Summary

Introduction

On 20 May 2024, a judge in the General Division of the High Court made an ex parte order pursuant to s 29 of the International Arbitration Act 1994 (2020 Rev Ed) (the "IAA") and O 48 r 6(2) of the Rules of Court 2021 (the "Leave Order"), granting leave to each of the claimants - Hulley Enterprises Ltd ("Hulley"), Yukos Universal Ltd ("Yukos Universal"), and Veteran Petroleum Ltd ("Veteran") (together, the "Claimants") - to enforce a final arbitral award in its favour and against the defendant (the "Russian Federation"). The three final awards (the "Final Awards") had been delivered on 18 July 2014, in arbitrations administered by the Permanent Court of Arbitration and heard together by the same three-member tribunal (the "Tribunal"). The Claimants were awarded significant damages (Hulley was awarded US$39,971,834,360; Yukos Universal was awarded US$1,846,000,687; and Veteran was awarded US$8,203,032,751) on which compound interest continues to accrue.

The Russian Federation presently seeks to set aside the Leave Order on the sole ground that it is immune from the jurisdiction of the Singapore courts pursuant to s 3(1) of the State Immunity Act 1979 (2020 Rev Ed) (the "SIA"). The immunity conferred by s 3(1) is subject to the exceptions from immunity which follow in ss 4-13 of the SIA. The Russian Federation's position is that the "Arbitrations" exception in s 11 of the SIA does not apply as it had not "agreed in writing to submit" the relevant dispute with the Claimants to arbitration. It contends, and has contended from the outset, that the Tribunal lacked jurisdiction to issue the Final Awards. It relies on four arguments made to one or more of the Tribunal and the Dutch Courts (consisting of the District Court of The Hague, The Hague Court of Appeal, and the Supreme Court of the Netherlands), in proceedings to set aside those awards and three interim awards, The Hague being the seat of each arbitration. Those arguments are conveniently referred to as the "Article 45 Argument", the "Investor/Investment Argument", the "Article 21 Purported Jurisdiction Argument" and the "Article 21 Mandate Argument", and are explained in more detail at [37]-[45] below.

The underlying arbitration proceedings were commenced in 2004, the Claimants relying upon the provisional application of the arbitration mechanism in Art 26 of the multilateral Energy Charter Treaty (17 December 1994), 2080 UNTS 95 (entered into force 16 April 1998) (the "ECT" or the "Treaty"). The Claimants were, directly or indirectly, the majority shareholders in OAO Yukos Oil Company ("Yukos Oil") from 1999 until its liquidation in 2007. Yukos Oil was a major oil producer in Russia. The Claimants sought compensation from the Russian Federation for breaches of Art 13 of the ECT, alleging that the Federation had expropriated and failed to protect their investments in Yukos Oil . In three interim awards given on 30 November 2009 (the "Interim Awards"), the Tribunal rejected a number of the Federation's preliminary defences to those claims, including defences relating to the Tribunal's jurisdiction. In its Final Awards, the Tribunal rejected the Russian Federation's remaining jurisdictional and substantive defences and found that the Russian Federation had, as neatly summarised by the Supreme Court of the Netherlands in its decision of 5 November 2021 (at para 3.1):

... instigated a number of taxation and enforcement measures against Yukos seeking to bring about its bankruptcy with the sole aims of eliminating Mr Khodorkovsky (the Chairman of Yukos Oil and one of its shareholders) as a potential political opponent of President Putin, and of acquiring Yukos's assets.

Following the issue of the Final Awards, the Russian Federation sought to set aside the Interim and Final Awards in proceedings commenced on 10 November 2014 in the District Court of The Hague. Accepting the Russian Federation's argument that the arbitration procedures in Art 26 did not apply provisionally under the terms of Art 45 of the ECT because those procedures were inconsistent with Russian law, the District Court set aside the Interim and Final Awards.

The Claimants appealed to The Hague Court of Appeal. By its final judgment delivered on 18 February 2020, that court quashed the judgment of The Hague District Court and dismissed the underlying application of the Russian Federation to set aside the awards.

The Russian Federation filed an appeal in cassation to the Supreme Court of the Netherlands; such an appeal is concerned with whether there have been any errors of law by the lower court and whether the decision of the lower court was sufficiently reasoned. By its judgment delivered on 5 November 2021, the Supreme Court of the Netherlands rejected grounds for cassation 2 to 5, which dealt with the four arguments relied on by the Russian Federation in the Dutch Courts below, and in the present application.

The Claimants rely on the decisions of The Hague Court of Appeal and Supreme Court of the Netherlands as having finally and conclusively dismissed each of the four arguments of the Russian Federation, and as giving rise under Singapore law to issue estoppels, which preclude the same legal and factual issues from being raised and argued by the Russian Federation before this court in answer to the Claimants' case that the Russian Federation had agreed in writing to submit the dispute which has arisen to arbitration.

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Arbitration - Enforcement - Foreign award - International Law - Sovereign immunity - Sections 3(1) and 11(1) State Immunity Act 1979 (2020 Rev Ed) - Res Judicata - Issue estoppel