YUKOS Case: Netherlands’ Attorney General Recommends Dismissing Russia’s Final Appeal

Executive summary: The Dutch Attorney General has recommended that the Supreme Court dismiss the Russian Federation’s final appeal against enforcement of the $50 billion arbitration awards, in a major step forward in the long-standing Yukos saga. The opinion, issued on 11 April 2025, concludes that Russia's allegations of fraud were raised too late and are not sufficiently substantiated to undermine the validity of the awards. This recommendation reinforced the decision of the Amsterdam Court of Appeal, bringing Yukos shareholders one step closer to final enforcement in one of the largest investor-state disputes in recent decades.

n a significant development in the long-running Yukos case, the Dutch Procureur-Generaal of the Supreme Court has recommended that the Russian Federation's final appeal in cassation be rejected. In an opinion dated 11 April 2025, the Attorney General found that the Russian Federation's arguments were lodged too late and did not comply with the standards of proper procedural conduct before the Dutch courts. The recommendation therefore endorses the continued enforcement of the $50 billion arbitral award in favour of the former shareholders of Yukos Oil Company. 

In particular, the Attorney General concurred with the Amsterdam Court of Appeal's finding that the Russian Federation had only pleaded fraud at the appeal stage, despite having been aware of the alleged misconduct during the earlier proceedings. Accordingly, the invocation of fraud was deemed untimely and procedurally inadmissible. 

Furthermore, the Attorney General noted that, had the allegations of fraud been raised in a timely manner, they would not have justified setting aside the arbitral awards. In his view, the available evidence — including claims of secret payments and misleading statements — had not been strong enough to show that the outcome of the arbitration would have been materially different. 

Background

The case involved a legal battle between shareholders of the former Russian oil company Yukos and the Russian government. 

The shareholders, namely Hulley Enterprises Limited (HEL), Veteran Petroleum Limited (VPL) and Yukos Universal Limited (YUL), collectively HVY, claimed that Russia had expropriated their investments in Yukos through a series of actions, including arrests, tax assessments, and asset sales. Russia, on the other hand, argued that the shareholders had illegally acquired control of Yukos through corruption and tax evasion.

In February 2005, HVY initiated arbitration proceedings against the Russian Federation pursuant to Article 26 of the Energy Charter Treaty (ECT). The three arbitrations were heard in parallel in the Netherlands by an Arbitral Tribunal of the Permanent Court of Arbitration (PCA) appointed pursuant to the UNCITRAL Arbitration Rules.

In three separate arbitral awards rendered on 18 July 2014 [see here, here and here], the Arbitral Tribunal dismissed the Russian Federation’s jurisdictional and admissibility defenses, declared that the Russian Federation had breached its obligations under Article 13(1) of the ECT and ordered Russia to pay YUL, HEL and VPL damages in the amount of USD 1,846,000.687, USD 39,971,834,360 and USD 8,203,032,751, respectively, plus the reimbursement for the costs of the arbitrations and a portion of the costs of their legal representations and assistances in the arbitration proceedings, and post-award interest on any outstanding amount starting from 15 January 2015, compounded annually.

The Russian Federation applied to the Dutch courts to annul the arbitral awards and to that end invoked various grounds for annulment, including the ground that the arbitral awards were made in violation of public policy.

The District Court of The Hague granted the claim on the grounds that there was no valid arbitration agreement. HVY lodged an appeal against the District Court’s judgment.

On appeal, the Russian Federation argued in its statement of defense that the arbitral awards are also contrary to public policy because HVY committed fraud in the arbitration proceedings, including by submitting false statements, by withholding documents relevant to crucial points of dispute in the arbitrations and by making secret payments to one of HVY’s main witnesses. HVY subsequently objected to the admission of new arguments. By interlocutory judgment of 25 September 2018, the Court of The Hague found this objection well-founded insofar as it relates to arguments put forward by the Russian Federation regarding alleged fraud committed by HVY in the arbitration proceedings, because fraud committed during the arbitration proceedings can only be addressed in revocation proceedings. 

In its final judgment of 18 February 2020, the Court of The Hague annulled the judgment of the District Court and dismissed the claims of the Russian Federation. 

The Russian Federation lodged an appeal in cassation against that decisions.

As previously reported by iarbnews,  in its judgment of 5 November 2021, the Supreme Court dismissed all complaints in cassation except one: namely that the Court of Appeal did not adequately consider and investigate allegations that the former Yukos shareholders committed fraud in the arbitration proceedings. In the Supreme Court’s view, that ground of appeal had been left undiscussed by the Court of Appeal for incorrect reasons. The fraud allegedly consisted of Claimants making false statements about the control over HVY and bribing a witness. Therefore, the Supreme Court overturned the Court’s ruling only on the point of fraud and referred the case to the Amsterdam Court of Appeal for further hearing and decision.

In a judgment dated 20 February 2024 [see here], the Amsterdam Court of Appeal noted that the Russian Federation had only invoked fraud on appeal, while the alleged fraud was already known to the Russian Federation at the time of the proceedings before the District Court. In this respect, the Court noted that the Russian Federation had at the stage of the appeal numerous documents confirming the fraud, although it had chosen not to produce them at that stage. In the Court’s view, it was contrary to good procedural practice to produce those documents for the first time after the appeal had been decided, for the sole purpose of pleading fraud. Accordingly, the Court of Appeal considered that those documents should not be taken into account in the proceedings following the decision to refer the case and decided that the Russian Federation had made an untimely plea of ​​fraud and, therefore, the arbitral awards should not be annulled on that grounds. The Court of Appeal then went on to consider, in addition, the question of whether the arbitral awards should be annulled if the Russian Federation had made a timely plea of ​​fraud. The Court was of the opinion that this was not the case and dismissed the Russian Federation’s claims.  

In the Amsterdam Court of Appeal’s opinion, the control issue was not even relevant to the outcome of the arbitrations. As a result, it was not plausible that the arbitrators would have reached a materially different outcome had they been aware of the documents which the Russian Federation claimed to have obtained after the arbitrations and which, according to it, show that de facto control of the trusts was vested in others. Hence, to that extent, the Court was of the view that it did not appear that the arbitral awards were made as a result of deception or fraud by the Claimants. Therefore, it found that even if the Russian Federation had timely invoked fraud in developing the public order grounds for annulment, the arbitral awards would not have been set aside.

The Russian Federation then lodged an appeal in cassation against that decision, which, in to the Attorney General’s opinion, should be rejected.

The Supreme Court’s decision is now being awaited. A decision is usually expected within a few months of the Attorney General’s opinion, according to sources familiar with such proceedings and based on the usual timeframe for cassation cases in the Netherlands. The upcoming decision will mark a pivotal new chapter in one of the most significant investor-state disputes in modern investment arbitration.