Russia / 27 October 2010 / Russia, Федеральный арбитражный суд Западно-Сибирского округа (Federal Arbitrazh Court for the West-Siberian District) / Yukos Capital SARL v Tomskneft VNK / A67-1438/2010
| Country | Russia |
| Court | Russia, Федеральный арбитражный суд Западно-Сибирского округа (Federal Arbitrazh Court for the West-Siberian District) |
| Date | 27 October 2010 |
| Parties | Yukos Capital SARL v Tomskneft VNK |
| Case number | A67-1438/2010 |
| Applicable NYC Provisions | V | V(1)(b) | V(2)(b) |
| Source |
http://kad.arbitr.ru (register of decisions of the RF arbitrazh courts) |
| Languages | English |
| Summary | On 12 February 2007, a sole arbitrator sitting in Paris rendered an award pursuant to the arbitration rules of the International Chamber of Commerce, ordering Russian company OAO Tomskneft VNK (“Tomskneft”) to pay Luxemburg company Yukos Capital SARL (“Yukos Capital”) various amounts due under loan agreements entered into in 2004 (the “Loan Agreements”). Yukos Capital sought the recognition and enforcement of the award in Russia. The Arbitrazh Court of the Tomsk Region (court of first instance) rejected the application for recognition and enforcement on two grounds. First, it ruled that Tomskneft had not been duly notified of the arbitration proceedings and was therefore not given the opportunity to present its case. Second, it found that recognising and enforcing the award would violate the public policy of the Russian Federation. The court held that the Loan Agreements were concluded between group companies and concealed the return to Tomskneft of funds which were unlawfully withdrawn from it in favour of Yukos Capital by way of transfer pricing. Yukos Capital filed a cassation complaint with the Federal Arbitrazh Court for the West-Siberian District (court of cassation). The Federal Arbitrazh Court for the West-Siberian District upheld the ruling of the court of first instance and refused to recognise and enforce the award. Referring to Article V(1)(b) NYC, the court of cassation held that the court of first instance rightly found that Tomskneft had not been duly notified of the arbitration proceedings and therefore had not been able to present its defence. Furthermore, referring to Article V(2)(b) NYC, the court of cassation held that the funds transferred within the group were not genuine loans, but concealed a scheme intended to prevent the seizure of OAO NK YUKOS’s assets by the Russian State. The recognition and enforcement of an arbitral award rendered on the basis of the Loan Agreements would therefore violate the foundations of the constitutional and legal order of the Russian Federation and would thus be contrary to the public policy of the Russian Federation. |
Attachment (2)
 Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |
