High Court Judge Andrew Henshaw said it would not be overly burdensome for the country to file evidence by May 6 setting out its reasons for resisting investors attempts to lift a stay imposed on the English court enforcement proceedings.
The judge rejected investors' request that Russia file evidence by April 15 on the grounds that it may not cooperate with the proceedings due to difficulties finding lawyers willing to represent it. However, he also rejected Russia's proposed July deadline.
"I do put down a marker that the commercial court guide makes clear that a party wishing to adduce evidence" on foreign law, "do so at an early stage," the judge said.
Lawyers for Yukos Oil investors had urged the court to speed up Russia's legal challenges before the country could shift its assets out of the U.K. to avoid sanctions imposed over the invasion of Ukraine.
Jonathan Crow QC, counsel for the investors, argued that Russia's current solicitors, White & Case LLP, should file evidence on behalf of the country by early April in advance of a hearing later this fall on whether a stay on the enforcement proceedings in the U.K. should be lifted.
Crow said Russia's efforts to fight enforcement proceedings should be moved forward before the country can be allowed to "mess around" with the English court's timetable for filing evidence in what is believed to be the largest ever award issued in investment arbitration.
White & Case has condemned Russia's invasion of Ukraine and pledged to cease working for the country. Crow said they're looking to end their relationship "as soon as practicable" to give their new, unidentified lawyers time to come up to speed on the case.
Russia hasn't been able to find new counsel and there is a risk the case will break down, Crow said. If the country is willing to invade a peaceful neighbor, then thwarting English courts is "child's play," he added. Crow also suggested that Russia has been unable to find new counsel willing to represent it in the U.K.
The awards were issued by an international tribunal in The Hague in 2014. The dispute stemmed from the dismantling by Russia of Yukos, once the country's largest oil company. Hulley Enterprises Ltd., Veteran Petroleum Ltd. and Yukos Universal Ltd. have argued that the Russian Federation could use the delay in the enforcement to dissipate its assets in the U.K.
David Goldberg, a White & Case partner representing Russia, objected to investors' timetable as "unnecessarily tight." He argued that the sanctions made it "unrealistic" for the country to remove its assets. Goldberg declined to speculate what evidence Russia would file.
The case was paused in April 2021 pending Russia's appeal to the Dutch Supreme Court seeking to overturn a February 2020 decision that revived the awards. In November, the Dutch court sent Russia's lawsuit challenging the awards back to a lower court.
The investors have since asked a U.S. federal court to restart parallel enforcement proceedings in America.
Russia had advanced several arguments at the Dutch Supreme Court for why it should overturn The Hague Court of Appeal's decision from last year. Russia says that the London court incorrectly interpreted an underlying treaty, the Energy Charter Treaty, and that the federation had not agreed to be bound by the arbitration regulations, because the country never ratified it.
The awards were set aside by the District Court of The Hague two years after they were issued. But that decision was reversed in February 2020 by The Hague Court of Appeal, which ruled that the tribunal had jurisdiction and that its application of the treaty did not violate Russian law.
Russia has argued that even if the stay is lifted, the awards can't be awarded due to its sovereign immunity.
Hulley Enterprises Ltd., Yukos Universal Ltd. and Veteran Petroleum Ltd. are represented by Jonathan Crow QC of 4 Stone Buildings and Paul McGrath QC, Alison Macdonald QC, David Peters and Naomi Hart of Essex Court Chambers, instructed by Stephenson Harwood LLP.
The Russian Federation is represented by David Goldberg of White & Case LLP.
The case is Hulley Enterprises Ltd. and others v. The Russian Federation, case number CL-2015-000396, in the High Court of Justice of England and Wales.
--Additional reporting by Joanne Faulkner, Paige Long and Caroline Simson. Editing by Joe Millis.
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