Tribunal opts for ‘costs follow the event’ principle and orders Russia to reimburse over 10.7 million USD to the claimant on account of arbitration and legal costs

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Tribunal finds no reason to add tax gross-up

Tribunal would have set interest in compliance with treaty provision for lawful compensation; absent an agreement of the parties on the point, tribunal finds 90-day SOFR average rate applicable

Mr Rowley proposes different percentages for the calculation of the assets’ FMV

Tribunal adopts weighted average of different valuation methods to define fair market value of expropriated investment, but splits on appropriate percentages

Tribunal analyses all valuation methods proposed by the parties to calculate fair market value of the expropriated assets

Tribunal sees further treaty breaches, but considers them irrelevant to decision on compensation

Respondent’s defences based on police powers doctrine and ECtHR’s notion of exceptional circumstances do not convince the tribunal

Claimant investment was discriminated against

No need for prior warning to meet due process requirement under international law, but measures must be motivated and subject to review

Respondent failed to prove public purpose of the expropriation

Absence of compensation is sufficient to breach BIT; compensation scheme provided under Russian law is not prompt, adequate, or effective

Russia acknowledges expropriation, but denies breach of BIT standard

Tribunal doubts that corruption in acquisition of shares may affect controlled company’s investment, but eventually dismisses respondent’s corruption objection for lack of evidence

Unclean hands doctrine prevents protection of investments tainted by corruption; circumstantial evidence is sufficient to uphold corruption claim

In addressing corruption allegations, tribunal dedicates extensive analysis to circumstances surrounding acquisition by investor’s main shareholder

Krymenergo had capacity to make an investment in Russia and hence qualifies as a protected investor

Cross-border requirement must be met at time of the alleged breach

Exchange of capital contribution for shares is sufficient to qualify as an active investment

Majority finds that Article 12 of the BIT does not require cross-border element, but merely refers to the time of the investment

Tribunal rejects argument that investment was ‘made’ at the time of annexation, and finds that Krymenergo acquired its assets within the temporal scope of the BIT

Tribunal ultimately rejects territorial objections, but splits on underlying reasoning

Relevant time for interpretation of the BIT’s territorial clause is moment when alleged expropriation occurred

Full tribunal rules that Russia’s interpretation is contradictory and breaches good faith principle

Object and purpose reinforces interpretation of territorial scope

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