Russia appeals arbitration court’s Crimean assets ruling in favor of Ukraine

Russia has appealed the International Court of Arbitration’s ruling in favor of the Ukrainian companies Ukrnafta, Stabil, and others, concerning Crimean assets, the Russian Justice Ministry reported.

The appeal was submitted on 27 May to the Swiss Federal Tribunal.

“Firstly, the arbitrators ruled in favor of the plaintiffs without having established that the Crimean peninsula is Russia’s sovereign territory. Nevertheless, the tribunal concluded that Russia is responsible according to the provisions of the bilateral agreement between Russia and Ukraine. Secondly, the plaintiffs’ investments were acquired illegally, including through corporate captures and illegitimate privatization. The arbitration decision that protects such an investor cannot be recognized or implemented in countries with a developed legal system,” the Russian Justice Ministry said in a statement.

On 3 June 2015, Ukrnafta approached the arbitration court ad hoc in accordance with the arbitration regulations of the UN Commission on International Trade Law (UNCITRAL).

Russia tried unsuccessfully to appeal the court’s jurisdiction, and on 12 April 2019 the court ruled in favor of Ukrnafta, ordering the collection of $44.4 million for expropriation of property in Crimea. Interest will be calculated on the compensation amount, starting from 22 April 2014.

In summer 2018, Ukrnafta owned 1,936 oil and 168 gas wells, three gas refineries for producing liquefied hydrocarbon gas and stable condensate, 43 rigs and a network of 537 petrol stations (563 before the annexation of Crimea and the war in eastern Ukraine). The retail network was acquired from companies affiliated with the Privat Group between 2003 and 2006 for the equivalent of $547 million at today’s exchange rates.

  Russia, Crimea, Ukrnafta, Ukraine