Ukraine’s state-owned gas company Naftogaz Group received permission from Austria’s District Court of Vienna Inner City to seize Russian-owned properties worth about $139 million.
Naftogaz is attempting to enforce the $5 billion arbitral award against Russia for the illegal seizure of Naftogaz assets in Crimea, the company wrote in a press release on Monday.
To compensate Naftogaz for Russian crimes, an Austrian court authorized the seizure of over 20 Russian-owned properties in Austria, estimated to be worth more than €120 million ($139 million) that will be sold at auction.
Dorda, an Austrian law firm, represents Naftogaz in the enforcement process. The legal team includes Alexander Karl, Robert Keimelmayr, and Teresa Stingl.
Naftogaz steps up chase for $5 billion Russian assets after arbitration victory
The enforcement in Austria forms part of Naftogaz’s broader international strategy to recover compensation for Russia’s seizure of its assets in Crimea, which remains under Russian occupation since 2014. “Another practical step toward recovering more than $5 billion from Russia for the unlawful seizure of Naftogaz Group’s assets in Crimea. Similar actions are also ongoing in other jurisdictions. Sooner or later, Russia will pay for everything. Without fail,” the press release quoted Naftogaz CEO Sergiy Koretskyi.
Naftogaz launched arbitration proceedings in 2016, in respect of its property in Crimea: special permits for subsoil use, equipment and infrastructure, pipeline and gas-storage operation rights, ownership interests in gas pipelines; and over 675-million cubic meters (24-billion cubic feet) of stored gas.
The claim was based on a bilateral investment treaty between Ukraine and Russia under which the company widely operated in Crimea’s gas sector before the annexation, the release says.
On April 12, 2023, a tribunal under the Permanent Court of Arbitration (PCA) in The Hague ordered Russia to pay Naftogaz more than $5 billion for Russia’s treaty violations.
The tribunal confirmed its jurisdiction and found Russia liable for expropriating Naftogaz’s property. The Supreme Court of the Netherlands later rejected Russia’s attempt to overturn this decision.
“This award remains the largest to date among all investor-state claims brought by Ukrainian entities over Russia’s unlawful actions in Crimea,” Naftogaz wrote in the press release.
Despite the ruling, Russia has refused to pay the award. In response, Naftogaz launched an international enforcement effort, seeking to enforce the award in countries where Russia holds assets, the press release says.
In June, Naftogaz Group won $1.37 billion in arbitration against the Russian gas giant Gazprom, another lawsuit where Gazprom violated its contractual obligations under the “take or pay” principle by halting payments.
Naftogaz is not the only Ukrainian company that succeeded in seizing Russian assets in other countries. Ukraine’s state-owned Oschadbank seized Russian assets in France worth approximately €87 million ($99 million) as a part of an award of damages in Ukraine’s favor following Russia’s expropriation of the bank’s assets in annexed Crimea.
“Russia understands that after France published its decision to [seize] the assets and Oschadbank obtains them, it will become a precedent for other countries,” the bank’s supervisory board member Roza Tapanova told Kyiv Post during a meeting with reporters in Kyiv.