Last week, a Dutch court overturned an order that Russia pay former stockholders of a former oil company $50 billion, the largest compensation award in history.
The 2014 arbitral tribunal administered by the Permanent Court of Arbitration in the Peace Palace found that Russian officials had subverted the legal system to bankrupt Yukos, Russia’s largest oil company at the time.
The Hague District Court ruled on April 20th that the tribunal did not hold jurisdiction under the Energy Charter Treaty.
“The action of the court is landmark because an arbitral tribunal awarded the largest amount in the history of arbitration; against a State; awards then quashed by a lower court,” said Marike Paulsson, director of the International Arbitration Institute at Miami Law. “The court’s decision may lead to potential controversial enforcement of annulled awards in multiple jurisdictions. The decision also caused shock to the arbitration system: all over the world, the conclusion is that awards are not final even when rendered by world famous arbitrators as Yves Fortier and Stephen Schwebel. Who has the last word on jurisdiction and should ghost awards - awards set aside by local courts - be resurrected to protect arbitration? The answer is complex as our students very well know.”
The Law School has many connections to the Yukos case: Albert Jan van den Berg and Carolyn Lamm, who are counsel to Russia, are both visiting professors at the Law School. Lamm holds a leadership role with the Institute.
Two Miami Law alumni worked at the Paris firm of Yas Benifatemi, counsel representing Yukos. One of the judges on the deciding tribunal is Judge Stephen Schwebel, honorary faculty member of the Institute.
Six more Miami Law alumni have worked and are working alongside the aforementioned leading arbitration specialists.
"The Hague court issued a decision that Russia did not consent to arbitrate under the Energy Charter Treaty,” said van Eyken. “Consent always has been and always will be the foundation of arbitration and The Hague Court has sent a resounding message that reaffirms this basic truth. This reasoning is completely consistent with Article 2 of the New York Convention, one of the advanced subject matters expertly taught in Professor Marike Paulsson’s courses at UM that I had the pleasure of taking.”
Soon after, van Eyken found his way to Brussels with the help of Marike Paulsson, formerly of counsel to the firm.
Diogo Pereira, J.D. ‘10, is a former student of Professors Albert Jan van den Berg, Marike Paulsson and Jan Paulsson. “The course on international arbitration and the 1958 New York Convention taught by professors Albert Jan van den Berg and Marike Paulsson was thrilling in that the professors’ knowledge of the New York Convention combined a deeply theoretical perspective with concrete experience of how the New York Convention was interpreted in practice,” Pereira said. “After graduating I started my first job on the Avenue des Champs-Élysées working under Yas Banifatemi and Emmanuel Gaillard at Shearman & Sterling LLP in Paris. Early on I helped with a filing on behalf of Yukos. I felt like a small part of something very big. Looking back, I feel fortunate to have studied with professors that were so far ahead of the curve on these arguments and concepts."
After his days with Banifatemi, Jan Paulsson, chair of the LL.M. program, was instrumental in finding a position for Pereira in London with Allen & Overy and served as a reference when he lateraled to an Associate position at Freshfields in Washington, D.C.
Miami Law students in this year’s W&C International Arbitration LL.M. program have studied the complexities of the Russia v. Yukos case in the New York Convention and Investment Arbitration courses that are part of the arbitration curriculum.
"In class, we discussed different interpretative theories, from restrictive textualist views to holistic intent-based approaches,” said Michael Rodriguez, a joint JD/LLM student in this year’s program. “We further debated how much one should rely on a treaty’s preparatory works and states’ subsequent practices as means of interpretation. As I read the Dutch court’s Yukos ruling, I was ecstatic to see this analytical framework in practice. In addition to analyzing the Energy Charter Treaty’s text, the Dutch court analyzed the treaty’s object and purpose and held that the tribunal’s reading was too expansive.
“At the same time, the Dutch court explicitly declined to use the treaty’s preparatory works and any subsequent state practices, though each party attempted to argue the latter issue. Seeing how the Yukos case has progressed while being a student of international arbitration has been invaluable for me. Now that the case is on appeal, I am happy to have world-class faculty with which to analyze, discuss, and learn from the forthcoming ruling."
Miami Law’s White & Case International Arbitration LL.M. program and International Arbitration Institute - without any formal ranking yet by Global Arbitration Review - are considered by the international arbitration community as leading in terms of research and education on international arbitration. “Students study with the titans of international arbitration and have real prospects of working with them after graduation,” Marike Paulsson said.