Ukraine’s state energy company Naftogaz has won an arbitration case against Russia, requiring the payment of $5 billion to Ukraine for losses caused by the seizure of Naftogaz Group’s assets in Crimea in 2014, Naftogaz revealed in a statement on Thursday.
According to a ruling by the Hague’s Arbitration Tribunal at the Permanent Court of Arbitration on Wednesday, compensation should be equal to the fair market value of Naftogaz’s assets before expropriation.
Meanwhile, Naftogaz said the court rejected Russia’s claims that ‘Naftogaz is not entitled to any compensation for the expropriation of its assets.’
In addition, the court also ruled that Russia must reimburse Naftogaz for costs associated with the arbitration proceedings.
However, if Russia refuses to voluntarily execute the decision, pursuant to the 1958 New York Convention, Naftogaz said ‘it has the right to initiate the process of recognition and admission to enforce the award in the territory of those states where assets of the Russian Federation are located.’
The dispute began in October 2016 when Naftogaz and six other companies in the Naftogaz Group initiated arbitration proceedings against Russia based on the Ukrainian-Russian Investment Treaty.
Naftogaz requested the court bind Russia to pay compensation for the violation of the treaty, including the illegal expropriation of strategically important Naftogaz energy investments, which Naftogaz said were among the main targets of Russia in Crimea in 2014.
