Kluwer Arbitration Blog
JKX vs. Ukraine: An Update on the Enforcement of Emergency Arbitrator’s Award
The Ukrainian “saga” on the enforcement of the SCC emergency arbitrator’s awardcontinues – the case is pending the second round of cassation review.
The arbitration proceedings were initiated by the Dutch and English investors OIL&GAS PLC and POLTAVA GAS B.V. (“JKX” or “Claimants”) on January 7, 2015. The case concerns the alleged Ukraine’s failure to comply with its obligations under the Energy Charter Treaty, the UK-Ukraine BIT (1993), and the Netherlands-Ukraine BIT (1994). On December 28, 2014, Ukraine enacted the Law on Tax Reform Amendments to the Tax Code of Ukraine and Other Legislative Acts. This law provides for the increase of royalty payments on gas production from previously applicable 28 per cent to 55 per cent. According to JKX, these provisions conflict with Ukraine’s obligations to ensure fair and equitable treatment of investments. JKX claims to suffer losses resulting from these violations and demands compensation in the amount of 270 million USD.