“9…The challenge was entertained notwithstanding the expiry of the 3 month period in which challenge could be brought. The Awards were set aside on what Yukos Capital contends were the flimsiest of grounds including, for instance, that Yukos Capital had been permitted to amend its claim and that one of the arbitrators had spoken at a major conference of which Yukos’ lawyers were co-sponsors.”
“Professor Stephan does not dispute that in the Yukos case serious irregularities occurred. The principal criticism concerns the criminal proceedings brought in the courts of general jurisdiction against the leading figures. But the arbitrazh court also failed to exercise a sufficient stringent review of the tax assessments. There are also grounds for concern as to whether the arbitrazh court overseeing the Yukos bankruptcy was sufficiently proactive in limiting the discretion of the receiver. But the Yukos case, in which the principal target, Mr Khordorkovsky was a prominent oligarch, involved the renationalization of critical energy resources carried out by administrative agencies acting on behalf of the Russian State, that renationalization being a central policy of the Putin administration.”
“(1) Entirely unsubstantiated tax demands were made, after Yukos had previously been given a clean audit by the tax authorities; and that those demands were pursued in such a manner as was intended to impede their discharge by Yukos. Thereafter, the tax demands were upheld by the Russian courts in proceedings which were grossly unfair and involved a manifestly improper application of Russian tax law; and any judge who found in favour of Yukos was summarily removed. Enforcement of the tax demands was then carried out in a manner intended not to maximise recovery, but to ensure that Yukos’ assets were transferred at the lowest possible price to Rosneft. This process included enforcing against Yukos’ critical production facilities first; the admission by the courts of manifestly unsubstantiated claims by Rosneft; and rigged auctions by the bankruptcy manager. All challenges by Yukos to these manifestly inappropriate acts were dismissed by the courts. (2) This needs to be put in the political context of the Russian Federation’s desire to re-nationalise strategic energy assets and to destroy Mr Khordorkovsky (who was a political opponent) so as to explain why these were not the ordinary application of Russian law and practice uninfluenced by executive interference, but that the Russian government procured each of the steps taken against Yukos Oil. (3) Against that background and in the light of the clear examples of interference by the Russian state in the judicial process, it is unthinkable that the Russian government would have allowed the Russian courts (or that the Russian courts would have dared) to uphold awards worth over US$400 million against Rosneft (i.e. the recipient of Yukos’ assets) in favour of, effectively, Yukos’ former shareholders, including Mr Khordorkovsky. On that basis, the court will be invited to infer that the Annulment Decisions were the result of a partial and dependent judicial process.”
“More generally, the Russian Arbitrazh Courts have, when adjudicating proceedings involving Yukos or companies associated with it, acted in a manner which demonstrates that the cases have not been decided in accordance with the relevant law and/or in a fair manner, but involved bias and/or deliberate misapplication of the law. It is to be inferred that there was, or was a real risk of, a similar bias and/or deliberate misapplication of the law against Yukos Capital (which was also a Yukos interest) in the case at issue. Yukos Capital shall rely on the examples set out in Annex 1.”
“The Judges of Russian Courts are susceptible to improper influences where significant state interests are, or are perceived to be, in issue, whether by way of indications made out of court to Judges (known colloquially in Russia as ‘telephone justice’ and decisions ‘to order’) or the tendency of Judges assigned to such matters to act in accordance with the perceived interests of the Russian Federation irrespective of the merits of the case.”
“Yukos Capital’s response is to assert that the Russian annulment decisions were reached by a partial and dependent process…Now, it is open, we accept, to Yukos to try to prove that assertion by reference to evidence about the annulment proceedings themselves, for example by saying that they did not get a fair hearing or that the judge was biased or that his reasoning was perverse. In principle, we accept that that would not be objectionable. But Yukos wants to pray in aid a very much wider contention that there was a concerted political campaign by the Russian state…”
“[112] Rosneft contended that the allegations made by Yukos Capital engage the Act of State principle. It submitted that the essence of the allegation requires the English court to adjudicate upon and call into question the legitimacy and legality of the acts of a recognised (and friendly) foreign state or government within its own territory, including the legitimacy and legality of the decisions of its courts. The allegation made is that all the events relating to the Yukos matter (for example, the tax claims, their pursuit through the Russian courts, the resulting judgments of the Russian courts, the enforcement of those judgments under Russian law in Russia by the relevant arm of the executive, the decisions of the Russian courts upholding that enforcement process, the auction of the YNG shares effected by the Russian state, and even extending, so it is alleged, to the Russian decisions annulling the Awards in this case) are part of a governmental and political campaign involving, it is effectively alleged, the expropriation of assets from Yukos by illegitimate and illegal means, arranged and directed by the Russian state or government.”
“(a) Whether the Defendant is issue estopped by the judgment of the Amsterdam Court of Appeal dated28th April 2009 from denying that the judgments of the Russian civil courts annulling the arbitral awards which are the subject of these claims were the result, or likely to be the result, of a partial and dependent judicial process… (c) The issues relating to Act of State / non-justiciability pleaded in the Defendant’s Rejoinder (on the assumption that the facts pleaded in the Claimant’s Reply are true) and whether paragraph 7(1) of the Claimant’s Reply should be struck out.”
“Every sovereign State is bound to respect the independence of every other sovereign State, and the Courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.”
“The principle that the conduct of one independent government cannot be successfully questioned in the courts of another…rests at last upon the highest considerations of international comity and expediency. To permit the validity of the acts of one sovereign state to be re-examined and perhaps condemned by the courts of another would very certainly “imperil the amicable relations between governments and vex the peace of nations”.”
“when it is made to appear that the foreign government has acted in a given way on the subject-matter of the litigation, the details of such action or the merit of the result cannot be questioned but must be accepted by our courts as a rule for their decision.”
“This Court will not inquire into the legality of acts done by a foreign government against its own subjects in respect of property situate in its own territory.”
“As a member of the family of nations, the Government of the United Kingdom (of which this court forms part of the judicial branch) observes the rules of comity, videlicet, the accepted rules of mutual conduct as between state and state which each state adopts in relation to other states and expects other states to adopt in relation to itself. One of those rules is that it does not purport to exercise jurisdiction over the internal affairs of any other independent state, or to apply measures of coercion to it or to its property, except in accordance with the rules of public international law. One of the commonest applications of this rule by the judicial branch of the United Kingdom Government is the well-known doctrine of sovereign immunity…For the English court to pronounce upon the validity of a law of a foreign sovereign state within its own territory, so that the validity of that law became the res of the res judicata in the suit, would be to assert jurisdiction over the internal affairs of that state. That would be a breach of the rules of comity. In my view, this court has no jurisdiction so to do.”
“As to the alleged act of state, it is necessary to consider what is meant by the expression “act of state”, even if it is not expedient to attempt a definition. It is an exercise of sovereign power. Obvious examples are making war and peace, making treaties with foreign sovereigns, and annexations and cessations of territory. Apart from these obvious examples, an act of state must be something exceptional. Any ordinary governmental act is cognisable by an ordinary court of law (municipal not international): if a subject alleges that the governmental act was wrongful and claims damages or other relief in respect of it, his claim will be entertained and heard and determined by the court. An act of state is something not cognisable by the court: if a claim is made in respect of it, the court will have to ascertain the facts but if it then appears that the act complained of was an act of state the court must refuse to adjudicate upon the claim. In such a case the court does not come to any decision as to the legality or illegality, or the rightness or wrongness, of the act complained of; the decision is that because it was an act of state the court has no jurisdiction to entertain a claim in respect of it. This is a very unusual situation and strong evidence is required to prove that it exists in a particular case.”
“A second version of “act of state” consists of those cases which are concerned with the applicability of foreign municipal legislation within its own territory, and with the examinability of such legislation – often, but not invariably, arising in cases of confiscation of property. Mr Littman gave us a valuable analysis of such cases…suggesting that these are cases within the area of the conflict of laws, concerned essentially with the choice of the proper law to be applied…”
“So I think that the essential question is whether, apart from such particular rules as I have discussed…there exists in English law a more general principle that the courts will not adjudicate upon the transactions of foreign sovereign states. Though I would prefer to avoid argument on terminology, it seems desirable to consider this principle, if existing, not as a variety of “act of state” but one for judicial restraint or abstention.”
“It would not be difficult to elaborate on these considerations, or to perceive other important inter-state issues and/or issues of international law which would face the court. They have only to be stated to compel the conclusion that these are not issues upon which a municipal court can pass. Leaving aside all possibility of embarrassment in our foreign relations (which it can be said not to have been drawn to the attention of the court by the executive) there are – to follow the Fifth Circuit Court of Appeals – no judicial or manageable standards by which to judge these issues, or to adopt another phrase (from a passage not quoted), the court would be in a judicial no-man’s land: the court would be asked to review transactions in which four sovereign states were involved, which they had brought to a precarious settlement, after diplomacy and the use of force, and to say that at least part of these were “unlawful” under international law.”
