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.
