Russia must pay $44 mln to Ukrnafta for expropriation of investments in Crimea - Swiss Supreme Court

On December 12, 2019, the Supreme Court of Switzerland rejected the Russian Federation’s appeal to cancel the international arbitration decision in favor of PJSC Ukrnafta.

The press service of Ukrnafta released a relevant statement on December 18.

“On April 12, 2019, an international arbitration tribunal ordered the withdrawal of more than USD 44 million in favor of Ukrnafta from the Russian Federation as compensation for the expropriation of Ukrnafta's investments in the Autonomous Republic of Crimea. In May 2019, the Russian Federation appealed to the Supreme Court of Switzerland, requesting that this decision of the international arbitration is overturned. On December 12, 2019, the Supreme Court of Switzerland dismissed the appeal of the Russian Federation,” reads the statement.

In addition, the Swiss Supreme Court ordered the Russian Federation to pay PJSC Ukrnafta 155,000 Swiss francs.

Ukrnafta has stated it expects that the Russian Federation will respect the final ruling of the Supreme Court of Switzerland and “show civility in executing at least this decision” 

The decision of the Supreme Court of Switzerland of December 12, 2019 is final and is not subject to appeal, the press service added.

The company also reminded that the ruling of the International Arbitration Court, which Russian Federation asked to abolish, placed the responsibility on the Russian Federation for the actions of the armed formations, which in April 2014 carried out a forceful seizure of the administrative office and filling stations of Ukrnafta in the Autonomous Republic of Crimea, and after which the investments of PJSC Ukrnafta were formally expropriated by the occupation authorities established by the Russian Federation in the Crimea after the annexation. 

Ukrnafta noted that earlier the Supreme Court of Switzerland had left without satisfaction the appeal of the Russian Federation to cancel the ruling of the international arbitration court on its jurisdiction to consider a dispute between Ukrnafta and the Russian Federation.

PJSC Ukrnafta is the largest oil production company in Ukraine. The company’s share in the total production of oil and gas condensate in Ukraine in 2018 was 63.6%, in the total gas production - 5.5%. As of January 1, 2019, Ukrnafta had 85 permits for hydrocarbons extraction (commercial development of reserves).

The company is 50%+1 share owned by Naftogaz of Ukraine, a fully state-owned holding company.

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