“This cannot be decided simply as a fact upon evidence: it calls, on the contrary, for adjudication upon the validity, meaning and effect of transactions of sovereign states.”
“These authorities illustrate the principle that an English court will recognise the compulsory acquisition law of a foreign state and will recognise the change of title to property which has come under the control of the foreign state and will recognise the consequences of that change of title. The English court will decline to consider the merits of compulsory acquisition. In their pleadings the appellants seek to attack the motives of the Spanish government and to question the good faith of the Spanish administration in connection with the enactment, terms and implementation of the law of the29 June 1983 . No English judge could properly entertain such an attack launched on a friendly state which will shortly become a fellow member of the European Economic Union.”
“Immunity ratione materiae is very different. This is a subject matter immunity. It operates to prevent the official and governmental acts of one state from being called into question in proceedings before the courts of another, and only incidentally confers immunity on the individual. It is therefore a narrower immunity but it is more widely available. It is available to former heads of state and heads of diplomatic missions, and any one whose conduct in the exercise of the authority of the state is afterwards called into question, whether he acted as head of government, government minister, military commander or chief of police, or subordinate public official. The immunity is the same whatever the rank of the office-holder. This too is common ground. It is an immunity from the civil and criminal jurisdiction of foreign national courts but only in respect of governmental or official acts. The exercise of authority by the military and security forces of the state is the paradigm example of such conduct. The immunity finds its rationale in the equality of sovereign states and the doctrine of non-interference in the internal affairs of other states: see Duke of Brunswick v. King of Hanover (1848) 2 H.L.Cas. 1; Hatch v. Baez, 7 Hun 596; Underhill v. Hernandez (1897) 168 U.S. 250. These hold that the courts of one state cannot sit in judgment on the sovereign acts of another… Given its scope and rationale, it is closely similar to and may be indistinguishable from aspects of the Anglo-American act of state doctrine. As I understand the difference between them, state immunity is a creature of international law and operates as a bar to the jurisdiction of the national court, whereas the act of state doctrine is a rule of domestic law which holds the national court incompetent to adjudicate upon the lawfulness of the sovereign acts of a foreign state.”
“[25] My Lords, this submission seeks to press the non-justiciability principle too far. Undoubtedly there may be cases, of which the Buttes case is an illustration, where the issues are such that the court has, in the words of Lord Wilberforce, at p938, “no judicial or manageable standards by which to judge [the] issues”… [26] This is not to say an English court is disabled from ever taking cognisance of international law or from ever considering whether a violation of international law has occurred. In appropriate circumstances it is legitimate for an English court to have regard to the content of international law in deciding whether to recognise a foreign law…Nor does the “non-justiciable” principle mean that the judiciary must shut their eyes to a breach of an established principle of international law committed by one state against another when the breach is plain and, indeed, acknowledged…”
“[135] Important questions of principle are raised by the highly unusual facts of this case. There is no doubt as to the general effect of the rule which is known as the act of state rule. It applies to the legislative or other governmental acts of a recognised sovereign state or government within the limits of its own territory. The English courts will not adjudicate upon, or call into question, any such acts. They may be pleaded and relied upon by way of defence in this jurisdiction without being subjected to that kind of judicial scrutiny. The rule gives effect to a policy of “judicial restraint or abstention”: see Buttes Gas and Oil v Hamer (No 3)[1982] AC 888 , 931F-934C per Lord Wilberforce…”
“[95] The better view is that, depending on the circumstances as a whole, the burden can be satisfied by showing that there is a real risk that justice will not be obtained in the foreign court by reason of incompetence or lack of independence or corruption. Of course, if it can be shown that justice ‘will not’ be obtained that will weigh more heavily in the exercise of the discretion in the light of all other circumstances.”
“[97] Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required. But, contrary to the appellants’ submission, even in what they describe as endemic corruption cases (ie where the court system itself is criticised) there is no principle that the court may not rule… [101] The true position is that there is no rule that the English court (or Manx court) will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence. That, and not the act of state doctrine or the principle of judicial restraint in Buttes Gas and Oil v Hammer (Nos 2 and 3), is the basis of Lord Diplock’s dictum in The Abidin Daver and the decisions which follow it. Otherwise the paradoxical result would follow that, the worse the system of justice in the foreign country, the less would it be permissible to make adverse findings on it.”
“In this case, none of the parties or amicus curiae have persuaded us that the grant of a patent by a sovereign is not an act of state…Therefore, assuming arguendo that the act of state doctrine applies, the doctrine would prevent our courts from inquiring into the validity of a foreign patent grant and require our courts to adjudicate patent claims regardless of validity or enforceability.”
