Oral Argument Professor Albert Jan van den Berg

THE RUSSIAN FEDERATION

VERSUS

HULLEY ENTERPRISES LIMITED VETERAN PETROLEUM LIMITED

YUKOS UNIVERSAL LIMITED

DISTRICT COURT OF THE HAGUE, HEARING, 9 FEBRUARY 2016

JURISDICTION GROUND 1- Article 45 ECT -

Violation of Russian Federation’sSovereignty as a State

No Jurisdiction on the Basis of Article 45(1) ECT

''Each signatory agrees to apply this Treaty provisionally pending its entry into force ( ... ),

to the extent that such provisional application is not inconsistent with its

constitution, laws or regulations."

JURISDICTION GROUND 1: ARTICLE 45 ECT RUSSIAN FEDERATION

Domestic Investments and Mala Fide Investments Are Not

Protected

JURISDICTION GROUND 2- Article 1(6) and (7) ECT -

Appendix to Interim Awards ("Russian Sandwich")

Senior~ Prol<:elur

Ben;,fici3Jy

APPENDIX

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JURISDICTION GROUND 2: DOMESTIC +MALA FIDE INVESTMENTS RUSSIAN FEDERATION

The Russian circulation of funds

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DE FACTO MANAGED FROM MOSCOW BY OLIGARCHS

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Domestic and/ or Mala Fide Investments Are Not Protected

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JURlSDlCTlON GROUND 2: DOMESTIC +MALA FIDE INVESTMENTS RUSSIAN FEDERATION

Tax Dispute -The Massive Fraud in Mordovia

JURISDICTION GROUND 3- Article 21(1) ECT -

No Jurisdiction on the Basis of Article 21(1) ECT

''Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties. In the

event of any inconsistency between this Article and any other provision of the Treaty, this

Article shall prevail to the extent of the inconsistency."

JURISDICTION GROUND 3: ARTICLE 21(1) ECT RUSSIAN FEDERATION

MANDATE GROUND 1- Article 21(5)(b)(i) ECT -

The Arbitral Tribunal Has Failedto Refer the Dispute on

Expropriation to the Competent Tax Authorities.

Breach of referral obligation Article 21(5)(b)(i) ECT

''( ... ) bodies called upon to settle disputes ( ... ) shall make a referral to the relevant

Competent Tax Authorities."

MANDATE GROUND 1: BREACH OF REFERRAL OBLIGATION RUSSIAN FEDERATION

OBLIGED SITUATION

ACTUAL SITUATION

Breach of Referral Obligation

Tribunal submits the dispute

Tribunal does not submit the dispute

)

Tax authorities issue advice

Tax authorities are not requested to issue

advice

)

Parties are heard about this advice

Parties are not heard

Yukos Awards

)

Yukos Awards

MANDATE GROUND 1: BREACH OF REFERRAL OBLIGATION RUSSIAN FEDERATION

MANDATE GROUND 2 - surprise decision -

- own method -- no due process -

The Arbitral Tribunal Has Failedto Comply with Its Mandate

When Determining the Amountof Damages

The Determination of Damages by the Arbitral Tribunal

DAMAGES Equity value + Dividend

MANDATE GROUND 2: DETERMINATION OF DAMAGES RUSSIAN FEDERATION

The Arbitrators Have Not Fulfilled Their Mandate

Personally

Introduction of the "Assistant"

19 THE CHAIRMAN : Thank you, Mr Greig . I would like to bring to

20 the attention of the parties that I have asked one of my

21 colleagues in my office in Montreal to assist me in the

22 conduct of this case. Because, like all of us, I travel

23 a lot, if at any time I am unreachable, you could always

24 contact him . ( ... )

2

3

4

( .. . ) It

may come to pass that you wish to jfind out something with

respect to the tribunal that Brooks Daly might not be

5 aware of. Martin at my office in Montreal could be

6 reached and hopefully will have the answer for you.

f roceaural nearzng, 31 (A wut r ')oos, p 9') 93

MANDATE GROUND 3: MANDATE NOT FULFILLED PERSONALLY RUSSIAN FEDERATION

The Introduction of the "Assistant"

•

••• HUH 1 ® ---- 3

TRIBUNA~··················· :. 0 ~ ~ I

VALASEK

MANDATE GROUND 3: MANDATE NOT FULFILLED PERSONALLY RUSSIAN FEDERATION

Fortier

Price

Poncet (replaced Price) Schwebel

The Hours Spent by the "Assistant"

(2 Bom.w • af Baarll iD. 111-11-2005 moB, lluuaah 31- inelnilina

l2-2007 - h-r.iua

20o8

22 359 215 275,5

138,05 0

48,5 300,5

411,85 152,75

(4J (5) Bom.w • af Bcnml•af

1-1-2009 111-11-2005 lluuup ea.d lhrcn ..... end

381 2625,2 3006,2

490,5 1592,25 2082,75 138,05 0 138,05

349 1540 1889

564,6 1852,6 2417,2

MANDATE GROUND 3: MANDATE NOT FULFILLED PERSONALLY RUSSIAN FEDERATION

Arbitrators Have Not Fulfilled Mandate Personally

- 3000

2625

- 2500

- 2000

1592 1540 e 1500

e 1000

e 500

0

Valasek Fortier Price + Poncet • Hours from 18 November 2005 through 3 1 December 2008

• Hours from 1 Janua1y 2009 to the end

1853

Schwebel

MANDATE GROUND 3: MANDATE NOT FULFILLED PERSONALLY RUSSIAN FEDERATION

MANDATE

The Assistant as Fourth Arbitrator

• MANDATE

••• HUH 1 2 3

TRIBUNAL

•

Valasek as author

Section IX 14-8% 95·2%

Section X 14,8% 95·2%

Section XII

o% 20% 40% 6o% 8o% 100%

• Tribunal • Valasek

Average probability according to Dr Chaski's model that Valasek was the author of each of the subsections of the Representative Sections attributed to him

MANDATE GROUND 3: MANDATE NOT PERSONALLY FULFILLED RUSSIAN FEDERATION