WASHINGTON—A team of Covington lawyers has obtained a $267 million damages award in The Hague on behalf of client JSC DTEK Krymenergo in an international arbitration against the Russian Federation. DTEK was the largest electricity distributor in Crimea before the peninsula was unlawfully occupied and annexed in 2014.
The arbitral tribunal, chaired by Juan Fernando Armesto, issued its award in the case on November 1, 2023. The tribunal ruled that it had jurisdiction to hear the claim, found Russia liable for each of the violations alleged by DTEK, and ordered Russia to pay approximately $267 million in damages and pre-award interest to DTEK Krymenergo. Russia was also ordered to pay costs, including DTEK Krymenergo’s attorneys’ fees, totalling approximately $10 million.
In 2018, Covington initiated the international arbitration against Russia under the 1976 UNCITRAL Rules on DTEK Krymenergo’s behalf, after the Russian-backed Crimean authorities ordered the seizure without compensation of the company’s Crimean assets in January 2015. The arbitration claimed breaches of numerous articles of the 1998 bilateral investment treaty between Russia and Ukraine, in particular its prohibition on uncompensated expropriations.
The Covington team was led by partners Marney Cheek, Jonathan Gimblett and Nikhil Gore. The team also included Clovis Trevino, Ariel Rosenbaum, Volodymyr Shkilevych, Minwoo Kim, Amanda Tuninetti, Lisa Ann Johnson and Alex Gudko.
Jonathan Gimblett commented: “We are proud to have helped DTEK achieve today’s result – Russia’s brazen breach of its obligations must have consequences.”
Marney Cheek said: “Today’s ruling marks another milestone in holding Russia accountable for its expropriation of Ukrainian investments in Crimea.”
Covington’s comprehensive victory on behalf of DTEK Krymenergo comes just months after the firm secured an approximately $5 billion award against the Russian Federation on behalf of Ukraine’s state oil and gas company, Naftogaz. The matter also relates to the expropriation of Crimea-based assets by Russia in connection with its unlawful occupation of the peninsula.
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