“[86] It has been said that the grant of a national patent is “an exercise of national sovereignty” (Jenard Report on the Brussels Convention (OJ 1979 C59 pp 1, 36)), and the European Court has emphasised that the issue of patents necessitates the involvement of the national administrative authorities (Gesellschaft für Antriebstechnik mbH & Co KG v Lamellen und Kupplungsbau Beteiligungs KGCase C-4/03 [2006] ECR I-6509 (para 23)). But in England the foreign act of state doctrine has not been applied to any acts other than foreign legislation or governmental acts of officials such as requisition, and it should not today be regarded as an impediment to an action for infringement of foreign intellectual property rights, even if validity of a grant is in issue, simply because the action calls into question the decision of a foreign official.”
“[28] The acceptability of a provision of foreign law must be judged by contemporary standards. Lord Wilberforce, in a different context, noted that conceptions of public policy should move with the times: see Blathwayt v Baron Cawley[1976] AC 397 , 426. In Oppenheimer v Cattermole[1976] AC 249 , 278, Lord Cross said that the courts of this country should give effect to clearly established rules of international law. This is increasingly true today. As nations become ever more interdependent, the need to recognise and adhere to standards of conduct set by international law becomes ever more important. RCC Resolution 369 was not simply a governmental expropriation of property within its territory. Having forcibly invaded Kuwait, seized its assets, and taken KAC’s aircraft from Kuwait to its own territory, Iraq adopted this decree as part of its attempt to extinguish every vestige of Kuwait’s existence as a separate state. An expropriatory decree made in those circumstances and for this purpose is simply not acceptable today. [29] …A breach of international law of this seriousness is a matter of deep concern to the worldwide community of nations…Such a fundamental breach of international law can properly cause the courts of this country to say that, like the confiscatory decree of the Nazi government of Germany in 1941, a law depriving those whose property has been plundered of the ownership of their property in favour of the aggressor’s own citizens will not be enforced or recognised in proceedings in this country. Enforcement or recognition of this law would be manifestly contrary to the public policy of English law…International law, for its part, recognises that a national court may properly decline to give effect to legislative and other acts of foreign states which are in violation of international law: see the discussion in Oppenheim’s International Law, 9th ed (1992), vol I, (ed Jennings and Watts), pp 371-376, para 113.”
“[137] IAC accepts however that the normal rule is subject to an exception on grounds of public policy. The proposition which it accepts is that the exception applies if the foreign legislation constitutes so grave an infringement of human rights that the courts of this country ought to refuse to recognise the legislation as valid as a law at all: Oppenheimer v Cattermole[1976] AC 249 , 278, per Lord Cross of Chelsea. The proposition which it disputes is that the public policy exception extends to breaches of international law… [138] It is clear that very narrow limits must be placed on any exception to the act of state rule. As Lord Cross recognised in Oppenheimer v Cattermole[1976] AC 249 , 277-278, a judge should be slow to refuse to give effect to the legislation of a foreign state in any sphere in which, according to accepted principles of international law, the state has jurisdiction. Among these accepted principles is that which is founded on the comity of nations. The principle normally requires our courts to recognise the jurisdiction of the foreign state over all assets situated within its own territories: see Lord Salmon, at p 282. A judge should be slow to depart from these principles. He may have an inadequate understanding of the circumstances in which the legislation was passed. His refusal to recognise it may be embarrassing to the executive, whose function is so far as possible to maintain friendly relations with foreign states. [139] But it does not follow…that the public policy exception can only be applied where there is a grave infringement of human rights. This was the conclusion which was reached on the facts which were before the House in the Oppenheimer case. But Lord Cross based that conclusion on a wider point of principle. This too is founded upon the public policy of this country. It is that our courts should give effect to clearly established principles of international law… [140] As I see it, the essence of the public policy exception is that it is not so constrained. The golden rule is that care must be taken not to expand its application beyond the true limits of the principle. These limits demand that, where there is any room for doubt, judicial restraint must be exercised. But restraint is what is needed, not abstention, And there is no need for restraint on grounds of public policy where it is plain beyond dispute that a clearly established norm of international law has been violated.”
