Covington Files Lawsuit to Enforce Naftogaz’s $5B Award Against Russia
June 26, 2023
WASHINGTON–Covington filed a lawsuit on behalf of Ukraine’s state-owned oil and gas company, NJSC Naftogaz of Ukraine, and five of its subsidiaries in federal court in Washington, D.C., to enforce a $5-billion arbitration award won earlier this year against Russia, arising from the Kremlin's 2014 seizure of Naftogaz's assets in Crimea. Naftogaz is entitled to enforce the award in all countries that are signatories to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention.
“Naftogaz will enforce this award globally, and this action is just the company’s first step. The company intends to use all available means to recover the amount due if Russia fails to pay voluntarily,” said David Pinsky, lead counsel and a Covington international arbitration partner.
In October 2016, Naftogaz initiated international arbitration proceedings (PCA case No. 2017-16) before an arbitral tribunal sitting at the Permanent Court of Arbitration, in The Hague, following Russia's unlawful expropriation of the company's investments in Crimea. In the proceedings, filed under the bilateral investment treaty between Russia and Ukraine, Naftogaz sought compensation for the loss of its valuable oil and gas assets in Crimea.
Naftogaz won an award on jurisdiction and liability in February 2019 and a final award totaling over $5 billion in April 2023, the largest award to date against Russia in Crimea-related arbitrations.
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