Magazine article Europe-East

Eu/russiatribunal to Decide If Russia Bound by Energy Charter Treaty

Magazine article Europe-East

Eu/russiatribunal to Decide If Russia Bound by Energy Charter Treaty

Article excerpt

The question of whether Russia is or is not bound by the Energy Charter Treaty (ECT) sounds theoretical. However, Tim Osborne, CEO of GML, the main shareholder of the expropriated Yukos company, is awaiting a decision on a case brought under the ECT that governs international energy relations. GML is claiming some US$50 billion in damages from Russia for "illegal" expropriation. The international tribunal, sitting under the auspices of the Permanent Court of Arbitration in The Hague, is expected to give its decision very soon - it was expected before the summer.

"Our view is that Russia is bound by the treaty. There are specific provisions that state that a country is bound if it signs and provisionally applies the treaty without opting out. The Russian constitution also allows the executive to bind the country to international treaties on a provisional basis," said Osborne. He is also confident of eventually recuperating monies lost from Yukos. "If the tribunal decides in our favour, then it will also decide on our loss. Our argument is that the loss should be based on our 60% share in what Yukos would have been worth if the Russian government had not interfered. If there is a binding award then we expect Russia to meet it. If the Russian government does not, then there are other treaties that allow us to collect against Russian assets around the world," said Osborne.

"Russia has signed the ECT and applies it provisionally. The final level includes signature, provisional application and ratification. …

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