“[204] In the light of my conclusion that the “pure”
“[164] In the light of this evidence [Christopher Clarke J] concluded that he was “satisfied that, in this particular case, there is a significant risk that Mr Cherney will not obtain in Russia a trial unaffected by improper interference by state actors and that substantial justice may not be done” (at [260]). [165] A challenge to that conclusion was rejected on appeal. The Court of Appeal held that there was cogent evidence to support it. It referred to evidence of misuse of the criminal justice system as a tool of governmental policy (including “…the well-known proceedings against Mr Khordorkovsky of Yukos…” – at [62], of manipulation of the judicial process (“…the proceedings against Yukos and Mr Khordorkovsky provide one obvious example…” – at [64]) and of the government’s willingness to interfere in the judicial process in circumstances where it considers that national interests are engaged (“…it can be said with some justification that the Yukos case involved both what might be described as the re-nationalisation of strategic assets and the damaging of a political opponent…” – at [66]).”
“[29] I should make clear again, having regard to points made by Mr Malek, that the judge is not conducting a trial. It is not a situation in which he has to be satisfied on the balance of probabilities that facts have been established. He is in many instances seeking to assess risks of what might occur in the future. In so doing he must have evidence that the risk exists, but it is not and cannot be a requirement that he should find on the balance of probabilities that the risks will eventuate…”
“[166] …no allegation is pleaded against the sovereign state or its President as such. The substance of what is pleaded is the content of RA’s threat. Whereas it is pleaded that it was said that President Putin would or could cause BB’s interests to be expropriated, it is not alleged that RA was in truth the mouthpiece of President Putin, but merely that his known relationship with the Kremlin and with the President was such that BB believed that RA was in a position to work jointly with President Putin to further a common enterprise to the mutual benefit of the President and RA… [167] There is no allegation against the State, either as a necessary part of the tort of intimidation or for the purpose of obtaining a remedy against the Russian State, that the President or the State has already acted unlawfully or is about to do so. The ambit of the allegation is BB’s understanding of what RA was telling him and his interpretation of the risk involved if he ignored RA’s suggestion for the transfer of his interests in Sibneft…” [168] The facts alleged in this case therefore differ crucially from the facts before the court in R (on the application of Yukos Oil Co) v. FSA [2006] EW[HC] 2044 (Admin) in which the underlying issue involved the allegation that the assets of the company seeking listing had been wrongly expropriated by Russia. This was alleged as an accomplished fact necessary for the relief claimed. Whether it was true would have to be determined by the FSA and subsequently the court. [169] In the present case the allegations relating to the President and the Russian officials are simply deployed as part of the background against which RA’s threat is said to have been understood by BB to be coercive. Not only are these allegations not at the heart of the cause of action, they are collateral to the conduct giving rise to the tort. [170] The Act of State doctrine does not involve precluding the English courts from receiving evidence of this kind and evaluating its truth. In no sense can it be said that the English court is thereby trespassing on territory within the ambit of the exclusive sovereign jurisdiction of a foreign state. It is therefore unnecessary to consider the public policy submission in relation to this issue.”
“[98] It is to be observed that these authorities are concerned with the issue whether past conduct of the government of a foreign state has been unlawful and not whether future conduct would be unlawful if ever it took place. Thus in the Yukos Case it was an essential part of the claimant’s case that the corporate assets had in truth been wrongfully expropriated.”
“On the basis of Al-Koronky v Times Life Entertainment[2006] EWCA Civ 1123 para 42, Mr Popplewell [counsel for Mr Abramovich] accepted, at this level of authority, that potential conduct of a state in the future could not fall within the first principle because the principle only applied to acts which have already occurred. The second principle could in an appropriate case, however, apply to future acts.”
