Artur Zurabyan, of the ART DE LEX law firm, commented on possible sanctions against Russia for noncompliance with the arbitration decisions in the Yukos case

On 16 January, Russia began incurring an interest penalty as the grace period expired for the payment of a USD 50.1 billion fine to former shareholders of the defunct oil giant, Yukos. According to the arbitration decision, beginning on 15 January 2015, the payment will increase each year, with the addition of a percentage of the cost of a ten-year US Treasury note. Lawyers estimate that the sum could reach $1.7 billion within a year.

In July, the Hague Court sustained a claim of the former Yukos shareholders, who demanded that Russia compensate them for their losses, and it ordered Moscow to pay USD 50.1 billion, half as much as they originally had claimed. The court ruled that Russia’s actions against Yukos amounted to the expropriation of investments, in breach of Article 45 of the Energy Charter, which Russia had signed in 1990 but never had ratified.

Under the court ruling, Russia had to compensate the investors within 180 days, that is, by 15 January. Interest began accruing after that date.

Arthur Zurabyan, who heads International Judicial Disputes and Commercial Courts Section of ART DE LEX, said Russia had petitioned the court, within the allotted three-month period, to cancel its decision: “Until now, there is no information about any decision regarding the matter. Nevertheless, according to Article 1066 of the Civil-Procedural Code of the Netherlands, the request itself does not suspend the court’s decision. Only the appellant’s request can do so.”