Court seizes Russian assets in Finland at Naftogaz's request

The Helsinki District Court has granted a motion filed by Naftogaz of Ukraine and five other Naftogaz Group companies and seized certain assets owned by Russia in Finland. These are real estate and other assets estimated at tens of millions of dollars.

“This decision is part of Naftogaz's global strategy to recover compensation for damages caused by the seizure of the Group's assets in the Autonomous Republic of Crimea following the decision of the Hague Arbitration,” Naftogaz said.

The company notes that this is the first publicly known successful seizure of assets outside Ukraine to enforce an arbitral award in cases involving claims by Ukrainian companies against Russia regarding the expropriation of property in the Autonomous Republic of Crimea in 2014. The seizure is an interim step towards recovering assets in favor of Naftogaz.

“We are taking active steps to enforce the arbitral award in other target jurisdictions where there are Russian assets,” said Naftogaz CEO Oleksiy Chernyshov.

The interest provided for non-payment of funds following the arbitral award continues to accrue until the full payment of compensation under the arbitral award.

In October 2016, Naftogaz and six other companies of the Naftogaz Group initiated arbitration proceedings at the Arbitration Tribunal at the Permanent Court of Arbitration against the Russian Federation based on the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the Promotion and Mutual Protection of Investments.

Naftogaz asked the arbitral tribunal to order Russia to pay compensation for violation of the Agreement, in particular for the illegal expropriation of Naftogaz's strategically important energy investments.

In February 2019, the Arbitral Tribunal confirmed its jurisdiction over the case and found that Russia had violated its obligations. In July 2022, the Hague Court of Appeal confirmed the tribunal's jurisdiction in the case.

On April 12, 2023, the Arbitral Tribunal ordered Russia to pay $5 billion in compensation for damages caused by the 2014 seizure of Naftogaz's assets in the Autonomous Republic of Crimea.