Law firm Stephenson Harwood LLP has successfully represented former Yukos Oil Company shareholders as the UK Supreme Court upheld an earlier Court of Appeal judgment against the Russian Federation.
The Court of Appeal had previously ruled in the $50 billion enforcement proceedings that Russia was estopped, and therefore could not claim that it was immune from suit. This meant that it could not re-run in England certain arguments which it had already lost before the Courts of the Netherlands, which were the Courts of the seat of the arbitrations.
Russia sought to appeal that decision, but on 27 June the Supreme Court refused to grant Russia permission to appeal. The Court of Appeal decision therefore establishes definitively that issue estoppel can apply in the context of state immunity, and means that states can no longer seek to re-argue issues that go to their immunity in multiple jurisdictions.
"This is a significant ruling, and one with notable wider implications," said Partner Ros Prince, who led the Stephenson Harwood team advising on the case. "It is an important decision for award creditors of sovereign states - the Court of Appeal's decision in respect of issue estoppel in the context of state immunity stands, and this means states will not be permitted to re-argue issues which have been finally determined by other Courts, provided that those decisions meet the requirements of issue estoppel. It further adds to the importance of choosing an appropriate seat in arbitrations, and parties would be well advised in choosing a seat to consider whether the relevant jurisdiction has a concept of res judicata/issue estoppel – and, if so, whether it is in the party's interest for that to be applicable."
Ros Prince was supported by Managing Associate Tom Spackman, and Associates Philipp Mueller and Harry Cook.
The Fraud and Asset Recovery team at Stephenson Harwood has extensive experience of enforcing judgments and arbitration awards, and also has a particular expertise in acting for and against sovereign states and state-owned entities.
