On 30 September 2016, the US District Court for the District of Columbia stayed recognition and enforcement proceedings regarding US$50 billion arbitration awards in favor of shareholders of the defunct Yukos Oil. Co (see Legal update, Majority shareholders in Yukos awarded US$50 billion). Russia moved to dismiss the case, arguing that the US court lacked subject matter jurisdiction under the Foreign Sovereign Immunity Act (FSIA). Russia claimed never to have ratified the Energy Charter Treaty (ECT), the basis for the shareholders' assertion that Russia agreed to arbitrate. Having never consented to arbitration, Russia asserts, the state enjoys complete immunity in US courts under the FSIA.

In April 2016, Russia was successful in having the award set aside in a district court at the seat of the arbitration, The Hague (see Legal update, The setting aside of the Yukos awards: full update). The Dutch court accepted Russia's argument that it never agreed to arbitrate claims under the ECT. The award creditors then sought a stay of the US litigation. The Russian Government pressed the US court to first consider its motion to dismiss based on a lack of subject matter jurisdiction before deciding whether to stay. However, the US court held that the result of appeals filed at The Hague would bear on its own jurisdictional analysis. Under the circumstances, a stay was warranted.

Courts regularly stay enforcement pending resolution of set-aside proceedings. What was unusual in this case, was that the request for the stay came from the award creditor.

Case: Hulley Enterprises Ltd. v. Russian Federation, (D.D.C. Sept. 30, 2016).