Oil

In the investment arbitration brought by Yukos shareholders against the Russian Federation, Hulley Enterprises Ltd., Yukos Universal Ltd., and Veteran Petroleum Ltd. v. The Russian Federation, Brattle Academic Advisor James Dow was retained as an expert on behalf of the Respondent to evaluate the US$ 114 billion damages claim. Professor Dow explained that this amount was excessive, contained numerous errors, relied upon a flawed methodology, and that it appeared reverse engineered to obtain a desired result. The Tribunal agreed, finding that “Claimants’ expert admitted at the Hearing that his DCF analysis had been influenced by his own pre-determined notions as to what would be an appropriate result.” Based on Professor Dow’s critique, the Tribunal found that “Claimants’ experts were of limited assistance to the Tribunal in its determination of Claimants’ damages,” and rejected the Claimant’s DCF model stating “…the Tribunal was persuaded by Professor Dow’s analysis of Claimants’ DCF model, and is compelled to agree that little weight should be given to it.”