Sergei Pugachev in an interview with the French newspaper Le Figaro

Photo credit: Sebastien SORIANO/Le Figaro

“According to Sergei Pugachev, in today’s Russia there is no justice or rule of law”, writes Isabelle Lasserre in the article published in the French newspaper Le Figaro.

Lasserre quoted Pugachev: “Today in Russia, there is no justice, no rule of law. The circle [of people] that surround Putin has completely changed. Former KGB officers have taken leading positions in government organisations, and the President has become a hostage through this situation. This explains the vast discrepancy between his words and deeds.”

Read the article in full (in French).

Bloomberg: Why Pugachev is suing Russia for $12 billion

The renowned author and journalist Leonid Bershidsky wrote today in his Bloomberg View column:

“…the story behind [Pugachev’s] litigation exposes the predatory, inept bureaucracy that now runs the enormous state sector of the Russian economy, and shows how the romance and ambition that once propelled the transition from communism to capitalism met its end.”

“The ex-millionaire’s descriptions of the political intrigue are vivid and believable: It was Sechin whom Khodorkovsky accused of appropriating his oil assets, which are now part of state-owned Rosneft, where Sechin is chief executive.”

Read the story in full here.

PRESS RELEASE: International Arbitration Claim Launch

Pugachev Files International Arbitration Against the Russian Federation Over Violations of the France-Russia Bilateral Investment Treaty with Estimated Damages of US$ 12 Billion

PARIS, France, September 22, 2015 – Mr. Sergei Pugachev, a French national and international businessman, has filed an international arbitration claim against the Russian Federation for damages estimated at US$12 billion citing violations of the country’s obligations under the France-Russia Bilateral Investment Treaty and international law. The complaint stems from the Russian Federation’s mistreatment of Mr. Pugachev and his investments, outright taking of several multi-billion dollar investments without paying any compensation, coercion of Mr. Pugachev to enter into transactions on unfavorable terms, threats to the security and wellbeing of Mr. Pugachev and his family, and sham criminal proceedings against him. The arbitration proceeding has been commenced under the 1976 Rules of the United Nations Commission on International Trade Law.

Mr. Pugachev’s claims relate to the Kremlin’s campaign and targeted strategy, since 2009, to strip him of his valuable investments without paying him any compensation whatsoever. Among the investments that the Russian Federation has taken are: (1) the Red Square 5 development project, which was authorized to build a major hotel and residential complex in Moscow; (2) the Shipyards, Russia’s biggest and most modern shipyards, which included the nation’s leading designer of icebreakers and builder of military ships and commercial vessels; (3) the EPK, a company that held the exploration and extraction license to develop one of the richest coalfields deposit in the world located in the Tuva region in Russia; and (4) Optik Trade, which owned and planned to develop land plots in the Moscow Region and the related Gribanovo development project. The Russian Federation also has instituted and pursued sham civil and criminal proceedings against Mr. Pugachev, with the expressed intent to ruin Mr. Pugachev and his family. The Russian Federation is using these unfounded proceedings as a basis for exporting its persecution and harassment of Mr. Pugachev to other jurisdictions, like the U.K. or Switzerland, which has inflicted additional harm on Mr. Pugachev. Those actions ultimately also resulted in the loss of investments in countries outside of Russia. All of this conduct is in breach of Mr. Pugachev’s rights under the France-Russia Bilateral Investment Treaty and international law. In addition, legal counsel is exploring the possibility of a claim also to be brought against Russia for violations of the European Convention on Human Rights as a result of the treatment of Mr Pugachev.

“Over the past few years, Russia has pursued a multi-pronged attack against me, my family, and my investments. I refuse to be intimidated by Russia’s tactics, and I look forward to having an international arbitral tribunal assess Russia’s conduct by applying international standards,” said Mr. Pugachev.

“Mr. Pugachev’s filing today should not come as a surprise,” added Mr. Edward G. Kehoe, of King & Spalding LLP, lead counsel to Mr. Pugachev in the international arbitration proceedings. “Russia’s conduct violates the Bilateral Investment Treaty’s guarantee of fair and equitable treatment and prohibition against unlawful expropriation with respect to French investors, among other protections.”

“Russia cannot continue its worldwide persecution of Mr. Pugachev with impunity. This international arbitration proceeding is intended to hold Russia to its international obligations under the Bilateral Investment Treaty”, said J. Michael McNutt, Senior Litigation Advisor to Mr. Pugachev.

Mr. Pugachev is not alone in highlighting Russia’s misconduct and its hostility towards foreign investors. At present, over ten (10) investment treaty arbitrations against Russia are pending. Most recently, an international arbitral tribunal ordered Russia to pay former shareholders of the OAO Yukos Oil Company approximately $50 billion in compensation for unlawful expropriation through a series of targeted measures taken between 2003 and 2007.

Mr. Pugachev’s notice of arbitration has been delivered to the Minister of Economic Development of the Russian Federation, as well as to Russia’s President, Minister of Finance, Minister of Foreign Affairs, and Minister of Justice of the Russian Federation. Upon appointment of the arbitrators to hear the case, the tribunal will establish a schedule for briefings and arguments on the merits.

Copies of the petition in English, as well as related materials, can be found on the ‘Litigation’ page at