Naftogaz secures French court order granting leave to enforce $5 bln Crimea award against Russia
The Paris Judicial Court recognised and granted leave to enforce (exequatur) in France the $5 billion Crimea final award issued by an arbitral tribunal in The Hague against the Russian Federation.
Naftogaz, together with five companies of the Naftogaz Group, has secured a key legal victory in its global enforcement campaign.
"The French Court's decision is yet another significant milestone in our international legal strategy… This order by the French court recognizing and granting leave to enforce the final award enables Naftogaz to move forward with enforcement proceedings on French territory," explained Roman Chumak, CEO of Naftogaz Group.
According to the Group's press release, as part of this process, Naftogaz has already registered mortgages on several Russian state-owned assets located in France worth over EUR 120 million – first step towards enforcement of the award.
"Our team is pursuing every available legal avenue to enforce the award and ensure Russia is held accountable for its unlawful actions,” said Roman Chumak. “The decision to boost our enforcement strategy in this case was one of my first after assuming leadership of Naftogaz in December 2024. The French Court's decision is yet another significant milestone in our international legal strategy. We are grateful to Le 16 Law team and to our long-standing partner and lead counsel in the case – Covington and Burling, namely David Pinsky, Clovis Trevino and Paris Aboro," Chumak said.
"Naftogaz continues to coordinate enforcement efforts across multiple jurisdictions, with successful actions already underway in the United Kingdom and Finland. The company remains resolute in its efforts to recover the full value of the award and defend the rights of Ukraine's state-owned enterprises on the international stage," Chumak added.
The French proceedings are being led by Le 16 Law, a Paris-based dispute resolution boutique. The team is headed by partners Julie Spinelli and Alexandra Szekely, with support from associates Pauline Gadd, Carl Szymura, and Emma Ruby. The process of obtaining the exequatur order to enforce the final award was carried out pro bono by the Le 16 Law team.
The Group said that Naftogaz commenced arbitration proceedings against Russia in October 2016, seeking compensation for Moscow's seizure of its property in violation of a bilateral investment treaty between Ukraine and Russia. Naftogaz had been the leading player in the natural-gas industry in Crimea, active in gas exploration, production, transport, storage, processing, and distribution. The company's property included special permits for subsoil use; equipment and infrastructure; pipeline and gas-storage operation rights; ownership interests in gas pipelines; and over 675-million cubic meters of stored gas.
After a years-long arbitration, on April 12, 2023, a tribunal composed of Judge Ian Binnie, C.C., K.C., Dr. Charles Poncet, and Professor Dr. Maja Stanivuković and constituted under the auspices of the Permanent Court of Arbitration (PCA) in The Hague, ordered Russia to pay Naftogaz more than $5 billion for Russia's treaty violations. This award remains the largest to date among all investor-state claims brought by Ukrainian entities over Russia's unlawful actions in Crimea, the Group said.
The tribunal's damages award followed a partial award in which the tribunal found that it had jurisdiction to hear Naftogaz's claims and that Russia was liable for the expropriation of Naftogaz's property. While Russia initially declined to participate in the case, it later changed course, taking an active role in the damages phase. The hearing on damages took place in The Hague's Peace Palace, and it was ongoing at the time of Russia's full-scale invasion of Ukraine, in late February 2022.
The Supreme Court of the Kingdom of the Netherlands recently dismissed the cassation appeal of the Russian Federation to overturn the tribunal's partial award on jurisdiction and merits.
"Notwithstanding the tribunal's award and the Dutch Supreme Court's judgment, Russia has refused to pay Naftogaz the amount due. Naftogaz has therefore launched an international enforcement effort, seeking to enforce the award in countries where Russia holds assets," Naftogaz said.