A three-week trial was held in early December 2025 before the 15th chambre correctionnelle of the Tribunal of Nanterre (France) regarding an attempted USD 22-billion fraud against TotalEnergies in relation to an international arbitration involving two Russian local authorities and a State entity[1]. This unusual case is a rare example of the diversion of international arbitration, and the consequences of such diversion. It illustrates the risk that this can pose and demonstrates the importance of companies monitoring procedures/due diligence to prevent its regulatory and institutional vulnerabilities from being exploited.
The dispute relates to a 1992 oil exploration agreement between Elf Neftegaz, the Russian subsidiary of French oil & gas company Elf Aquitaine (later acquired by TotalEnergies), and the Russian local authorities of Volgograd and Saratov. This agreement never entered into force and Elf notified its counterpart of the voidness of the contract. Nonetheless, in 2009 the Russian local authorities, together with the Russian company Interneft, initiated an arbitral proceeding on the basis of the arbitration clause contained in the 1992 agreement. The Russian parties sought more than USD 22 billion, alleging that Elf Neftegaz had failed to honor its contractual obligations. Other actions had been brought before French courts by André Guelfini, an intermediary used by Elf in the underlying deals.
TotalEnergies apparently discovered the existence of the arbitration after the fact and filed a complaint in 2011 for embezzlement, arguing that the proceedings were tainted by corrupted and orchestrated by André Guelfini. An information judiciaire was subsequently opened and charges brought include passive and active corruption of an international arbitrator, attempted fraud by an organized group, and various acts of collusion aimed at influencing the selection of arbitrators. The seven defendants include attorneys involved in the arbitration, the arbitrators appointed and an appointed administrator (administrateur judiciaire) of Elf Neftegaz. They are accused of having helped construct a tainted arbitral mechanism allegedly designed to legitimize an unfounded claim. Prosecution requested up to three-year imprisonment sentences, fines and prohibition to practice.
This extraordinary case highlights the regulatory challenges involved in the scrutiny of arbitration, an autonomous dispute resolution mechanism, and the difficulties of setting a boundary between procedural irregularities and potential criminal conduct. It can be argued that, in cases involving public entities, politically sensitive jurisdictions or troubled times (e.g. of geopolitical and legal transition), law enforcement can act as oversight.
It also underscores the compliance implications for companies operating in high-risk jurisdictions and the need to include arbitration-related risks into compliance programs, through due diligence on counterparties and intermediaries, a review of arbitration clauses and close monitoring of proceedings. It is also a reminder for arbitration practitioners to ensure scrutiny of the processes, especially in light of institutional instability and opaque business practices. Following this case, other arbitration proceedings have been scrutinized by French authorities to seek to identify shortcomings[2].
