Russia and the Energy Charter Treaty
The following letter from the law professor Emmanuel Gaillard, representing the former shareholders of Yukos, was published in the Financial Times.
From Prof Emmanuel Gaillard.
Sir, Almost unnoticed, Vladimir Putin, the prime minister, announced in July that Russia will withdraw from the Energy Charter Treaty.
This is a significant setback for its European partners. Since its
adoption in 1994, the ECT has established a unique balance and a level
playing field in the energy sector for all 50 partners, including
Russia.This is a signal to the international community that
Russia refuses to live by its international commitments and is not
interested in protecting future energy investments.
It is no
coincidence that this comes at a time when the former majority
shareholders of Yukos oil company are awaiting an international
tribunal decision regarding, precisely, whether and to what extent
Russia is bound by the ECT. The former shareholders are seeking over
$50bn in compensation for the discriminatory and illegal expropriation
of their investment in Yukos.This latest act of Russian
unilateralism in no way means that Russia can walk away from its
pre-existing legal obligations. Russia’s withdrawal will have no impact
on the Yukos case, nor will it affect the rights of other existing
investors in Russia’s energy sector. Those investments benefit from a
20-year survival protection under the terms of the ECT.Within
this context, there should be little doubt that Russia’s withdrawal
from the ECT is anything more than a pre-emptive strategy, to sow
confusion and discord, in anticipation of an unfavourable precedent in
the Yukos tribunal regarding the binding nature of the ECT for the 20
years to come vis-à-vis investments made prior to the withdrawal.Emmanuel Gaillard,
Professor of Law,
Paris XII University, France
Lead counsel for the majority shareholders of the former Yukos oil company
Source: Robert Amsterdam
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