Court in The Hague ordered Russia to pay $5 billion in compensation to a Ukrainian company

The Arbitration Tribunal at the Permanent Court of Arbitration in The Hague ordered the Russian Federation to pay the Ukrainian state energy company Naftogaz $5 billion. Voice of America.

Photo: IStock

The reason was the illegal seizure of assets in Crimea after the annexation of the peninsula by Russia in 2014.

The most significant damage to NJSC Naftogaz is the Black Sea shelf. In the annexed Crimea, the Russians "nationalized" 15 oil and gas fields, at least 3 promising hydrocarbon sites, writes Economic truth.

According to experts from the Ukrainian state-owned company, Ukraine missed the opportunity to develop fields with reserves of about 50 billion cubic meters of gas, 3,5 million tons of oil and 1 million tons of gas condensate.

After the annexation, the Russians continued to illegally use these deposits. The lion's share of the damage inflicted on the state-owned company is due to these losses.

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However, this is not the whole list of seized assets.

The lawsuit was filed in 2016, the decision in favor of Kyiv was made back in 2019 - only the amount of compensation remained uncertain.

“Despite Russia’s attempts to obstruct justice, the arbitration court ordered that the Russian Federation compensate Naftogaz for $5 billion in losses,” said Alexei Chernyshov, head of Naftogaz.

He clarified that now Russia "must comply with the decision in accordance with its obligations under international law."

Kremlin spokesman Dmitry Peskov reacted to the decision of the court in The Hague by saying that Russian experts will analyze its findings. After that, Moscow will decide on further actions.

“We need to analyze. Our experts involved in protecting Russia's rights in this case will analyze and make decisions on further actions," Peskov said.

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However, such arbitral awards can be implemented through the enforcement mechanism. And this is the path, apparently, that Naftogaz will have to go through.

“In the event that Russia refuses to voluntarily enforce the decision, in accordance with the 1958 New York Convention, to which Ukraine is a party, Naftogaz plans to begin the process of recognizing and admitting to enforcement of such a decision on the territory of those states where Russia’s commercial assets are located,” – emphasized in the press service of the company.

That is, in the near future, the search for property of the Russian Federation or Russian state-owned companies in other states will begin, its arrest and sale at auction to pay off the debt. The process is quite difficult and lengthy.

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