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Aequo and Covington & Burling Successful for Naftogaz in Investment Arbitration Against Russia

Aequo and Covington & Burling Successful for Naftogaz in Investment Arbitration Against Russia


Aequo and Covington & Burling have successfully represented NJSC Naftogaz of Ukraine, and its subsidiaries Chornomornaftogaz, Ukrtransgaz, Likvo, Ukrgazvydobuvannya, Ukrtransnafta, and Naftogaz Group, in an international arbitration against the Russian Federation. 

The dispute is based on Russia's purported breach of the Ukraine-Russia bilateral investment treaty by expropriating Naftogaz group’s assets in Crimea. 

The arbitral tribunal sitting at the Permanent Court of Arbitration in the Hague concluded that Russia unlawfully expropriated Naftogaz’s assets in Crimea valued at USD 5 billion (plus interest) in violation of the country's obligations under the bilateral investment treaty. The tribunal also confirmed that it had jurisdiction under the bilateral investment treaty to hear the dispute, and that Russia’s obligations under the treaty extend to the territory it now unlawfully occupies in Crimea.

According to Covington & Burling, Naftogaz initiated the case in October 2016. A hearing on jurisdiction and liability was held in May 2018. Now that jurisdiction and liability have been determined, there will be a further phase of the proceedings to determine the amount of compensation owed to Naftogaz.

Aequo Partner Pavlo Byelousov declared that, “this historic victory is of great significance to Ukraine, which further empowers other Ukrainian and foreign investors to protect their interests and assets targeted by the Russia’s occupation of Crimea.” 

In addition to Byelousov, the Aequo team included Partner Denis Lysenko, Counsel Myroslava Savchuk, and Associates Ksenia Koriukalova, Oleksandr Zablotskyi, and Roman Hryshyn-Hryshchuk. 

Covington’s team consisted of New York-based Partner David Pinsky, Special Counsel Erin Thomas, and Associates Josh Picker, Daniel Allman, Paris Aboro and Alex Gudko. The team in Washington D.C. consisted of Partner Marney Cheek and Associate William Lowery. London-based Partner Jeremy Wilson was also involved in the arbitration process. 

Ukraine Knowledge Partner

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com


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