Yukos Capital S.A.R.L. (Luxembourg) v. OAO Rosneft (Russian Federation)

Yukos Capital S.A.R.L. (Yukos Capital) (plaintiff) was a member of a Russian group of companies involved in oil production. Yukos Capital loaned money to a company called Neftegaz under a loan agreement. Neftegaz was owned entirely by a related company, Yukos Oil Company. Yukos Oil Company was accused of tax evasion and, upon being assessed exceptionally large tax liabilities, was forced into bankruptcy. OAO Rosneft (Rosneft) (defendant), which was owned by the Russian government, acquired the majority of Yukos Oil Company’s assets through the bankruptcy, including the shares in Neftegaz. The Russian state also brought criminal proceedings against the former chairman of the board of directors of Yukos Oil Company, who was also a political opponent of Vladimir Putin. Yukos Capital brought several arbitration proceedings against Neftegaz seeking to enforce the loan agreement. The arbitral panel issued several awards directing Neftegaz to pay Yukos Capital approximately 13 billion rubles. Neftegaz merged with Rosneft and ceased to exist. Rosneft then brought actions in Russian court to have the awards in favor of Yukos Capital annulled. The Russian court annulled the awards, and Yukos Capital brought an action in the Netherlands seeking enforcement of the awards. Yukos Capital submitted evidence of the Russian judiciary’s lack of impartiality and bias toward the Russian government.