The Paris court has granted permission for the enforcement (exequatur) of the Hague arbitration ruling ordering Russia to pay $5 billion in damages for the unlawful expropriation of Naftogaz Group’s assets in Crimea.
This was reported by Naftogaz.
“As part of this process, Naftogaz has already registered mortgages on several Russian state-owned assets located in France worth over EUR 120 million — a first step towards enforcement of the award,” the statement reads.
The French proceedings are being handled by the Paris-based dispute resolution law firm Le 16 Law. The team is led by partners Julie Spinelli and Alexandra Szekely, supported by junior lawyers Pauline Gade, Karl Shimura, and Emma Ruby. The process of obtaining court recognition and permission to enforce the final arbitration award was carried out entirely pro bono by the Le 16 Law team.
“Our team is pursuing every available legal avenue to enforce the award and ensure Russia is held accountable for its unlawful actions. The decision to boost our enforcement strategy in this case was one of my first after assuming leadership of Naftogaz in December 2024. The French Court’s decision is yet another significant milestone in our international legal strategy. We are grateful to Le 16 Law team and to our long-standing partner and lead counsel in the case – Covington and Burling, namely David Pinsky, Clovis Trevino and Paris Aboro,” commented Naftogaz acting CEO Roman Chumak.
He also noted that the Group has achieved success in several other jurisdictions, including the United Kingdom and Finland, and is determined to recover the full amount of compensation.
Background:
Naftogaz commenced arbitration proceedings against Russia in October 2016, seeking compensation for Moscow’s seizure of its property in violation of a bilateral investment treaty between Ukraine and Russia. Naftogaz had been the leading player in the natural-gas industry in Crimea, active in gas exploration, production, transport, storage, processing, and distribution. The company’s property included 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 of stored gas.
After a years-long arbitration, on April 12, 2023, a tribunal composed of Judge Ian Binnie, C.C., K.C., Dr. Charles Poncet, and Professor Dr. Maja Stanivuković and constituted under the auspices of the Permanent Court of Arbitration (PCA) in The Hague, ordered Russia to pay Naftogaz more than USD 5 billion for Russia’s treaty violations. This award remains the largest to date among all investor-state claims brought by Ukrainian entities over Russia’s unlawful actions in Crimea.
The tribunal’s damages award followed a partial award in which the tribunal found that it had jurisdiction to hear Naftogaz’s claims and that Russia was liable for the expropriation of Naftogaz’s property. While Russia initially declined to participate in the case, it later changed course, taking an active role in the damages phase. The hearing on damages took place in The Hague’s Peace Palace, and it was ongoing at the time of Russia’s full-scale invasion of Ukraine, in late February 2022.
The Supreme Court of the Kingdom of the Netherlands recently dismissed the cassation appeal of the Russian Federation to overturn the tribunal’s partial award on jurisdiction and merits.
Notwithstanding the tribunal’s award and the Dutch Supreme Court’s judgment, Russia has refused to pay Naftogaz the amount due. Naftogaz has therefore launched an international enforcement effort, seeking to enforce the award in countries where Russia holds assets.