“[41]…He further submitted that the contents of the unidentified Sudanese lawyer’s advice amounted to a general attack on a foreign country’s judiciary which gave rise to an issue which, on grounds of comity, could not be entertained by the courts of this country. [42] For this last proposition Mr Shaw cited the otherwise unreported decision of Jeyaretnam v Mahmood (1992) The Times May 21, in which, for the purpose of an application to discharge an order for service on a defendant out of the jurisdiction, Brooke J (as he then was) declined to evaluate allegations of lack of independence or impartiality in the defendant’s home country of Singapore on the grounds that such allegations were not justiciable, in the same way as the allegations in Buttes Oil and Gas v Hammer[1982] AC 888 were held to be not justiciable. While we accept that any court is always reluctant to pass judgment on the judiciary of a foreign country in the context of jurisdictional disputes, we doubt if there is any general principle that the courts of this country will never do so in any context. First, as noted by Morland J in Skrine & Co v. Euromoney Publications Ltd [2001] EMLR 16, para 18(1) the Buttes Oil case concerned past transactions of foreign states, not the likely behaviour of judges in the future. Secondly, in the context of dealing with asylum-seekers it is frequently relevant to consider whether the courts of a foreign state afford any remedy against persecution, the risk of which is said to be a reason against returning the applicant to his home state. Thirdly, any such principle would not sit happily with cases decided in relation to the law of repressive regimes such as Nazi Germany…”
“If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a manner with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice”
“The class plaintiffs in the district court argue that the act of state doctrine is directed at the executive and legislative branches of foreign governments, and does not apply to judicial decisions. Although the act of state doctrine is normally inapplicable to court judgments arising from private litigation, there is no inflexible rule preventing a judgment sought by a foreign government from qualifying as an act of state. See Liu v. Republic of China, 892 F.2d 1419, 1433-34 & n.2 (9th Cir. 1989) (citing RESTATEMENT (SECOND) OF FOREIGN RELATIONS OF THE UNITED STATES § 41 cmt. D (1965) (“A judgment of a court may be an act of state”). There is no question that the judgment of the Philippine Supreme Court gave effect to the public interest of the Philippine government. The forfeiture action was not a mere dispute between private parties; it was an action initiated by the Philippine government pursuant to the “statutory mandate to recover property allegedly stolen from the treasury.”
“These statements [from Buttes Gas and this court in Kuwait Airways]give no support to the view that, where in a commercial context allegations are made against a state, not in relation to some sovereign act carried out in its own jurisdiction, but in relation to acts which affect the rights of a party under a commercial contract, that the court should exercise restraint to the extent of not being prepared to decide the same, at least without some indication from the executive that a decision will embarrass the diplomatic relations between the United Kingdom and the State. If a foreign state were an insured under an insurance contract the insurers cannot be precluded from alleging a fraudulent claim simply because that might embarrass the state. It cannot be any different if a state entity makes the claim and it is asserted that both the entity and the state owner were involved in the fraud.”
“By contrast, the litigation here involves no challenge to the validity of any act of state. With respect to Sharon’s alleged acts, no one is suggesting that these acts – by which Time claims Sharon condoned the massacre of unarmed noncombatant civilians – have validity in the sense that they cannot be attacked. All agree – Israel, the United States and the world community – that such actions, if they occurred, would be illegal and abhorrent. The issue in this litigation is not whether such acts are valid, but whether they occurred.”
“In every case in which we have held the act of state doctrine applicable, the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory. In Underhill v. Hernandez,168 U.S. 250, 254…holding the defendant’s detention of the plaintiff to be tortuous would have required denying legal effect to “acts of a military commander representing the authority of the revolutionary party as government, which afterwards succeeded and was recognized by the United States.”
“The short of the matter is this: Courts in the United States have the power, and ordinarily the obligation, to decide cases and controversies properly presented to them. The act of state doctrine does not establish an exception for cases and controversies that may embarrass foreign governments, but merely requires that, in the process of deciding, the acts of sovereigns taken within their own jurisdiction shall be deemed valid. That doctrine has no application to the present case because the validity of no foreign sovereign act is at issue.”
“a campaign against Yukos with the aim (in particular) of re-nationalising Yukos’ assets and destroying a political opponent”…“Entirely unsubstantiated tax demands…any judge who found in favour of Yukos was summarily removed…rigged auctions…All challenges to these manifestly inappropriate acts were dismissed by the courts…the political context of the Russian Federation’s desire to re-nationalise strategic energy assets and to destroy Mr Khordorkovsky (who was a political opponent) so as to explain why these were not the ordinary application of Russian law and practice uninfluenced by executive in[ter]ference, but that the Russian government procured each of the steps taken against Yukos Oil.”
“4. The doctrine is only engaged where the English Court is required to adjudicate upon the actions of the foreign sovereign by determining that they are invalid or by granting a remedy in respect of those actions. 5. The reason why the doctrine is limited in this way is that it is founded upon a principle of jurisdiction. By adjudicating upon the foreign sovereign’s actions in the way described, the English Court is arrogating to itself a jurisdiction over those actions: it is claiming to have authority to judge the foreign sovereign’s actions within his own territory and to grant remedies in respect of them. This is impermissible. 6. By contrast, the English court is not adjudicating upon the foreign sovereign’s actions (in the way described in 4 above) by receiving evidence as to what the sovereign in fact did and evidence that those actions were not justified by reference to the established law of the state, and making findings of fact to this effect (on the civil standard of proof). In doing this the English Court is not exercising any jurisdiction over the sovereign or his actions and the doctrine is not engaged.”
