Ukrnafta won a payout of $44.4 million from Russia for seized assets in the Crimea

By an arbitral award dated 12 April 2019, the 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.

In April 2014, shortly after annexation of the AR Crimea by the Russian Federation, illegal armed forces of the aggressor state seized administrative offices and 16 petrol stations of PJSC Ukrnafta.

On 03 June 2015, PJSC Ukrnafta referred the dispute to an ad hoc arbitration tribunal, in accordance with the Arbitration Regulations of the United Nations Commission for International Trade Law (UNCITRAL).

By an award dated 26 June 2017, the arbitral tribunal found 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 16 October 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.

By an award dated 12 April 2019, the arbitral tribunal ordered the Russian Federation to pay PJSC Ukrnafta $44,455,012.00 in compensation for the expropriation of investments of PJSC Ukrnafta on the territory of AR Crimea, as well as more than USD 3.5 million in arbitration costs.

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.


Tags: gas, contracts, oil, hydrocarbon production, court, Ukrnafta

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