For the first time abroad: a court in Finland seized Russian assets in the case of Naftogaz's property in Crimea

The Helsinki District Court has seized certain Russian assets in Finland at the request of Naftogaz, the company said on October 28, UNN reports.

The Helsinki District Court granted the petition of Naftogaz of Ukraine and five other companies of the Naftogaz Group and seized certain assets owned by Russia in Finland. These are real estate and other assets estimated at tens of millions of dollars

This decision, Naftogaz noted, is part of the company's global strategy to "recover compensation for losses caused by the seizure of the Group's assets in the Autonomous Republic of Crimea in accordance with the decision of the Hague arbitration." 

"This is also the first publicly known successful seizure of assets outside Ukraine to enforce an arbitral award in cases involving claims by Ukrainian companies against Russia for the expropriation of property in the Autonomous Republic of Crimea in 2014. It is an intermediate step towards the actual recovery of assets in favor of Naftogaz Group," the statement said.

As Russia refuses to voluntarily pay Naftogaz the funds stipulated by the Hague judgment, we continue to use all available mechanisms to recover them. Today we are one step closer to restoring justice. At the same time, we are taking active steps to enforce the arbitral award in other target jurisdictions where Russian assets are located

Interest provided for non-payment of funds in accordance with the award, as specified, shall continue to accrue until the full payment of the award.

In Finland, Naftogaz Group is pro bono represented by attorneys Mikko Leppa and Tatu Jaarinen of HPP Attorneys with the support of Covington & Burling, which is acting as lead counsel in coordinating Naftogaz's international enforcement efforts.

For reference

In October 2016, Naftogaz and six other companies of the Naftogaz Group initiated arbitration proceedings (case PCA No. 2017-16) before the Arbitration Tribunal at the Permanent Court of Arbitration against the Russian Federation based on the agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the promotion and mutual protection of investments, also known as the Ukrainian-Russian investment protection agreement.

Naftogaz asked the Arbitration Tribunal to order Russia to pay compensation for violation of the investment protection agreement, in particular for the illegal expropriation of Naftogaz's strategically important energy investments, which became one of the main targets of the Russian Federation in Crimea in 2014.

In February 2019, the Arbitral Tribunal issued a partial award in favor of Naftogaz, confirming its jurisdiction over the case and finding that Russia had breached its obligations under the investment protection agreement by illegally expropriating Naftogaz's investments in Crimea. Therefore, the second stage of the arbitration proceedings involved determining the amount of compensation for the losses incurred by Naftogaz Group. In July 2022, the Hague Court of Appeal confirmed the jurisdiction of the Arbitral Tribunal in this case.

On April 12, 2023, the Arbitration Tribunal ordered Russia to pay $5 billion in compensation for the losses caused by the seizure of Naftogaz Group's assets in the Autonomous Republic of Crimea in 2014. The arbitral award was made after hearings to determine the amount of compensation, which ended in March 2022 amid Russia's full-scale invasion of Ukraine.