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A testament of the potential of the French businessman Sergei Pugachev’s international arbitration claim launch amounting to $12 billion appeared to be the rapidly approved retaliatory bill proposal “On jurisdictional immunity of a foreign state and the property of a foreign state in the Russian Federation.”

The Russian newspaper ‘Novye Vedomosti’ [Translated ‘New Vedomosti’] reported that the prospect of the recovery of $12 billion from the Russian Federation on behalf of Pugachev’s claim award, and interim measures against the Russian Federation expressed in the arrest of the Russian assets in different jurisdictions, noticeably alarmed Russian parliamentarians. The lawmakers hastily approved the new bill proposal which states that the immunity of the foreign country on the territory of the Russian Federation could be restricted if Russia cannot fully exercise equal immunity on the territory of the foreign country in question. In other words, Russia would be able to arrest the assets of foreign countries located within its territory in response to a similar action in respect of its assets.

Notably, the bill proposal was approved just a couple of days after Pugachev filed a claim that is likely to be heard in the Permanent Court of Arbitration in The Hague, demanding to recover compensation from Russia amounting to $12 billion per expropriated assets in real estate development, shipbuilding, and the mining industry. Pugachev also stated: “We have spent a year to prepare these actions. The claim is about to be made in different jurisdictions. This is a standard law practice, and Russia’s assets will be frozen even before the court’s decision.”

Read the article in full (in Russian)

The article published by the Russian newspaper ‘Obschaya Gazeta’ [translated: General Newspaper] refers to the recent comment of the president of the Moscow Court of Arbitration Alexey Kravstsov saying that Pugachev stands a good chance to win his $12 billion compensation claim against Russia. Kravtsov stated that “the decision could be handed down as early as in six months”, and that “the court will hear the case though the prism of bilateral relations”. In fact, Pugachev’s notice of arbitration mentions violations of acting ‘Agreement between the Government of the USSR and the Government of the French Republic on the mutual promotion and mutual protection of investments’ by the Russian Federation.

The Russian experts unanimously agreed that not only presented objective evidence of the expropriation of Pugachev’s assets will play a favorable role in court, but also the deteriorating international political situation. Alexandr Shatilov, political scientist and the Dean of the Faculty of Sociology of the Russian Government’s Political Finance University stated that the international relations between Russia and the West “sharply deteriorated” after the annexation of Crimea.

Last month, in an interview with the Reuters, Sergei Pugachev stated that following the launch of the international arbitration claim, the next step is the implementation of interim measures against the Russian Federation, namely, arrest of Russia’s assets abroad. “We have spent a year to prepare these actions. The claim is about to be made in different jurisdictions. This is a standard law practice, and Russia’s assets will be frozen even before the court’s decision”, said Pugachev. Alexandr Shatilov agrees with Pugachev’s statement: “the decision of the arrest of Russia’s assets could be made outside of court”.

Read the article in full (in Russian)

The president of the Moscow Court of Arbitration, and a member of the Expert Council of the State Duma of the Russian Federation, Alexey Kravtsov, stated in an interview with the Russian newspaper ‘Argumenty i Facty’ [translated: Arguments and Facts] that Sergei Pugachev stands a good chance to win his $12 billion compensation claim against the Russian Federation.

Kravtsov highlighted that “the decision could be handed down in six months”. He also noted that the court may hear the case “though the prism of bilateral relations”:

“Any arbitral court belongs to its founders, in this case – to the Chamber of Commerce of the Netherlands, which, in turn, belongs to the state”.

The Reuters London bureau chief, and former Chief Political Correspondent for Reuters Moscow, Guy Faulconbridge, exclusively interviewed Sergei Pugachev on September 22, following the $12 billion International Arbitration Claim launch against the Russian Federation (read the immediate Reuters article here, watch Arbitration Claim launch Press Conference here).

Today, coinciding with the Russian President’s birthday, Reuters published an insightful piece, expanding on the original article:

“For Pugachev, the keys to the puzzle are Putin’s perceptions of his own personal safety, finding a successor and the clan battles over the spoils of a former superpower. “Until he finds a path to an arrangement which secures his safety, he will remain in power,” Pugachev said. “He no longer has confidence in his closest circle and if I were in his place I would not trust them either: What they say to his face and what they say when he is not there is completely different.”

Read the article in full here

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.