Russia Makes Arbitrability Argument in Appellate Opening Brief

Earlier this month, Russia filed its appellant brief challenging U.S. District Court for the District of Columbia's denial of its motion to dismiss. Notably, the brief was filed by David Riesenberg, newly with Pinna Goldberg, a French firm who opened a D.C. office earlier this year. David has previously represented Russia along with his colleagues from White & Case LLP in the proceedings in the District Court. 

Russia asked the Court to dismiss the long-stayed action to enforce the arbitral award against it claiming that it has never waived its immunity against jurisdiction. Russia now argues that the Court erred in refusing to dismiss the action because (1) it has not delegated the arbitrability review to the tribunal; and (2) even if it did, the District Court still had the obligation to independently decide "whether Respondent made a 'standing offer' to arbitrate under the [Energy Charter Treaty ("ECT")] and whether Petitioners were eligible offerees who could 'accept[]' any purported offer."

Specifically, Russia argues that it has delegated only the initial determination of arbitrability--and not the exclusive determination--to arbitrators. Russia points out that its interpretation that the delegated arbitrability review was non-exclusive is consistent with the approach of French, Dutch, and Canadian courts before which parallel ECT litigation against Respondent is pending. 

Russia then argued that even if petitioners were correct regarding the delegation of authority, the D.C. District Court still had an obligation to independently decide "some arbitrability questions" de novo as part of its review of the jurisdictional requirements of the Foreign Sovereign Immunities Act. In Russia's interpretation of Chevron Corp. v. Republic of Ecuador, 795 F.3d 200 (D.C. Cir. 2015), the court should have approached at least the following jurisdictional questions de novo: "(1) whether the treaty’s signatory made 'a standing offer' to arbitrate and (2) whether the offer was 'accepted' by a claimant from within the category of eligible offerees (e.g., 'all potential U.S. investors')." 

Russia explained that although its executive branch signed the ECT, its parliament chose not to ratify it, and thus "accepted only a limited commitment under the ECT’s Article 45(1) to apply the treaty 'provisionally … to the extent that such provisional application is not inconsistent with its constitution, laws or regulations.'”  According to the brief, "Respondent had not committed to applying the ECT’s arbitration provisions, [as] confirmed publicly in 2004 by the ECT Deputy Secretary General."

These arguments were rejected in November 2023 by the District of Columbia District Court, which explained in a lengthy opinion that ruling otherwise would "risk upending the global community's predominant mechanism for international commercial dispute resolution." The case had been pending before the District of Columbia court since 2014, and was subject to multiple stays pending Russia's attempts to annul the award in Dutch courts.

In the same month, the Commercial Court, King's Bench Division of the High Court of Justice of England and Wales rejected Russia's sovereign immunity arguments.