Ukraine's Naftogaz starts enforced recovery of US$5 billion in compensation from Russia for losses in Crimea

Ukrainian state-run national oil and gas company Naftogaz and five companies of the group have filed a petition with a US court to confirm the decision of the Arbitral Tribunal at the Permanent Court of Arbitration in The Hague, which ordered Russia to pay US$5 billion (with interest) in compensation for Ukrainian losses and lost property in Crimea.

Source: Naftogaz’s press service

Quote: "This petition came about due to the fact that arbitral awards can be enforced through the compulsory enforcement mechanism. Therefore, under the 1958 New York Convention, Naftogaz has the right to start the process of recognising and enforcing the award in countries where the Russian Federation's assets are located," the company explained.

"Since Russia has not voluntarily paid Naftogaz the funds stipulated by the arbitration award, we intend to use all available mechanisms to recover these funds. We are currently working on this in the United States and other targeted jurisdictions," said Oleksii Chernyshov, CEO of Naftogaz Group.

Details: According to US law, confirmation of an arbitral award is mandatory unless the court finds that there is one of the limited grounds for refusing or withholding recognition or enforcement of an arbitral award set out in the New York Convention, Naftogaz added.

Meanwhile, the interest provided for non-payment of funds in accordance with the arbitral award continues to accrue until the full payment of compensation under the court decision.

Background: The Arbitral Tribunal at the Permanent Court of Arbitration in The Hague has ordered Russia to pay US$5 billion in compensation for losses and lost property of Naftogaz in Crimea since 2014.

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