"In spite Russia's attempts to obstruct justice, the Arbitral Tribunal ordered Russia to compensate Naftogaz for losses of USD 5 billion. It refers to the consequences of Russia's seizure of our assets in Crimea in 2014. Now Russia has to comply with this decision following its obligations under international law," commented Oleksiy Chernyshov, CEO of Naftogaz Group.
On April 12, the arbitral award was rendered following hearings to determine the amount of compensation, which ended in March 2022 amid Russia's full-scale invasion of Ukraine. The amount of compensation established by this award is the largest amount an International Arbitration Tribunal has awarded as compensation for Russia's expropriation of assets in Crimea.
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The Tribunal found that the recompence should equal the fair market value of Naftogaz's assets before the expropriation in 2014. Despite Russia's insistence that Naftogaz is not entitled to any compensation for confiscating its assets, the Tribunal disagreed with this assertion.
In addition, the court ruled that Russia should reimburse Naftogaz for the costs associated with the arbitration proceedings.
Arbitral awards can be enforced through the enforcement mechanism. Therefore, if Russia refuses to voluntarily implement the award, in accordance with the New York Convention of 1958, Naftogaz has the right to initiate the process of recognition and enforcement in the territory of those states where the assets of the Russian Federation are located.
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