The Russian Federation v Luxtona Limited 2021 ONSC 4604 - 30 June 2021
The Russian Federation brought an application under the UNCITRAL Model Law on International Commercial Arbitration (enacted in Ontario by Schedule 2 of the International Commercial Arbitration Act (the "ICAA")), to set aside an interim arbitral award finding that the Russian Federation had consented to arbitrate Luxtona's claims. The Russian Federation sought to admit evidence on the application that had not been before the tribunal. This is an appeal from the interlocutory decision of Penny J. declining to admit the Russian Federation's evidence (2019 ONSC 7558).
The respondent, Luxtona, is a former shareholder of Yukos (an energy company based in Russia). It alleges that the appellant, Russia, violated provisions of the Energy Charter Treaty relating to protection of investments, including Luxtona's investment in Yukos. Luxtona claims damages of US $701 million.
Russia is a signatory of the Treaty but has never ratified it. Luxtona argues that, under article 45(1) of the Treaty, Russia agreed provisionally to apply the Treaty, including its arbitration provisions, to the extent that this provisional application was not inconsistent with Russia's constitution, laws and regulations. Russia takes the position that it did not agree to apply the Treaty provisionally and that the arbitration provisions of the Treaty are inconsistent with Russian law.
The parties appointed an arbitral tribunal, seated in Toronto, Ontario, Canada. The tribunal heard evidence and arguments on the jurisdictional issue. Both sides put forward extensive evidence before the tribunal on relevant Russian law. In a lengthy interim award, the tribunal found that it has jurisdiction to arbitrate Luxtona's claims against Russia.