INTERVIEW WITH TIM OSBORNE, CEO OF GML (EX-YUKOS SHAREHOLDER) : RUSSIA BOUND BY ENERGY CHARTER TREATY.

Tim Osborne, CEO of GML, the main shareholder of the expropriated Yukos company, expects a decision soon on a case brought under the Energy Charter Treaty (ECT). GML is claiming some US$50 billion in damages from Russia for "illegal" expropriation. Osborne disputes Russian President Dmitry Medvedev's contention that Moscow is not bound by the ECT. At the EU-Russia summit, held on 21-22 May in the Far-Eastern town of Khabarovsk, Medvedev once again repeated his hostility to the ECT, to which over 50 countries are signatories(1)

Despite Russian objections, Osborne is hoping for a favourable decision from the international tribunal sitting under the auspices of the Permanent Court of Arbitration in The Hague. The tribunal is expected to give its decision soon - possibly before the summer. GML's argument is that Russia cannot unilaterally cancel its participation in the ECT without formal notice to other contracting parties. In all events, investments made in Russia during the period of provisional application would be afforded protection under the treaty for 20 years.a

Is Russia bound by the ECT?

That is the big question for the arbitration tribunal. Our view is that Russia is bound by the treaty. There are specific provisions that state that a country is bound if it signs and provisionally applies the treaty without opting out. The Russian Constitution also allows the executive to bind the country to international treaties on a provisional basis.a

When will the arbitration tribunal decide?

We do not know yet. As in most common law courts, there is no deadline. The tribunal will decide when ready and finished. But we do expect the decision fairly soon - sometime in the summer. But we have no idea how deliberations are going. This is a huge case.

Given the major interests behind the case, and the power of Russia, how can you expect a fair decision?