Hughes Hubbard Secures U.S. Supreme Court Victory, Clears Path for District Court to Consider Application to Enforce Arbitration Award for Ukrainian Gas Companies

Russia’s Foreign Sovereign Immunities Act arbitration exception argument declined.

Highlights

U.S. Supreme Court declined to review Russia’s petition for certiorari, clearing a path for the District Court to consider the merits of our application to enforce a $34 million arbitral award for the firm’s clients.
Russia’s jurisdiction argument centered on the Foreign Sovereign Immunities Act arbitration exception.
Ukrainian gas companies have been seeking compensation since 2015, after their chain of gas stations was seized by Russia following its 2014 invasion of Crimea.

The U.S. Supreme Court sided with Hughes Hubbard’s clients, Stabil and a group of other Ukrainian petrol companies, in refusing the Russian Federation’s petition for certiorari, clearing a path for the District Court to consider the merits of our application to enforce a $34 million arbitral award

Russia’s rejected petition argued that, under the Foreign Sovereign Immunities Act's arbitration exception, courts must resolve whether a sovereign consented to arbitrate with the parties invoking the arbitration clause during an initial jurisdictional phase, rather than during a later merits phase.

In a brief submitted to the Supreme Court, Hughes Hubbard argued Russia’s petition should be denied because the lower courts correctly held that jurisdiction exists under the Foreign Sovereign Immunities Act’s arbitration exception where there is an arbitration agreement, an arbitral award and a treaty governing enforcement.

The Ukrainian companies owned and operated chains of gas stations seized by Russia after its 2014 invasion of Crimea. They have been fighting for compensation since 2015. They have prevailed at the jurisdiction and merits stages, before an international arbitration tribunal and the Swiss Federal Supreme Court, and are now seeking enforcement of the resulting final award.

In February, the D.C. Circuit affirmed the District Court’s decision that it had jurisdiction to enforce the $34 million award against Russia, followed in April by the U.S. Court of Appeals for the D.C. Circuit denying Russia’s effort to delay the enforcement.

Law360 and Global Arbitration Review reported on the court’s refusal to hear the case.

The Hughes Hubbard team representing Stabil and the other Ukrainian gas companies includes John Townsend, Eleanor Erney, Shayda Vance, Carter Rosekrans and Winthrop Jordan.