Russia refuses to recognize the jurisdiction of the court in Ukrnafta lawsuit

The Russian Federation refuses to recognize the jurisdiction of the Permanent Court of Arbitration in the course of PJSC (Public Joint-Stock Company) Ukrnafta’s lawsuit on the protection of its investments in connection with seizure of petrol stations in Crimea, as stated in the press-release of the court.

Russia has taken the same position with the lawsuits of the following companies: Stabil LLC, Kirovohrad Nafta, Crimea-Petrol, Pirsan, Trade-Trust, Elefteria, Satek PCF (Production and Commercial Firm), Rustel, Rubenor, Stemv Group and Novel-Estate (also on the seizure of petrol stations in Crimea).

“Russia stated that an agreement between the Government of Russia and the Cabinet of Ministers of Ukraine on the promotion and mutual protection of investments can’t serve as the basis for forming an arbitration tribunal to resolve the dispute. Also, Russia said that it doesn’t recognize the jurisdiction of the Permanent Court of Arbitration,” the statement reads.

In fact, the tribunal was formed without Russia’s participation. It includes the Presiding Arbitrator, Gabrielle Kaufman-Kohler, Marion Price Daniel (appointed by Ukrnafta and Stabil) and Professor Bridget Stern was appointed to ast as a competent authority on behalf of Russia. The first hearing took place on the 3rd of December 2015. On the 16-17th of December, Geneva was identified as the arbitration venue.

“On the 15th of January 2016, Ukrnafta and Stabil filed lawsuit claims. Russia failed to submit a statement of defense by the 15th of April—the deadline set in procedural schedule. On the 22nd of April 2016, the arbitration tribunal decided to continue both proceedings in accordance with Article 28 of the Implementing Rules of UNCITRIAL (United Nations Commission on International Trade Law) despite the fact that Russia failed to provide any objections on this case,” the court noted in its press-release.

On the 22nd of April 2016, the Arbitration Tribunal issued inquiries to the parties regarding the jurisdiction. The response to these inquiries is expected to be received no later than June 3rd. The hearing on jurisdiction matters was scheduled for July 11th.

As previously reported, Ukrnafta and Stabil’s lawsuits against Russia refer to the Implementing Rules of UNICITRIAL and an agreement on the 27th of November 1988 on the protection of investments between the governments of Russia and Ukraine.

Ukrainian businessman Ihor Kolomoyskyi also filed a lawsuit with the Permanent Court of Arbitration on protecting his investments in the Sevastopol International Airport Belbek, located in occupied Crimea. 

  Ukraine, Russia, lawsuits