The High Court of Justice of England & Wales upheld a Dec. 5 decision to require Russia to compensate Ukraine’s largest energy company, Naftogaz, $5 billion (including interest) for seizing the company’s assets in Crimea in 2014.

The interest for non-payment of funds will continue to accrue until the full amount is paid, Naftogaz states.

According to a press release the compensation – which is to claimants Naftogaz and five other companies in the Naftogaz Group – Is “the largest yet issued in the various arbitrations brought by Ukrainian investors who had assets confiscated by Russia in Crimea” to date.

“Since Russia refuses to pay the amounts owed under the award, we continue to leverage all available mechanisms to recover these funds in target jurisdictions hosting Russian assets,” said Naftogaz Group CEO Oleksiy Chernyshov.

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However, the court decision does not automatically grant Naftogaz the amount recognized by the court, as the legal mechanisms currently do not allow the transfer of frozen Russian assets to Ukraine, and Russia has thus far refused to pay Naftogaz for the damages.

The court decision is the latest success in Naftogaz’s strategy to recover the losses caused by Russia through a series of arbitrations worldwide.

The arbitration started in October 2016 when Naftogaz, alongside other companies in the Naftogaz Group, initiated arbitration proceedings against Russia that included the “illegal expropriation of strategically important Naftogaz energy investments” in Crimea.

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The Permanent Court of Arbitration in The Hague ruled in Ukraine’s favor in February 2019. In April 2023, the court ordered Russia to pay Naftogaz $5 billion over the asset seizure in Crimea, a decision Chernyshov hailed as “historic” in an exclusive Kyiv Post interview.

In June 2023, Naftogaz filed a motion to the United States District Court for the District of Columbia to recognize the award by the Arbitral Tribunal of the Permanent Court of Arbitration at The Hague, where Russia is due to appear before the court on Feb. 23, 2024, on the eve of the second anniversary of its illegal full-scale invasion of Ukraine.

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