Allahabad High Court: DY Chandrachud Appointed Russia Arbitrator Oschadbank Dispute

• Former Chief Justice of India D.Y. Chandrachud has been appointed as Russia's arbitrator in an investment treaty dispute brought by Ukrainian state-owned bank Oschadbank.
• The arbitration proceedings have been initiated under the 1998 Agreement between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments.
• Oschadbank claims to have suffered substantial losses to its assets and business operations in four Ukrainian regions: Donetsk, Luhansk, Kherson, and Zaporizhzhia.

The dispute concerns Oschadbank's assets and banking operations in four Ukrainian regions: Donetsk, Luhansk, Kherson, and Zaporizhzhia.

A significant development has taken place in the ongoing dispute between Oschadbank, a Ukrainian state-owned bank, and Russia over branch seizures under the 1998 bilateral investment treaty (BIT). Former Chief Justice of India D.Y. Chandrachud has been appointed as Russia's arbitrator on a three-member panel deciding Oschadbank's multi-million dollar claim. This marks a shift from Chandrachud's previous stance, where he had declined Russian arbitration requests. The dispute concerns Oschadbank's assets and banking operations in four Ukrainian regions: Donetsk, Luhansk, Kherson, and Zaporizhzhia. According to reports, Chandrachud had initially declined Russia's offer three times before eventually accepting the appointment.

The arbitration proceedings have been initiated under the 1998 Agreement between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments. This treaty, commonly referred to as the Russia-Ukraine BIT, was signed in Moscow on November 27, 1998, and entered into force on January 27, 2000. It provides protections for investments made by investors of one contracting state in the territory of the other and contains provisions allowing qualifying investment disputes to be submitted to arbitration. Notably, Ukraine terminated the treaty through legislation enacted in 2023, but the treaty still contains relevant protections for investments and disputes arising during its period of force. The present Oschadbank proceedings have been brought under this arbitration framework.

The appointment of Chandrachud as Russia's arbitrator has significant implications for future investment disputes between Russia and Ukraine, particularly in light of Ukraine's termination of the 1998 bilateral investment treaty. This development highlights the ongoing complexities in resolving investment-related issues between the two countries. The dispute also underscores the importance of understanding the arbitration framework established under the 1998 BIT, which remains relevant despite its termination. As lawyers and compliance officers, it is essential to monitor this situation closely and consider its implications for future investment disputes.

Lawyers and compliance officers should watch for the implications of this appointment on future investment disputes between Russia and Ukraine, particularly in light of Ukraine's termination of the 1998 bilateral investment treaty in 2023.

Source: Original reporting via [Source]