On April 12, 2023, the Arbitration Tribunal at the Permanent Chamber of the Arbitration Court in The Hague ordered Russia to pay Naftogaz Ukraine $5 billion in compensation for losses caused by the expropriation of Naftogaz assets in Crimea in 2014. The amount corresponds to the value of the assets at the time of their illegal seizure by Russia. Moreover, the court obliged Russia to pay the costs of the proceedings of the Arbitration Court.
Russia claims that Ukraine has no right to compensation. And if Russia refuses to pay Naftogaz Ukraine the amount of damages, in accordance with the New York Convention of 1958, Naftogaz will begin the process of enforcement of the decision in those states where there are Russian funds.
Prehistory. In 1999, Ukraine and Russia signed the Agreement on the promotion and mutual protection of investments. Russia's actions against Crimea and the expropriation of Naftogaz's energy investments in Crimea are a violation of the agreement, which became the basis for Ukraine's appeal to the Arbitration Court in 2016. The hearings started at the Hague Court in 2018. In 2019, the Hague Court noted that the Russian Federation had indeed violated an international agreement and, accordingly, this case is under the jurisprudence of an international court.
In March 2022, the Hague Court determined the amount of compensation, and it is the highest of all previously determined by the Arbitration Court for the expropriation of Ukrainian assets in Crimea.
