ARBITRATION SCORECARD
TREATIES > > >
A listing of investment treaty arbitrations active in 2009–10 in which at least $1 billion was in controversy. For more treaty
arbitrations, please see americanlawyer.com/focuseurope.
AMOUNT IN CONTROVERSY: $103.6 billion
DISPUTE: Hulley Enterprises, Ltd. (Cyprus) v. Russian Federation;
Yukos Universal Limited (Isle of Man) v. Russian Federation;
Veteran Petroleum Limited (Cyprus) v. Russian Federation
CLAIMANT’S COUNSEL: Shearman & Sterling
RESPONDENT’S COUNSEL: Cleary Gottlieb Steen & Hamilton
ARBITRAL INSTITUTION AND SITE: Permanent Court of Arbitration (Ad hoc/UNCITRAL)/The Hague
NOTES: Largest reported arbitration ever. A trio of cases brought
against Russia by the majority shareholders of the defunct
Yukos Oil Company. Affiliated with Group Menatep Ltd., claimants
argue that Russia drove Yukos into bankruptcy through allegedly inflated tax claims in a vendetta against former CEO Mikhail
Khodorkovsky. In its defense, Russia has argued that its courts
properly adjudicated genuine tax offenses. Citing unfair treatment
and expropriation in violation of the Energy Charter Treaty, claimants seek roughly $85 billion for Hulley, $15 billion for Veteran,
and $4 billion for Yukos Universal. On November 30, 2009, the
tribunal, operating under the supervision of the Permanent Court
of Arbitration, asserted jurisdiction [“A Lifetime of Litigation,”
Summer 2010]. A few preliminary issues have been left for the
merits phase, including the ECT’s tax carve-outs and Russia’s
allegation that Yukos’s criminal wrongdoing bars its claim. A merits
hearing is scheduled for late 2012.
AMOUNT IN CONTROVERSY: $30 billion
DISPUTE: ConocoPhillips Petrozuata B.V. (The Netherlands),
ConocoPhillips Hamaca B.V. (The Netherlands), ConocoPhillips
Gulf of Paria B.V. (The Netherlands), and ConocoPhillips Company
(U.S.) v. The Bolivarian Republic of Venezuela
CLAIMANT’S COUNSEL: Freshfields Bruckhaus Deringer
RESPONDENT’S COUNSEL: Curtis, Mallet-Prevost, Colt & Mosle
ARBITRAL INSTITUTION AND SITE: ICSID/The Hague
NOTES: Following Venezuela’s assertion of greater control over
its energy sector, Conoco protested that President Hugo Chavez
had expropriated three joint venture projects in Venezuela’s
extra-heavy crude reservoirs in the Orinoco Belt and offshore
crude reservoirs in the Gulf of Paria. In the absence of an investment treaty between the U.S. and Venezuela, Conoco brought
claims under the Venezuelan foreign investment statute and the
Netherlands–Venezuela investment treaty (which Venezuela has
since renounced). Venezuela contested Conoco’s positions on jurisdiction, liability, and damages at hearings held May–June 2010
and in July 2010 in The Hague. In two similar cases, brought by
Mobil and Cemex, arbitrators have accepted jurisdiction under the
bilateral investment treaty (BIT) but denied jurisdiction under the
investment law.
AMOUNT IN CONTROVERSY: Up to $20 billion
DISPUTE: Mobil Corporation Venezuela Holdings B.V. (The
Netherlands), Mobil Cerro Negro Holding, Ltd (U.S.), and Mobil
Venezolana de Petroleos Holding, Inc. (Bahamas) v. Bolivarian
Republic of Venezuela
CLAIMANT’S COUNSEL: Covington & Burling
RESPONDENT’S COUNSEL: Curtis, Mallet-Prevost, Colt & Mosle
ARBITRAL INSTITUTION AND SITE: ICSID/Paris
NOTES: Claims alleging expropriation and violation of fair and
equitable treatment under the Venezuela–Netherlands BIT with
respect to two joint venture projects in Venezuela’s heavy crude
sector, resulting from governmental fiscal measures and restructuring of the petroleum industry. In June 2010 the tribunal asserted
jurisdiction under the Dutch treaty, but accepted Venezuela’s argument that its domestic investment law does not contain a consent
to ICSID jurisdiction. This led to a dismissal of all claims relating to
measures that occurred before Mobil established a Dutch holding
company in 2006, resulting in a reduction of potential damages.
Hearings on the merits are scheduled for February 2012. A parallel
contract arbitration has been filed against Venezuela’s state
oil company.
AMOUNT IN CONTROVERSY: Up to $20 billion
DISPUTE: Rovime Inversiones SICAV S.A. (Spain), Quasar de
Valors SICAV S.A. (Spain), Orgor de Valores SICAV S.A. (Spain),
and GBI 9000 SICAV S.A. (Spain) v. The Russian Federation
CLAIMANT’S COUNSEL: Covington & Burling
RESPONDENT’S COUNSEL: Baker Botts
ARBITRAL INSTITUTION AND SITE: Stockholm Chamber of
Commerce/Stockholm
NOTES: In this claim arising from the dismantling of Yukos Oil
Company, a group of Spanish investment funds allege breach of
the Spain–Russia BIT, which Russia denies. While the claimants
owned only a tiny stake in the Yukos company, they maintain that
it is a test case for foreign shareholders, who allege losses of up
to $20 billion in the Yukos affair. In March 2009 arbitrators ruled
that a narrow arbitration provision contained in the Spain-Russia
treaty did not preclude them from assessing whether Russia committed an expropriation. However, the tribunal dismissed several
claimants, including the original lead claimant Renta 4 SVSA, for
lack of standing. A hearing on the merits is scheduled for late
October 2011.
AMOUNT IN CONTROVERSY: $19 billion
DISPUTE: Saba Fakes (The Netherlands) v. Republic of Turkey
CLAIMANT’S COUNSEL: Houthoff Buruma
RESPONDENT’S COUNSEL: Derains & Gharavi
ARBITRAL INSTITUTION AND SITE: ICSID/Paris
NOTES: One of a series of arbitrations filed against Turkey in
the aftermath of criminal and fraud allegations leveled against
members of the Uzan family. Fakes, a Jordanian-Dutch binational,
claimed to have acquired control of Telsim, the second-largest
Turkish telecom, one day before the company was seized by Turkish authorities. In July 2010 the tribunal declined jurisdiction,
finding that Fakes had never intended to buy the shares in the telecom company, and ordering him to pay Turkey’s full legal costs.
AMOUNT IN CONTROVERSY: $18.2 billion
DISPUTE: Chevron Corp. (U.S.) and Texaco Petroleum Company
(U.S.) v. Republic of Ecuador
CLAIMANT’S COUNSEL: King & Spalding
RESPONDENT’S COUNSEL: Winston & Strawn
