Journal of Siberian Federal University. Humanities & Social Sciences / The Yukos Cases. A Comparative Case Note on the ECtHR’s Decisions and the PCA Tribunal’s Awards

Full text (.pdf)
Issue
Journal of Siberian Federal University. Humanities & Social Sciences. 2015 8 (10)
Authors
Dederer, Hans-Georg
Contact information
Dederer, Hans-Georg:Passau, Germany; E-mail:
Keywords
Yukos; international investment arbitration; Energy; Charter Treaty; Permanent Court of Arbitration; international human rights protection; European Convention of Human Rights; European Court of Human Rights; de facto-expropriation; damages
Abstract

The decisions on the Yukos cases delivered by the European Court of Human Rights (ECtHR) in 2009/2011/2014 and by an international arbitral tribunal administered by the Permanent Court of Arbitration (PCA Tribunal) in 2009/2014 call for a comparative analysis. The two judicial bodies arrived at highly divergent conclusions, in particular with regard to the amount of damages to be paid by Russia: according to the Tribunal, Russia had to pay compensation amounting to roughly 50 billion USD, whereas the Court ordered Russia to pay about 2 billion EUR only. The general factual background to the ECtHR’s decisions and the PCA Tribunal’s awards was the same, though. Russian authorities had subjected Yukos to tax reassessments and related enforcement measures upheld by domestic courts. At the end of the day, Yukos was declared bankrupt and liquidated. The significant differences between the decisions can be attributed, at least to a certain extent, to the differing legal bases underlying the decisions. The ECtHR had to apply the European Convention on Human Rights (ECHR) and related additional protocols (ECHR-Prot.), i.e. human rights instruments, whereas the PCA Tribunal was bound to apply the investment protection provisions of the Energy Charter Treaty (ECT). The Tribunal classified the tax reassessments and related enforcement measures as a ‘creeping’ de facto expropriation (Article 13 ECT) whereas the Court held that these measures solely amounted to unlawful and disproportionate interferences with the right to property (Article 1 ECHR-Prot. 1). Accordingly, from the Tribunal’s perspective, Russia had to compensate the value of Yukos as a multibillion stock company. In contrast, according to the Court, Russia was obliged to refund unwarranted tax and enforcement fee payments only. The ECtHR also declared that Russia had violated the right to a fair trial (Article 6 ECHR). In contrast, the PCA Tribunal did not deal separately with due process violations even though it could have done so, e.g., under the ‘ fair and equitable treatment’ clause (Article 10(1)(2) ECT). A distinctive feature of the PCA Tribunal’s reasoning was the arbitrators’ ‘credo’ that Russia had intended mala fide to extinguish Yukos for political reasons. The Tribunal arrived at this conclusion on the basis of extensive testimony of fact witnesses called by the claimants. In contrast, the ECtHR abstained from any hypothesizing about political motives behind the taxation and related enforcement measures taken by the Russian authorities and affirmed by the Russian courts

Pages
2062-2091
Paper at repository of SibFU
https://elib.sfu-kras.ru/handle/2311/19825

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