On 8 June 2017, the Brussels Court of First Instance (the "Court") handed down a judgment on the legality of the seizures of assets belonging to Russia carried out by Yukos Universal Ltd ("YUL") in the context of the Belgian enforcement proceedings in the Yukos case.
The Yukos case refers to an arbitral saga that saw three arbitral tribunals issuing three arbitral awards which cumulatively ordered Russia, in 2014, to pay USD 50 billion as reparation for the irregularities committed during the nationalisation of the Russian oil company Yukos.
Following the issuance of the awards in 2014 in its favour, YUL (one of Yukos's former shareholders) sought the exequatur and the enforcement of the award in several countries, including Belgium. The Belgian exequatur of the award was granted to YUL in June 2015. In addition, YUL was also allowed to freeze and seize several key assets belonging to Russia and to two Russian press agencies (ITAR TASS and Ria Novosti).
Russia responded and started third-party opposition proceedings before the Court in which it challenged the legality of those seizures. Russia's claim was substantiated by the fact that the three awards in favour of Yukos' former shareholders had all been annulled by the District Court of The Hague (the Netherlands being the seat of the arbitration) in April 2016. Based on this judgment, Russia argued that the Belgian exequatur order which had initially been granted to YUL in June 2015 was null and void and YUL was thus not entitled to proceed with the seizure of Russia's assets.
In its judgment of 8 June 2017, the Court sided with Russia on this point.
The Court referred to Article 1494, Belgian Judicial Code, which provides that in order to proceed with a seizure, a creditor must rely on a valid enforcement order. In the case of arbitration, such a valid enforcement order includes not only the exequatur order but also the award itself. In the case at hand, however, the Court held that since the District Court of The Hague had annulled the award, this award was considered to have completely disappeared from the Dutch judicial order. In addition, the Court also held that the judgment given by the District Court of The Hague (which annulled the award in YUL's favour) had to be fully recognised in Belgium in application of a 1925 bilateral convention between Belgium and the Netherlands on the recognition and the enforcement of arbitral awards and judicial decisions.
Consequently, and without prejudice to the fact that the validity of the exequatur order had been confirmed a few months ago by the same court, the Court held that YUL could not rely on a valid enforcement order and proceed with the seizures since it lacked a valid arbitral award. The Court therefore ordered YUL to unfreeze all the assets which it had aimed to attach.
This judgment is controversial. The Court of First Instance dismissed, in December 2016, the third-party opposition filed by Russia against the exequatur order granted for the benefit of YUL. However, the same court (although a different judge) has now ruled that this order is not capable of enforcement, thereby depriving its judgment of December 2016 of any effectiveness. While the judgment of 8 June 2017 does not contravene the previous judgment of 9 December 2016 (which is under appeal), there is at least in spirit an incoherence between both judgments.
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