Procedural Posture and Factual Background

This document is an appeal judgment from the Civil Law Division of The Hague Court of Appeal in summary proceedings. The appellant, Gazprom International Limited, sought the annulment of a first-instance judgment that had denied its request to lift an executory attachment. The attachment was placed by the respondent, JSC DTEK Krymenergo, on Gazprom International's shares in Wintershall Noordzee B.V. DTEK sought to enforce a substantial arbitral award rendered in its favor against the Russian Federation, the second respondent on appeal.

Legal Issues on Appeal

The Court of Appeal addressed several key legal issues raised by Gazprom International. These included: (i) the formal validity of the attachment writ and its service; (ii) whether Article 435(3) of the Dutch Code of Civil Procedure (Rv) provides a legal basis for attaching the assets of a third party (Gazprom International) to satisfy a debt of the award debtor (the Russian Federation) based on an alter ego theory; (iii) whether DTEK's underlying claim for recovery against Gazprom International was summarily without merit, particularly under the applicable Russian law on piercing the corporate veil; and (iv) whether the attachment violated the Russian Federation's sovereign immunity from execution.

The Court's Analysis and Decision

The Court of Appeal dismissed all of Gazprom International's grounds of appeal and affirmed the lower court's decision. The Court held that any formal defects in the attachment writ or its service did not prejudice the appellant and thus did not warrant nullification. Critically, the Court found that the scope of Article 435(3) Rv is not limited to statutorily enumerated instances and can encompass situations where a third party is liable for a debtor's obligations, such as through abuse of rights or alter ego principles.

Regarding the merits, the Court determined that, for the purposes of summary proceedings, it was sufficiently plausible that Russian law (specifically Article 10 of the Russian Civil Code concerning abuse of rights) could provide a basis for piercing the corporate veil between Gazprom International and the Russian Federation. Therefore, DTEK's claim was not deemed summarily without merit.

On the issue of sovereign immunity, the Court applied customary international law, as reflected in Article 19 of the UN Convention on Jurisdictional Immunities of States. It concluded that DTEK had provided sufficient evidence to establish that the attached shares were used for 'other than government non-commercial purposes' under Article 19(c). Furthermore, the Court reasoned that state immunity from execution could be restricted where the underlying liability stems from violations of *jus cogens* norms, referencing the context of Russia's actions in Ukraine which led to the arbitral award. Consequently, the appeal based on immunity failed. The Court also found that the balance of interests favored maintaining the attachment to secure DTEK's ability to enforce its award.

Operative Part

The Court of Appeal affirmed the first-instance judgment, thereby upholding the attachment. Gazprom International was ordered to pay the costs of the appeal proceedings.

Jurisdiction

This Award from an ICSID Tribunal constituted under the North American Free Trade Agreement (NAFTA) resolves jurisdictional objections and the merits of claims brought by Espíritu Santo Holdings, LP and L1bre Holding, LLC against the United Mexican States. The Tribunal dismissed all of Respondent’s jurisdictional objections, affirming its competence to hear the claims. Respondent challenged jurisdiction on several grounds, including the Claimants' nationality, an alleged waiver of treaty rights, the legality of the investment, and the standing of one of the claimants. The Tribunal rejected the argument to pierce the corporate veil, holding that NAFTA’s plain text establishes nationality based on the place of incorporation, not the nationality of the ultimate owners. It also found that a Calvo-style clause in the investment vehicle's articles of incorporation constituted a waiver of diplomatic protection, not a clear and express waiver of the investor's direct right to arbitration. Finally, despite finding evidence of serious procedural irregularities in the granting of the underlying concession, the Tribunal concluded that Respondent’s acquiescence and participation in those acts estopped it from invoking illegality to defeat jurisdiction.

Merits and Decision

On the merits, the Tribunal, by a majority, dismissed all of Claimants' claims for breach of NAFTA Articles 1105 (Minimum Standard of Treatment), 1110 (Expropriation), and 1102 (National Treatment). The claims centered on the alleged unlawful suspension of a concession for a digital taximeter and ride-hailing system (the “L1bre System”) and the subsequent launch of a competing state-owned application (“Mi Taxi”). The Tribunal was not persuaded by the evidence that Respondent had suspended the concession, citing significant inconsistencies in the suspension letters proffered by Claimants and contradictory contemporary conduct by their representatives. Critically, the Tribunal found that Claimants failed to prove their L1bre System was technologically ready for full implementation in 2018. Expert evidence demonstrated that the system lacked a functional and tested backend server, a fatal flaw for a project of its intended scale. Consequently, the Tribunal attributed the failure of the investment to Claimants' own inability to deliver a viable project, rather than to any act of the State. The launch of Mi Taxi was also found not to constitute a breach, as Claimants held no right of exclusivity and the state-owned app was functionally different and not mandatory for taxi drivers.

The Tribunal ordered each party to bear its own legal fees and expenses. Based on the outcome, where Claimants succeeded on jurisdiction but failed entirely on the merits and on several procedural applications, the Tribunal allocated 60% of the arbitration costs to the Claimants and 40% to the Respondent. The operative part of the Award orders Claimants to pay Respondent USD 124,778.68, representing the difference in their respective contributions to the costs of the arbitration.