Naftogaz of Ukraine and its constituent companies have filed a lawsuit against Russia at the Permanent Court of Arbitration in Hague demanding compensation for the losses caused by the seizure of $5.2 billion of their assets in Crimea, Naftogaz announced in a statement.
The Naftogaz Group has asked the court to obligate Russia to pay back this amount. The court is expected to make a decision concerning the compensation amount no earlier than the end of 2020.
The court has already acknowledged that Russia has violated a number of the terms of the Investment Protection Agreement by expropriating Naftogaz’s assets in Crimea. The court has divided the case into two stages, and will determine the compensation amount in the second.
The Ukrainian company owned valuable energy assets in Crimea and was one of Russia’s primary targets when it confiscated Ukrainian assets after illegally invading and occupying the peninsula in 2014.
On 15 February 2016, Russia was sent an official written notice from Naftogaz of Ukraine and its subsidiaries concerning an investment dispute in the context of the bilateral agreement on mutual protection of investments between Ukraine and Russia.
Between 2017 and 2018, two disputes between Naftogaz and Russia’s Gazprom were arbitrated in Stockholm. In the end, Gazprom was ordered to pay Naftogaz $2.56 billion. Gazprom has appealed the decision. The Svea Court of Appeal has scheduled hearings for October 2019.