Ukraine’s state-run energy firm NJSC Naftogaz Ukrainy claimed victory in a $5 billion arbitration dispute with Russia over assets seized following the Kremlin’s annexation of the Crimea peninsula.
(Bloomberg) — Ukraine’s state-run energy firm NJSC Naftogaz Ukrainy claimed victory in a $5 billion arbitration dispute with Russia over assets seized following the Kremlin’s annexation of the Crimea peninsula.
Naftogaz said Russia must pay the sum to cover losses from the expropriation of company assets including drilling rigs, gas transportation pipelines as well as its own fleet and administrative buildings, according to a statement citing a ruling at the Hague’s Permanent Court of Arbitration on April 12.
“The Naftogaz team has won a key victory on the energy front,” said Chief Executive Officer Oleksiy Chernyshov. “Russia must now comply with this decision in accordance with its obligations under international law.”
The route to actually getting the money will likely take years and may never be enforced. Russia hasn’t recognized international court rulings to pay tens of billions to the former owners of Yukos Oil Co.
Ukraine has lobbied its allies to seize sanctioned Russian assets and use them as compensation for the devastation of the war but confiscation on a large scale faces significant legal obstacles.
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Should Russia refuse to pay, Naftogaz has the right to start the process to take over some of its assets located abroad, according to the statement. The decision is the largest awarded by an international arbitration tribunal as indemnity for the seizure of assets by Russia in Crimea after the 2014 annexation, Naftogaz said.
Russia will analyze the decision, Interfax reported, citing Kremlin spokesman Dmitry Peskov. “Our specialists, who are engaged in protecting our rights in this case, will analyze and decide on further actions,” Peskov said.
The Hague tribunal said it has “no information for public dissemination” about the case.
–With assistance from Cagan Koc and Jeremy Hodges.
(Updates with Kremlin and court responses, starting in the seventh paragraph)
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