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Naftogaz files US legal action against Russia to recover 5 billion dollars award in The Hague

Ukrainian state-owned energy company, Naftogaz, together with its five subsidiaries, has filed a motion to the United States District Court for the District of Columbia to confirm the earlier award by the Arbitral Tribunal of the Permanent Court of Arbitration at The Hague that bound Russia to pay Naftogaz five billion dollars (including interest) in compensation (23 June).

In April, The Hague’s Arbitration Tribunal at the Permanent Court of Arbitration ordered Russia to pay the Ukrainian energy company five billion US dollars (4.5 billion euros) for losses caused by the seizure of Naftogaz Group’s assets in Crimea in 2014.

In accordance with the 1958 New York Convention, Naftogaz has the right to initiate the process of recognition of and admission to award enforcement in countries hosting Russian assets. 

“Since Russia has not voluntarily paid the funds to Naftogaz as provided for by the award, we intend to leverage all available mechanisms to recover these funds. We are currently working on this in the United States and other target jurisdictions,” said Oleksiy Chernyshov, CEO of Naftogaz Group.

In accordance with US laws, confirmation of the award is mandatory unless the court establishes the existence of causes to refuse or delay recognition or enforcement of the award set out in the New York Convention. Interest for non-payment of funds in accordance with the award continues to accrue until the full payment of compensation under the award.

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