Summary

From 2003 to 2004, Russia expropriated the most valuable assets of OAO Yukos Oil Company ("Yukos"), at the time the largest private oil company in the Russian Federation. Shareholders of Yukos challenged the expropriation in arbitration and secured a $50 billion award, which they seek to enforce in federal court. Russia asserts that sovereign immunity bars the suit and that the arbitration exception to the Foreign Sovereign Immunities Act ("FSIA") does not apply. The district court held it had jurisdiction under the FSIA, in part because it was bound by the arbitral tribunal's conclusion that an arbitration agreement existed between Russia and the Shareholders.

Whether an arbitration agreement exists is a jurisdictional fact under the FSIA that must be independently evaluated by the district court. Because the district court gave binding effect to the arbitral tribunal's determination of this jurisdictional fact, we vacate the judgment. On remand, the district court must independently consider whether the FSIA's arbitration exception to sovereign immunity applies.