International arbitration rules to recover $50 million from Russia for the expropriation of Ukrnafta assets in Crimea
The UN arbitration court ordered Russia to pay US 44.4 million dollars to the Ukrainian oil company Ukrnafta for the expropriation of property in Crimea, reported Ukrnafta’s press service in a statement published on the company’s website.
The focus of the dispute was administrative offices and 16 gas stations that were seized by Russia after the annexation off the Crimea.
On June 3, 2015, PJSC Ukrnafta referred the dispute to an ad hoc arbitration tribunal using the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).
Russia tried unsuccessfully to challenge the court’s jurisdiction, and, on April 12, 2019, the arbitral tribunal ruled in favor of Ukrnafta.
According to the decision of the arbitration court, interest on the amount of compensation will be calculated from April 22, 2014. As of April 2019, the interest accrued amounts to over US 5.5 million dollars. In addition, Russia must pay arbitration expenses in the amount of over US 3.5 million dollars.
As of summer 2018, Ukrnafta was in possession of 1,936 oil and 168 gas wells, three gas processing plants for the production of liquefied petroleum gas and stable condensate, 43 drilling rigs and a network of 537 gas stations (before the annexation of the Crimea and the war in eastern Ukraine there were 563 gas stations). The retail network was acquired from companies affiliated with the Ukrainian Privat group in 2003-2006 for US 547 million dollars based on the exchange rate of the time.