Russia ordered to pay Ukraine $5bn for assets seized in Crimea – Naftogaz CEO
Naftogaz. Photo via Depositphotos

A tribunal in The Hague has ordered Russia to pay Ukraine’s state energy firm Naftogaz USD 5 billion for illegally seized assets in Crimea, Naftogaz chairman of the board Oleksii Chernyshov announced on Thursday.

"Five billion dollars – this is the amount ordered to be paid by the arbitral tribunal at the Permanent Court of Arbitration in The Hague in favour of Naftogaz," Mr Chernyshov wrote on Facebook, adding that the money is compensation for the losses and lost property of Naftogaz in Crimea since 2014.

Founded in 1899, the Permanent Court of Arbitration in The Hague is considered to be the oldest international dispute resolution body.

Last year, Naftogaz’s previous CEO Yurii Vitrenko disclosed that the company demanded USD 10 billion with interest from Russia.

However, the arbitration ruled that the amount of compensation should be equal to the fair market value of Naftogaz's assets before they were expropriated.

The company points out that arbitration awards can be executed through a special enforcement mechanism.

"Therefore, if Russia refuses to voluntarily execute the decision, pursuant to the 1958 New York Convention, Naftogaz has the right to initiate the process of recognition and admission to enforce the award in the territory of those states where assets of the Russian Federation are located," Naftogaz said in a separate statement.

Naftogaz initiated the arbitration in October 2016 on the basis of the intergovernmental agreement between Ukraine and Russia on mutual protection of investments.

The tribunal recognised its jurisdiction in the dispute in February 2019, stating that Russia had illegally expropriated Naftogaz's assets in breach of its obligations under the investment agreement.