“[95] ….All three reasons were treated as having equal weight and Mr Rabinowitz correctly submitted that we are, therefore, now bound by authority to say that the act of state doctrine only applies to challenges to the validity of the act of state relied upon, unless there is subsequent higher authority to a different effect. [96] Nevertheless some caution may be appropriate. Lord Hope has, subsequently to A Ltd, in Kuwait Airways reiterated the traditional English law formulation that the court will not “adjudicate upon or call into question” acts of a foreign state within its own territory. If it were an essential part of an English litigant’s case that an act of state was “wrongful” whether by its own law or by international law, and if that was disputed by the other side, it could well be said that that argument (and any decision upon it) was indeed “adjudicating upon or calling into question” that act, even if it was not specifically alleged that the act was “invalid”
“[134] However, that comment [a reference to Berezovsky at [96]] does not alter the fact that the Court of Appeal held that it was bound to hold that “the act of state doctrine only applies to challenges to the validity of the act of state relied upon” and that I am equally so bound. In any event, I consider that it is important that the limits of the Act of State principle are defined with reasonable clarity. Limiting it to necessary challenges to the validity of an act does so. Extending it to cases where such validity is merely called into question, or to wider issues of legality or wrongfulness, makes it of a potentially broad and uncertain application. In this connection it is worth noting that the Act of State principle is a common law doctrine and does not exist in the civil law. Further, in a number of cases where it has been applied the same result can be reached through the application of ordinary rules of conflicts of laws - Dicey, Morris & Collins at para 5-045. [135] I accordingly hold that the “pure”
“the courts of one country will not sit in judgment on the acts of the government of another done within its own territory”
“the defendant’s claims to the funds would have required a holding that Cuba’s expropriation of goods located in Havana was null and void”
“rather than laying down or reaffirming an inflexible and all-encompassing rule in this case, we decide only that the judicial branch will not examine the validity of a taking of property within its territory by a foreign sovereign government, extant and recognised by this country at the time of suit, in the absence of treaty or other unambiguous agreement regarding controlling legal principles, even if the complaint alleges that the taking violates customary international law.”
“We will respect your territorial sovereignty. But there can be no offence if we do not recognise your extraterritorial or exorbitant acts.” [319] The second insight, however, is that, whether the sovereign acts within his own territory or outside it, there is a certain class of sovereign act which calls for judicial restraint on the part of our municipal courts. This is the principle of non-justiciability. It is or leads to a form of immunity ratione materiae…In essence the principle of non-justiciability seeks to distinguish disputes involving sovereign authority which can only be resolved on a state to state level from disputes which can be resolved by judicial means. [320] The third insight is that the rule whereby there is a principle of judicial restraint in so far as a sovereign acts within his own territory is only a prima facie rule. It is subject to certain exceptions… [323] We think that behind these three competing insights, which between them strive to produce a balanced answer to the conflicting needs of private rights, sovereign immunities and international relations, there is the constant theme of the role of universal, or at least generally accepted, principles of private and public international law…”
“[115] This conclusion on English public policy does not reflect an insular approach…In recent years, particularly as a result of French scholarship, principles of international public policy (l’ordre public véritablement international) have been developed in relation to subjects such as traffic in drugs, traffic in weapons, terrorism, and so forth…Similarly, there may be an international public policy requiring states to respect fundamental human rights…”
“6. In the skeleton argument put in on behalf of Rosneft, the claimants’ assertions of dishonest expropriation are described as a conspiracy theory. The three main elements of the expropriation allegation or conspiracy theory are, in my view accurately summarised in a very truncated form in paragraph 9 of the skeleton argument of Rosneft which reads as follows, with some omissions: “There are three main elements. First, it is alleged that a series of arbitrary purported tax assessments were issued against Yukos by the Russian tax authorities and that Yukos’s assets were then frozen by the Russian court preventing it from paying those tax assessments. Secondly, complaint is made about the conduct of the bailiff appointed by the Russian court and of the court itself in enforcing the tax liabilities. Thirdly, Yukos complains about the auction of its shares in YNG in respect of which it alleges that there are reasonable grounds to suspect, if not more, that there was a concerted plan to deprive Yukos of its interest in YNG by unlawful means.” 7. On the claimants’ case that plan involved the participation of officers of the Russian state and of the Russian courts. 8. The allegations are therefore, extremely serious ones and at their heart are allegations against various parts or emanations of the Russian Federation including its courts.” “There are three main elements. First, it is alleged that a series of arbitrary purported tax assessments were issued against Yukos by the Russian tax authorities and that Yukos’s assets were then frozen by the Russian court preventing it from paying those tax assessments. Secondly, complaint is made about the conduct of the bailiff appointed by the Russian court and of the court itself in enforcing the tax liabilities. Thirdly, Yukos complains about the auction of its shares in YNG in respect of which it alleges that there are reasonable grounds to suspect, if not more, that there was a concerted plan to deprive Yukos of its interest in YNG by unlawful means.”
