved. According to The New York Times, the international arbitration practice representing the Yukos shareholders intends to make an appeal to higher courts in the Netherlands against the decision. And even if it fails to get the latest court ruling overturned, it's still quite possible that GML, the company that controlled a majority of the Yukos shares, will be able to collect its $50 billion elsewhere. As the NYT says:
GML is pursuing legal efforts to collect the Russian money in a half-dozen other countries: Belgium, Britain, France, Germany, India and the United States. There have not yet been rulings in those cases, and it was not immediately clear on Wednesday how the decision in The Hague might affect them.
That lack of legal clarity underlines one of the worst aspects of ISDS: the fact that it does not sit neatly within traditional legal systems, but in many ways lies outside them. Far from helping to uphold the law, as supporters of corporate sovereignty like to claim, it makes it arbitrary and unpredictable. When you're talking plus or minus $50 billion, that's a pretty serious flaw.
Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: corporate sovereignty, courts, isds, netherlands, russia
Companies: yukos
Reader Comments
Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
If you win in all six, wouldn't that mean the person or group you sued gets punished six times for a single offense?
Do none of these countries have double (sextuple) jeopardy laws?
[ link to this | view in chronology ]
Bank Dog Food (TPP)
[ link to this | view in chronology ]
Re: Bank Dog Food (TPP)
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
Thank you very much for that ; )
[ link to this | view in chronology ]
It can get worse
Because it is clear that, in fact, the Russian government will never pay the 50 Billion the Yukos shareholders have made an attempt to recover the money from anyone in Belgium who has any link to the Russian state - however tenuous that might be.
For example the local branch of the Russian Orthodox Church, whose assets have been accumulated by donations from local people - mostly Belgian nationals with Russian ancestry- has been included on a list of organisations from which the shareholders could recover money.
http://www.interfax-religion.com/?act=news&div=12131
[ link to this | view in chronology ]
Re: It can get worse
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Vlad does not have to pay... for now
[ link to this | view in chronology ]
Re: Vlad does not have to pay... for now
Those shareholders themselves took it from the Russian state when that drunk Yeltsin was in charge.
If you steal my wallet and I take it back who's the thief?
[ link to this | view in chronology ]