Hague’s Arbitration Tribunal at the Permanent Court of Arbitration passed a remarkable order on 12th April, imposing a compensation of $5 billion on Russia for accroaching the assets of Ukraine’s owned gas company Naftogaz in Crimea( annexed by Russia in 2014). The company’s assets in Crimea included machinery like Chornomornaftogaz, which could produce an immense quantity of gases from the black sea.
Naftogaz chief executive Oleksiy Chernyshov said the firm had “won a key victory on the energy front” over losses he said were caused by Russia’s 2014 annexation of the peninsula.
“Despite Russia’s attempts to obstruct justice, the arbitration tribunal ordered Russia to compensate Naftogaz for losses of $5 billion.
The Russian Government is bound to comply with this order to meet its obligations as per the International Treaties of Arbitration, mainly the New York Convention,1958.
The Russians have although previously denied fulfilling various obligations imposed by arbitration courts concerning Naftogaz, moreover, the present order of the Hague can be appealed. Since the order had no response from Russia or Russia’s Gazprom (GAZP.MM) and no written order was issued yet by Hague.
For the world, it’s a remarkable victory for Ukraine’s Resource Enterprises, and the company’s long debt default can be restructured with these orders being in motion, said Ash, an analyst at BlueBay Asset Management.
Naftogaz had filed the arbitration proceedings with six other companies within the Naftogaz group in October 2016, two years after Russia started a full-fledged invasion of the Crimean Peninsula. Russia’s actions and the war with Ukraine last year have brought immense criticism upon Russia and many countries including the EU and USA have imposed sanctions, to restrict trade and commerce.
Russia had been denying the claims and before this, they have also defied the orders of various arbitration courts, now the question is that if Russia refuses to pay the compensation amount then the Russian Federation assets will be targeted. Various high-profile Russian oligarchs owned superyachts and international assets are already targeted by the governments.
Swarnabh Saha, Bcom-LLB (H) Sem- 6, St. Xavier’s University , Kolkata
0 Comments