In its April 13 statement, Ukraine’s state-owned energy company Naftogaz said that an arbitration court in The Hague ordered Russia to pay USD 5 billion in compensation for seizing Naftogaz Group’s assets in Ukraine’s region of Crimea that Russia had illegally annexed in 2014.
The Hague’s Arbitration Tribunal at the Permanent Court of Arbitration ruled in the company’s favor in the case on 12 April 2023, according to the statement.
“The Naftogaz team has won a key victory on the energy front. Despite Russia’s attempts to obstruct justice, the Arbitration Tribunal ordered Russia to compensate Naftogaz for losses of USD 5 billion. This relates to the seizure of our assets in Crimea by Russia in 2014. Russia must now comply with this decision in accordance with its obligations under international law,” commented Naftogaz CEO Oleksii Chernyshov.
Naftogaz said that the court had rejected Russia’s claims that Naftogaz is not entitled to any compensation for expropriating its assets, and found that compensation should be equal to the fair market value of the assets before Russia seized them. Also, the court ordered Russia to reimburse Naftogaz for costs associated with the arbitration proceedings.
“Arbitration awards can be executed through an enforcement mechanism. Therefore, if russia refuses to voluntarily execute the decision, pursuant to the 1958 New York Convention, Naftogaz 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,” Naftogaz wrote.
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