States Behaving Badly: Sovereign Veil Piercing in the Yukos Affair

57 Pages Posted: 14 Oct 2015 Last revised: 7 Nov 2015

See all articles by Brandon Rice

Brandon Rice

Duke University School of Law

Date Written: October 12, 2015


In July 2014, former shareholders in the now-defunct Yukos oil company won a historic $50 billion arbitration award against Russia. So far Moscow has shown no desire to comply voluntarily. The widespread embrace of the restrictive view of sovereign immunity and multilateral conventions on enforcement of arbitral awards should, in theory, make it easier for the award winners to collect their spoils in domestic courts all over the globe. Despite that, recalcitrant sovereign debtors remain able to stymie efforts to execute against state assets, and thus leave some litigants with a right but not a remedy. This Article details the how the Yukos shareholders may try to pry precious assets away from the Russian government and ultimately concludes that they are unlikely to come close to satisfying their record arbitral award. Therefore, this Article suggests courts recognize sovereignty as the legal fiction it is, which, hopefully, will empower judges to “pierce the sovereignty veil” and hold states like Russia to account.

Keywords: Yukos, Sovereign immunity, FSIA, SIA

Suggested Citation

Rice, Brandon, States Behaving Badly: Sovereign Veil Piercing in the Yukos Affair (October 12, 2015). Available at SSRN: or

Brandon Rice (Contact Author)

Duke University School of Law ( email )

Durham, NC
United States

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