“I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party.”
“[180] In order to reach its determination in the present case the court will not need to declare that the Annulment Decisions, or any other acts relied upon, were invalid or ineffective. [181] As Yukos Capital submitted, its case involves inviting the court to find only that – as a matter of fact – there was a co-ordinated activity aimed at re-nationalising Yukos’ assets which, in fact, involved the executive intervening in the judicial process. Whether such intervention was ‘valid’ or ‘invalid’, ‘lawful’ or ‘unlawful’, is not an issue which the court was required to decide. For the purpose of Yukos Capital’s case in these proceedings what matters is whether it happened. [182] Rosneft further submitted that even if the case does not “turn on” the issue of validity, nevertheless the allegations relied upon are in themselves non-justiciable. In this conection it stressed in particular the allegations made in relation to the “three main elements” of the campaign identified in the Yukos FSA case; namely, unwarranted tax assessments; the conduct of the bailiffs and the courts in enforcing those assessments which resulted in forced insolvency, and the rigged auctions. Even if no declaration of invalidity of these acts was sought, Yukos Capital’s case nevertheless involved an inquiry into and at least inferential determination of the legality of those acts. [183] This is very similar to the argument rejected by the Supreme Court in the Kirkpatrick case. There too it was said that findings would necessarily be made which bore on the legality of the acts of state. However, the Supreme Court made it clear that that was insufficient to engage the Act of State principle. The “factual predicate” was the need to rule upon that legality and to declare the act invalid or ineffective. [184] The irrelevance of legality/illegality to Yukos Capital’s case was well illustrated by the example that it would make no difference to its case if Russian law expressly permitted the executive to instruct the judiciary how to resolve cases of strategic importance. Despite that being the legal act of the executive, to do so would still offend against English principles of substantial justice. [185] Rosneft’s case is also contradictory. It acknowledges that the court can determine whether the Annulment Decisions were partial and dependent. If so, it must similarly have to acknowledge that Yukos Capital can support that case with examples of other partial and dependent decisions. However, inquiry into the subject matter of those other decisions (for example, the tax assessments) is apparently not permissible. So, Yukos Capital can seek to show that the court decisions relating to the tax assessments were partial and dependent, as borne out by the unwarranted nature of the tax assessments, but not invite the court to inquire into the tax assessments themselves. [186] For all these reasons I find the allegations concerning the campaign against Yukos Capital do not engage the “pure”
“Finally, I bear in mind (see para 76 above) the problem of an award perhaps improperly set aside in the country of origin. This is a delicate matter. However, it seems to me that it is not something which can be dealt with simply as a matter of an open discretion. The improper circumstances would, I think, have to be brought home to the court asked to enforce in such a way as either, in effect, to destroy the defence based on article V(1)(e) [of the New York Convention], or, which is effectively the same thing, to prevent an issue estoppel arising out of the judgment of the courts of the country of origin. In this connection see Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2)[1967] 1 AC 853 , 947 and Dicey, Morris & Collins, The Conflict of Laws 14th ed (2006), vol 1, rules 41 to 45.”
“As nations become ever more interdependent, the need to recognise and adhere to standards of conduct set by international law becomes ever more important.”
“It is now clear, if it was not before, that the judiciary cannot close their eyes to the need for a concerted, international response to these threats to the rule of law in a democratic society.”
“the finding that the annulment decisions were the result of a partial and dependent legal decision was both necessary and fundamental to the decision. That the Amsterdam Court of Appeal determined that issue in the context of a different legal question (i.e. by reference to Dutch public order) makes no difference.”
“1. Rosneft is estopped, by the decision of the Amsterdam Court of Appeal dated28 April 2009 , from denying that the decisions referred to in paragraphs 11 to 14 of Rosneft’s Amended Defence were the result of a partial and dependent judicial process. 2. Yukos Capital is not prohibited from alleging, and the Court is not prohibited from adjudicating, any of the issues raised by Yukos Capital’s Re-Re-Amended Reply on the grounds of Act of state and/or non-justiciability and/or comity.” Act of State: the jurisprudence