The recent announcement that the Russian Federation has decided to terminate its provisional application of the Energy Charter Treaty (ECT) has no consequences on Russia's obligations under the Treaty vis-a-vis existing investments in the field of energy in Russia.

According to Emmanuel Gaillard, Head of Shearman & Sterling LLP's International Arbitration Group and Counsel to the former majority shareholders of Yukos Oil Company in their ECT arbitrations against the Russian Federation, "while Russia is free to terminate its provisional application of the ECT under Article 45(3) of the Treaty, such termination has no consequences for the past and the protection accorded by the Treaty continues to be granted for 20 years to investments made in Russia prior to the termination of provisional application".

As regards the existing ECT claims, Tim Osborne, a director of GML Limited, the parent company of Hulley Enterprises Limited and Yukos Universal Limited, two of the three Claimants in the ECT arbitrations, notes that "it is for the Tribunal, not Russia, to decide on the extent of Russia's obligations towards investors in Yukos Oil Company under the ECT." Russia's withdrawal from the ECT has no impact on the pending arbitrations and Yukos' majority shareholders will continue to benefit from the protection granted to their investments in Russia.