English court considers public law aspects of enforcing arbitral awards


The Court of Appeal has ruled on preliminary issues in the well-known and complex Yukos v Rosneft case. Yukos Capital, owned by former Yukos shareholders, had obtained arbitral awards in Russia against a Yukos entity that has since been taken over by stateowned Rosneft. These awards were subsequently annulled by the Russian courts. Nevertheless, the courts of the Netherlands allowed Yukos Capital to enforce them, holding that the Russian courts had acted without impartiality and independence. Yukos Capital then brought a second enforcement action in England. It argued that Rosneft could no longer rely on the Russian annulment judgment in light of the Netherlands judgment. Rosneft argued, to the contrary, that the doctrine of Act of State prohibits the English courts from questioning the Russian annulment.

The Court of Appeal agreed with neither proposition. It did not consider a judgment to be an Act of State, but nor was Rosneft estopped from relying on the annulment decision. The trial on the merits of the enforcement action continues.

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