PAO Tatneft v Ukraine

PAO Tatneft v Ukraine

Although Ukraine established that the $81 million claim related to investments not made in accordance with Ukrainian law, Ukraine was precluded from raising the illegality argument at this stage due to issue estoppel, abuse of process, and waiver, having failed to raise it in earlier proceedings and before the arbitral tribunal. The court exercised its discretion under section 103(2) of the Arbitration Act 1996 to refuse to set aside the enforcement order.

Parties
Claimant/respondent: PAO Tatneft; Defendant/applicant: Ukraine
Jurisdiction
England and Wales
Judgment Date
23 November 2020
Procedural Posture
Commercial Enforcement of Arbitral Award / Application to Set Aside Enforcement Order (post Arbitration, Post Judgment)
Outcome
Application to set aside enforcement order dismissed; enforcement of the $81 million claim permitted.
Legal Topics
Enforcement of Foreign Arbitral Awards, State Immunity, Issue Estoppel, Waiver in Arbitration, Illegality of Investment, Abuse of Process, Jurisdiction of Arbitral Tribunal
Arbitration International Law Commercial Law Enforcement of Foreign Arbitral Awards State Immunity Issue Estoppel Waiver in Arbitration Illegality of Investment +2 more

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Parties

PAO Tatneft

Claimant/respondent

Ukraine

Defendant/applicant

Procedural Posture

Commercial Enforcement of Arbitral Award / Application to Set Aside Enforcement Order (post Arbitration, Post Judgment)

Legal Issues

  1. 1 Whether Ukraine can resist enforcement of the $81 million portion of the arbitral award on grounds of illegality under Ukrainian law
  2. 2 Whether issue estoppel or abuse of process precludes Ukraine from raising the illegality argument
  3. 3 Whether Ukraine waived its right to challenge the tribunal's jurisdiction on the illegality ground by not raising it earlier

Ratio Decidendi

Although Ukraine established that the $81 million claim related to investments not made in accordance with Ukrainian law, Ukraine was precluded from raising the illegality argument at this stage due to issue estoppel, abuse of process, and waiver, having failed to raise it in earlier proceedings and before the arbitral tribunal. The court exercised its discretion under section 103(2) of the Arbitration Act 1996 to refuse to set aside the enforcement order.

Court Disposition

Application to set aside enforcement order dismissed; enforcement of the $81 million claim permitted.

Orders

  • Application by Ukraine to set aside the enforcement order is refused.
  • Parties to agree an order to give effect to the judgment.