Petitioners Hulley Enterprises, Ltd., Yukos Universal Ltd., and Veteran Petroleum Ltd. (collectively, the "Shareholders") instituted this suit in 2014 against respondent, the Russian Federation, to enforce three arbitral awards (the "Final Awards") issued by an arbitral Tribunal (the "Tribunal") sitting in the Hague under the auspices of the Permanent Court of Arbitration.
Petition to Confirm Arbitration Awards ("Pet.") ¶ 1-2, ECF No. 1; id., Ex. A to Decl. of Emmanuel Gaillard ("Gaillard Decl."), Hulley Final Award, ECF No. 2-1; id., Ex. B to Gaillard Decl., Yukos Final Award, ECF No. 2-2; id., Ex. C to Gaillard Decl., VPL Final Award, ECF No. 2-3 (collectively, the "Final Awards").1 The Final Awards total over $50,000,000,000 in United States Dollars, which the Shareholders won after nearly ten years of arbitration proceedings that began in 2004 and concluded in 2014. Id ¶ 1, 34. In addition to filing this case, the Shareholders have sought to enforce these awards in multiple other countries, including Belgium, France, Germany, India, and the United Kingdom. See Resp't's Opp'n Mot. Stay, Ex.
2, Decl. Expert Op. Dr. Andrey Kondakov ¶ 26, ECF No. 127-2. In 2015, the Russian Federation moved, pursuant to Federal Rule of Civil Procedure 12(b)(1), to dismiss the Shareholder's petition for lack of subject matter jurisdiction, on the grounds of sovereign immunity not exempted under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 et seq., and inapplicability of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 ("New York Convention") to support the exercise of jurisdiction. See Resp't's Mot. Dismiss for Lack of Jurisdiction ("Resp't's Mot."), ECF No. 24.
The Russian Federation also separately moved to deny confirmation of the petition under the New York Convention, see Resp't's Mot. to Deny Confirmation of Arbitration Awards Pursuant to the New York Convention ("Resp't's Mot. Deny Pet."), ECF No. 23, which motion is not resolved in this Memorandum Opinion, since the enforceability of an arbitral award is separate from, and need not be decided as part of, the question of whether a court has jurisdiction to entertain a petition for such enforcement, see, infra, Part II.2
The Russian Federation has failed to discharge its burden of persuasion to establish that the FSIA's arbitration exception is inapplicable here. As a result, the FSIA arbitration exception applies, and the Russian Federation's general sovereign immunity provides no protection in this action to enforce the Final Awards issued by the arbitral Tribunal. Moreover, the New York Convention provides a treaty basis upon which this Court may enforce those Final Awards, thereby establishing this Court's subject matter jurisdiction to resolve the Shareholders' Petition.
Accordingly, the Russian Federation's Motion to Dismiss for Lack of Subject Matter Jurisdiction and Supplemental Motion to Dismiss for Lack of Subject Matter Jurisdiction, ECF Nos. 24 and 108 (as amended by ECF Nos. 271 and 272), are DENIED. The Russian Federation's Motion for Leave to File a Proposed Supplemental Reply, ECF No. 246, is GRANTED; the Russian Federation's Motion for an Evidentiary Hearing to Cross-Examine Petitioners' Witnesses, ECF No. 244, is DENIED WITHOUT PREJUDICE; the Shareholders' Motion to Strike the Third Avtonomov Declaration, ECF No. 250, is DENIED AS MOOT; the Russian Federation's Sealed Motion for Leave to File Document Under Seal, ECF No. 259, and the Shareholders' responding Sealed Motion for Leave to File Document Under Seal, ECF No. 260, are GRANTED; and the Russian Federation's Sealed Motion, ECF No. 259-3, is DENIED WITHOUT PREJUDICE.
This case will progress to consideration of the relief sought in the Petition to confirm the Final Awards and the Russian Federation's Motion to Deny Confirmation of the Arbitration Awards Pursuant to the New York Convention. The parties are directed to submit a Joint Status Report by December 5, 2023, proposing a schedule to resolve the final issues in this matter.
An order consistent with the Memorandum Opinion will be entered contemporaneously.
Date: November 17, 2023