Yukos, Investment Round-Tripping, and the Evolving Public/Private Paradigms

American Review of International Arbitration, Vol 26 Nr. 3 (2015)

26 Pages Posted: 27 Mar 2016 Last revised: 21 Jun 2019

Date Written: November 2, 2015

Abstract

The 2014 Yukos arbitration awards were powerful illustrations of the benefits for investors of using investment round-tripping structures through offshore companies. The paradox is that such structures are now understood to be susceptible to misuse and targeted by global transparency initiatives. Investment round-tripping is at the crossroads of two opposing legal paradigms: the public law paradigm, which looks through corporate entities that are devoid of economic substance, and the traditional private law paradigm, which favors party autonomy and upholds the private ordering of investment structures. This article examines how these paradigms are evolving in contiguous legal disciplines that fall on opposite sides of the public/private divide (corporate law, tax, money-laundering regulations and investment arbitration). It advocates more adherence in investment arbitration to the public law paradigm, an evolution that would restrict access to the institution by round-tripping but cleaves more closely to the need for greater financial transparency.

Keywords: Investment arbitration, ISDS, Yukos, investment round-tripping, offshore companies, transparency

Suggested Citation

Nougayrède, Delphine, Yukos, Investment Round-Tripping, and the Evolving Public/Private Paradigms (November 2, 2015). American Review of International Arbitration, Vol 26 Nr. 3 (2015). Available at SSRN: https://ssrn.com/abstract=2754650

Delphine Nougayrède (Contact Author)

Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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