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Yukos Capital S.A.R.L. v. Samaraneftegaz

United States District Court, S.D. New York

August 6, 2013

YUKOS CAPITAL S.A.R.L., Petitioner,
v.
OAO SAMARANEFTEGAZ, Respondent

Page 290

FOR Yukos Capital S.A.R.L., Plaintiff: Anne Maureen Coyle, Robert L Weigel, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Robert E Malchman, Gibson, Dunn & Crutcher, LLP, New York, NY.

For Peter O'Brien, Movant: Stuart Marc Glass, Choate Hall & Stewart, Boston, MA.

For Oao Samaraneftegaz, Defendant: Howard S. Zelbo, Cleary Gottlieb Steen & Hamilton, LLP(NYC), New York, NY; Matthew David Slater, PRO HAC VICE, Cleary Gottlieb Steen & Hamilton LLP (DC), Washington, DC.

OPINION

Page 291

MEMORANDUM OPINION & ORDER

HONORABLE PAUL A. CROTTY, United States District Judge.

Yukos Capital S.A.R.L. (" Yukos Capital" ) seeks enforcement of an arbitration award issued in its favor against OAO Samaraneftegaz (" Samaraneftegaz" ) by the International Court of Arbitration of the International Chamber of Commerce (" ICC" ) in New York. On September 25, 2012, the parties cross moved for summary judgment. Samaraneftegaz argues that the Court should grant preclusive effect to a Russian court's refusal to enforce the award, and challenges the award on the grounds that it did not receive adequate notice of the arbitration proceeding, and

Page 292

that enforcement would violate domestic public policy. For the reasons discussed below, the Court GRANTS summary judgment to Yukos Capital and DENIES Samaraneftegaz's motion for summary judgment.

BACKGROUND

On July 24, 2012, the Court found that it had personal jurisdiction over Samaraneftegaz. See 10 Civ. 6147 Dkt. No. 100 (S.D.N.Y. 2012). The court assumes familiarity with the procedural history and the relevant facts as set forth in the Court's previous order. Id. at 1-2 n.1, 3-5. Briefly summarized, and supplemented for the purposes of the parties' pending motions, the facts are:

Yukos Capital is a Luxembourg-based subsidiary of Yukos Oil Company (" Yukos Oil" ). (Yukos Capital 56.1 ¶ 1.) Samaraneftegaz was also a wholly-owned subsidiary of Yukos Oil from 2001 until May 2007, when Neft-Aktiv acquired the shares of Samaraneftegaz at an auction. (Id. ¶ ¶ 5, 11.) Samaraneftegaz is now a subsidiary of OJSC Oil Company Rosneft, a Russian state-controlled oil company.

A. The July 2004 Loan Agreements

In July 2004, Samaraneftegaz and Yukos Capital executed two loan agreements in which Yukos Capital extended a total of RUR 2,415,890,000 to Samaraneftegaz (the " Loans" ). (Id. ¶ 12.) The addenda to the Loans submitted all relevant disputes to arbitration before the ICC. (Id. ¶ 17.) It is undisputed that Samaraneftegaz failed to make any payments on the Loans, including interest when due and principal upon notice of default. (Id. ¶ ¶ 18-20.)

B. The Arbitration Proceedings

On January 12, 2006, Yukos Capital requested arbitration at the ICC to settle the outstanding Loans. (Id. ¶ 23.) The ICC notified Samaraneftegaz by letter dated January 20, 2006 that Yukos Capital had demanded arbitration, forwarded a copy of the Request for Arbitration, and reported that its Answer would be due within thirty days. (Id. ¶ 26.) The notice was sent to Samaraneftegaz's corporate address at 50 Volzhsky prospect, Samara, 443071, Russian Federation. (Id.) Throughout the initial stages of the arbitration, the ICC continued to send notices to this address.[1] Samaraneftegaz does not dispute its receipt of these notices:

- February 7, 2006 letter: the ICC reminded Samaraneftegaz that its Answer would be due on February 22. (Id. ¶ 27.)
- February 15, 2006 letter: the ICC requested Samaraneftegaz's comments on Yukos Capital's proposal that the panel consist of a single arbitrator instead of three. (Id. ¶ 28.)
- February 28, 2006 letter: the ICC notified Samaraneftegaz that, since it failed to submit its Answer, Yukos Capital's Request would be submitted to the ICC Court to determine jurisdiction. The ICC also informed Samaraneftegaz that Yukos ...

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