Summary

Reply in Support of Respondent Russian Federation's Supplemental Motion to Dismiss the Petition to Confirm an Arbitration Award of Joint Stock Company State Savings Bank Oschadbank and Response to Discussion of Cases Decided After the Stay Was Imposed

PRELIMINARY STATEMENT

Russia's Supplemental Motion ("Supp. Motion") established this Court lacks jurisdiction under §1605(a)(6) for two separate reasons. First, the BIT contains no legally valid agreement to arbitrate takings during an international armed conflict ("IAC") in Crimea, as alleged by Oschadbank. Second, the New York Convention does not apply to the Award based on the United States' "commercial reservation." Oschadbank combined its opposition to the Supp. Motion with discussion of cases decided after the stay, permitted by the July 29, 2025 Minute Order (collectively "Opp."). The Opp.'s ad hominem attacks and arguments lack merit. In response to Oschadbank's new argument - issue preclusion, as directed by the Hulley Circuit Court, this Court should consider inviting the United States to state its position on whether issue preclusion applies to §1605(a)(6) jurisdiction, and provide directions on whether and/or how the November 14, 2025 hearing will be conducted.

First, this Court lacks §1605(a)(6) jurisdiction because no legally valid agreement to arbitrate IAC takings in Crimea existed for two reasons. Under lex specialis, takings in the theater of armed conflict with Ukraine are governed by the law of IAC, not the law of expropriation. Thus, Article 5(1) "expropriation" is limited to Peacetime takings, and no legally valid expropriation claim exists. Further, the BIT's interpretation under the VCLT also dictates no legally valid agreement exists to arbitrate wartime takings under Article 5. Neither argument concerns "scope"

as Oschadbank argues. Under its illogical approach, the Court would have jurisdiction to compel a sovereign to litigate the merits--either to contest an award or arbitrate a claim--by a claimant simply producing a treaty containing an arbitration agreement pertaining to some agreed subject matter, even if the dispute is not covered by the agreement as a matter of law. As the Court suggested at the September 18, 2024 hearing, it would be "insane" and "illogical" to sustain jurisdiction over a sovereign on a claim with no legal validity.

Second, because Oschadbank's allegations are governed by the law of IAC, no "commercial" legal relationship under the New York Convention existed between Oschadbank and Russia for a taking during an IAC in Crimea. Oschadbank's argument that the Convention need only "arguably" apply to sustain FSIA jurisdiction is contradicted by Helmerich and Zhongshan, which require this Court to determine whether the Convention applies as a threshold jurisdictional issue. It would be equally illogical to compel a sovereign to litigate the merits of an award when it is not enforceable under the Convention as a matter of law.

Finally, the Opp. argues issue preclusion based on the 2025 French Court of Appeals decision denying annulment. This fails on multiple grounds. Preclusion does not apply to FSIA jurisdictional issues - which the Court should defer deciding until the United States indicates its position. And, even if preclusion applied to FSIA, it fails on the merits because French law does not recognize issue preclusion, and even if it did, the issues in France and here are different.

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