As the head of the “Naftogaz” Group, Alexei Chernyshev, pointed out, on April 12, 2023, the arbitration tribunal at the Permanent Court of Arbitration in The Hague established the amount of compensation at 5 billion US dollars for damage caused by the seizure of company assets in the AR of Crimea in 2014, which primarily concerns structures “Chernomornaftogaz”.
To date, the amount of compensation established by this decision in PCA case No. 2017-16 is the largest ever awarded by an international arbitration tribunal as compensation for the seizure of commercial assets by Russia in Crimea, and Russia must also reimburse “Naftogaz” for the costs associated with this arbitration proceeding.
As “Naftogaz” clarifies in an official press release, arbitral awards can be implemented through enforcement, including on the territory of those states where the assets of Russia are located.
This proceeding was initiated in October 2016 by 6 “Naftogaz” enterprises on the basis of violation of the bilateral intergovernmental Agreement on the Promotion and Mutual Protection of Investments by Russia, the position of the applicants was presented by the lawyers of Covington & Burling LLP.
Oral hearings on issues of jurisdiction and responsibility were held in May 2018, and in February 2019 the tribunal ruled in favor of “Naftogaz”, which the aggressor began to appeal. Further, in July 2022, the Hague Court of Appeal confirmed the jurisdiction of the arbitration tribunal in the case, and now the arbitration has established the amount of compensation.
The aggressor may try to appeal against this decision in the Dutch courts, but this will not suspend its validity, and the prospects for such appeals, after the above position of these courts, are essentially “bleak” for the aggressor.
