On 18 July 2014, an Arbitral Tribunal sitting in The Hague under the auspices of the Permanent Court of Arbitration (PCA) handed down a historic final award in the decade-long dispute opposing three majority shareholders of the now defunct Yukos Oil Company to the Russian Federation.

The amount of compensation ordered by the Tribunal is in excess of $50 billion. This is 20 times the amount of what is now the second largest award issued by an arbitral tribunal, in the dispute between The Dow Chemical Company and Kuwaiti Petrochemical Industries Company in 2013. The Tribunal also ordered the Russian Federation to reimburse $60 million in legal fees to the Yukos shareholders, or 75% of the fees they incurred in these proceedings.

The Yukos case was brought in 2005 under the dispute settlement mechanism of the Energy Charter Treaty (ECT) and according to the UNCITRAL arbitration rules. The Yukos shareholders claimed that Russia breached substantive provisions of the ECT through a series of abusive tax assessments which led to the winding up of the company and the appropriation of its assets by state-owned Russian enterprises including Rosneft and Gazprom.

An interim award was issued by the Tribunal in 2009 in relation to the issues of jurisdiction and admissibility. The Tribunal determined that it could hear the case contrary to Russia's argument that it was not bound by the ECT, which it had signed but not ratified. The Tribunal found that the ECT provisionally applied to Russia pending its entry into force on the application of its Article 45.

In its final award, the Tribunal considered whether Russia's nationalisation of the claimants’ investment in Yukos was a "legal expropriation" under Article 13(1) of the ECT. The applicable Article 13 criteria dictate that the expropriation should be: (a) in the public interest; (b) not discriminatory; (c) carried out under due process of law; and (d) accompanied by the payment of prompt, adequate and effective compensation. The Tribunal found that Russia did not conform to these requirements and was therefore liable under international law for breach of the ECT. The Tribunal declared that "Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction" and that "the primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets".

Russia has until January 2015 to comply with the award, after which interest will start to accrue. However it appears unlikely that it will do so voluntarily as it has since denounced the award as "politically biased". Despite the award being capable of limited review under the UNCITRAL rules, Russia may ask the Dutch domestic courts to find that the Tribunal's decision was based on an incorrect legal interpretation.

In order to enforce the award, the Yukos shareholders must now persuade some of the 150 countries which are signatories to the 1958 New York Convention to declare Russian assets in their jurisdiction capable of being seized. The shareholders will be further limited by national sovereign-immunity laws, which ensure that certain assets are diplomatically immune from attachment, so that they will only be able to seek enforcement against assets used for "commercial activity".

On 31 July 2014, in a separate case brought on behalf of all Yukos shareholders, the European Court of Human Rights (ECHR) awarded €1.9 billion in compensation, its largest award by a factor of 100.  The ECHR ruled that Russia had imposed unlawful penalties on the company and had unlawfully interfered with its rights under Article 1, Protocol 1 of the European Convention of Human Rights.