Russia to dispute arbitration court verdict on Ukrnafta lawsuit

Russia has not yet received the International Court of Arbitration’s ruling on the Ukrnafta lawsuit through the official diplomatic channels, but it plans to dispute the ruling at the Federal Supreme Court of Switzerland, RBC reported citing the Russian Justice Ministry.

“The Russian Federation plans to dispute the current decision and to use all the available legal protection mechanisms provided by international law and Swiss legislation,” the ministry said in a statement.

On 12 April, the International Court of Arbitration in Switzerland ordered the forced collection of $44.5 million from Russia for expropriating the property of the Ukrainian oil extraction company Ukrnafta in annexed Crimea, plus $3.5 million in arbitration costs and more than $5.5 million in interest on the compensation amount.

Swiss law allows for the ruling to be appealed at the Federal Supreme Court of Switzerland. The original ruling can be overturned only on limited grounds, such as an incorrect decision on jurisdiction, a violation of the principle of the equality of the parties, or incompatibility with Swiss “public order”.

“The Russian Federation did not participate in the consideration of the said lawsuit. It does not recognize the legitimacy of the issued decision, primarily in connection with the arbitration court’s lack of jurisdiction to consider the said lawsuit,” the Russian Justice Ministry remarked.

Russia disputed the court’s jurisdiction in the original case, but the court supported Ukrnafta.

The Ukrnafta case was the sixth to be ruled in favor of Ukrainian companies that are trying to obtain compensation for the “nationalization” of their assets in Crimea in the wake of its annexation in March 2014.

In May 2018, the Permanent Court of Arbitration in The Hague order Russia to pay $159 million to 18 Ukrainian companies, including some connected to Ihor Kolomoyskyi, for the illegal expropriation of their assets.

In November 2018, the State Savings Bank of Ukraine announced that it had been awarded $1.3 billion in an arbitration case against Russia.

In February 2019, The Hague’s arbitration court ruled in favor of Privatbank, the Sevastopol International Airport, and Kolomoyskyi himself. However, in these cases the court postponed the decision regarding the compensation amount.

Most recently, Naftogaz of Ukraine won a lawsuit at the end of February this year, although the compensation amount has not yet been determined in this case either.

  Russia, Ukraine, Ukrnafta, Switzerland, Europe