Complementarity or Conflict? Contrasting the Yukos-Case Before the European Court of Human Rights and Investment Tribunals

Abstract

In July 2014, the European Court of Human Rights (ECtHR) rendered its final decision on the claim brought by the liquidated Russian company OAO Neftyanaya Kompaniya Yukos (Yukos) against Russia, a decision which is the last in a series of three decisions in this case relating respectively to the admissibility of the application, the merits, and ‘just satisfaction’. A couple of weeks before the ECtHR’s decision, three investment arbitral tribunals established under the auspices of the Permanent Court of Arbitration (PCA) and functioning under the UNCITRAL Arbitration Rules had issued their final awards.

That the ECtHR and three investment tribunals each render a final decision in cases which relate to the same factual circumstances in a couple of weeks’ time may seem surprising, and is to say the least not common. Not only is the concurrent jurisdiction between a human rights court and an investment tribunal not self-evident, but two international courts deciding what is in essence the same case is remarkable in view of the potential inconsistent outcomes of the decisions. Yet, remarkable as this may seem, human rights and the protection of foreign investments are closer than first may appear and share some common features: both frameworks have given non-state entities direct access to an international dispute settlement system and aim at protecting non-state entities from State power. Nonetheless, there are notable differences between both legal frameworks: the rules governing access to the international dispute settlement system and the beneficiaries of the protection granted, while sharing some common features, still are very different in nature and in contents. Also, the obligations imposed on the State, including the rules governing direct and indirect expropriations, which despite seeming identical, vary in both systems.

This comment’s main objective is to compare and contrast the decision of the ECtHR and the awards of the arbitral tribunal, in order to highlight particular points of divergence. A complete comparison between the two decisions is impossible in the context of this symposium; I will thus limit myself here to the main findings, notably those of the ECtHR in relation to the right to property and those of the PCA arbitral tribunal in relation to expropriation and the question of compensation. I will however start with briefly discussing the parallelism of both proceedings and the jurisdictional link, if any, between the two cases. This indeed, is necessary to fully contrast the findings of the Court and the arbitral tribunal on the merits.

Keywords: investment law, investment arbitration, expropriation, European Court of Human Rights