The International Court of Arbitration (Geneva) has ordered to pay $44.4 million by the Russian Federation in favor of public joint-stock company Ukrnafta as compensation for the seizure of the company’s assets in annexed Crimea.
“By an arbitral award dated 12 April 2019, Russian Federation has been ordered to pay PJSC Ukrnafta $44.4 million in compensation for expropriation of property of PJSC Ukrnafta in the Autonomous Republic of Crimea annexed by the Russian Federation,” the company said in a report.
Under the award, the Russian Federation is to pay interest on the awarded compensation from 22 April 2014. As of April 2019, the amount of interest accrued comprises more than $5.5 million.
As reported, in April 2014, shortly after annexation of Crimea by the Russian Federation, illegal armed forces of the aggressor state seized administrative offices and 16 petrol stations of PJSC Ukrnafta. In October 2014, PJSC Ukrnafta, following Part 1 Article 9 of the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the encouragement and mutual protection of investments (the agreement), informed the Russian Federation of violation of the rights of PJSC Ukrnafta. In light of the foregoing, following part 2 Article 9 of the agreement, on June 3, 2015, PJSC Ukrnafta referred the dispute to an ad hoc arbitration tribunal.
By an award dated June 26, 2017, the arbitral tribunal found Switzerland as jurisdiction to consider the dispute under the agreement.
The Russian Federation challenged said award to the Supreme Court of Switzerland, but the latter, by decision dated October 16, 2018, dismissed the claim of the Russian Federation. At the same time, the Supreme Court of Switzerland agreed with the arbitral tribunal that PJSC Ukrnafta is an investor under the Agreement, and the property of PJSC Ukrnafta in the territory of the AR Crimea comprises investments.
Ukrnafta is the largest oil producing company in the country. NJSC Naftogaz Ukrainy owns 50 percent + one share of Ukrnafta, a group of companies associated with former shareholders of PrivatBank holds about 42 percent of its shares.
