Summary

Vernietigingsprocedure. Arbitrale uitspraken gedaan naar aanleiding van gebeurtenissen op de Krim in 2014 op grond van een bilateraal investeringsverdrag gesloten tussen Oekraïne en de Russische Federatie.

NJSC Naftogaz of Ukraine (Ukraine) et al. v. The Russian Federation PCA Case No. 2017-16

"The notice of initiation on the basis of Article 9 of the Agreement Between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments dated 27 November 1998 (hereinafter - Agreement) of the international arbitration proceedings at the Permanent Court of Arbitration (the Hague) with respect to the claim filed by the NJSC "Naftogaz Of Ukraine", PSC "State Joint Stock Company Chornomornaftogaz", PJSC "Ukrtransgaz", PJSC "Ukrgasvydobuvannya", PJSC "Ukrtransnafta", SC "Gaz Ukrainy" and SC "Likvo" is hereby returned.

The present claim obviously cannot be heard under the Agreement, and consequently, the Agreement cannot serve as a basis to form an arbitration to resolve the dispute.

According to item 1 of Article 1 of the Agreement the term "investments" shall mean any kind of tangible and intangible assets which are invested by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with its legislation. The property, which is the subject of the dispute, is located in Republic of Crimea and the city of Sevastopol, which had previously been a part of Ukraine. The assets of claimants are not investments, because they have not been made in the territory of the Russian Federation, and, if ever made, they have been made prior to the accession of the Republic of Crimea and the city of Sevastopol to the Russian Federation and not in accordance with the legislation of the Russian Federation. No taxes have been collected on these assets in accordance with the legislation of the Russian Federation and they have not contributed to the economic development of the Russian Federation.

On the basis of the foregoing, the Russian Federation does not recognize the jurisdiction of the international arbitration at the Permanent Court of Arbitration to hear the present dispute.

Attachment: on 54 pages in a single copy"

... Partial Award. ..

"For the reasons set out above, the Tribunal by majority rules:

(a) that the Tribunal has jurisdiction over the claims

(b) that the Claimants have established a violation of Article 5 (expropriation) and Article 2(1) (full and unconditional legal protection) and Article 3(1) (most favored nation treatment) of the BIT.

The Tribunal will therefore proceed to the quantum phase of the arbitration."

"§161. The jurisdiction of the Tribunal rests on a treaty to which both Russia and Ukraine are parties. As the Belbek tribunal pointed out, "the juridical space" occupied by the BIT has not been modified by annexation or otherwise since the BIT was concluded on 27 November 1998. The facts required to establish jurisdiction under the BIT do not turn on the legality or illegality of encroachments by one Contracting Party on the territory of the other. In the view of this Tribunal's majority, the plain terms of the BIT can be applied in their ordinary meaning to the situation in Crimea and Sevastopol at the relevant dates without resolving legal issues such as sovereignty extraneous to those stipulated by the Contracting Parties such as the legality or illegality of Russian's military intervention and subsequent constitutional absorption of Crimea into the Russian Federation.

§172. Article 31(1) of the VCLT [het WVV, toevoeging hof] directs that the Treaty "be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose. In the majority view, the "ordinary meaning to be given to the terms" should not be cut down or diluted by importing the concept of "lawful"

of "sovereignty" where the parties have chosen to use the word "territory" without any such limitation. On this point the Tribunal notes the submission of Ukraine that:

Many of Ukraine's bilateral investment treaties do specifically define territory with reference to "sovereignty", but Ukraine deferred to Russia's preferred practice of leaving references to territory open-ended. A restrictive definition should not be imposed where the parties to an investment treaty could have chosen to adopt one, but did not.

The Tribunal majority agrees. If the Contracting Parties had intended to specify "sovereign"

territory they would have said so."

... Procedural Order no. 8. ..

"The Tribunal specifically noted in paragraph 175 of the Partial Award that "[t]he Treaty itself is not without temporal limitations. Article 12 restricts protection to investments made `on or after January 1, 1992'." Accordingly, subject matter jurisdiction was affirmed only in respect of investments made after that date. The quantification phase will only deal with investments made after that date."

...