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Ukraine’s Naftogaz claims $5 billion legal victory over Russia

The state-owned energy company says a court in The Hague has ruled in its favor regarding its former Crimea assets

Russia must pay Ukraine’s Naftogaz $5 billion in compensation for the energy firm’s assets in Crimea, the company announced on Thursday, citing a court ruling. The court in The Hague did not respond to written requests for comment from Bloomberg and Reuters.

The Ukrainian company described the supposed ruling by The Hague’s Arbitration Tribunal at the Permanent Court of Arbitration the day before as “a key victory on the energy front.” 

According to a statement published on the company’s website, the court found that the compensation should be “equal to the fair market value of Naftogaz assets” located in Crimea before the peninsula joined Russia.

Russia must now comply with the decision in line with its obligations under international law, the company added.

Kremlin spokesman Dmitry Peskov responded to the claim by saying that legal experts tasked with defending Russia’s interests in the case will analyze the court’s ruling and decide on further steps.

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Ukraine ready for talks on Crimea – FT

Naftogaz and five other Ukrainian oil and gas companies launched arbitration proceedings against Russia in October 2016. The hearings to determine the amount of compensation ended in March 2022, Naftogaz said.

At the time of writing of this article the case was still listed as pending on the official website of the Permanent Court of Arbitration.

Crimea became part of the Russian Federation as a result of a referendum in 2014 after the region refused to support the coup that overthrew Ukraine’s elected government. The EU, along with the US and a number of other countries, described the move as an “illegal annexation” by Russia and have since imposed progressively more harsh economic sanctions on Moscow.

In 2018, the Stockholm Arbitration court ordered Russia’s state-owned giant Gazprom to pay Naftogaz $2.6 billion after a four-year legal battle over gas supply contracts. Gazprom honored the ruling.

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April 13, 2023 at 06:40PM
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