Naftogaz currently estimates the damages at over USD 10 billion, including interest.
The arbitration award on the amount of damages payable is expected no sooner than early 2023.
In October 2016, Naftogaz and six other companies of Naftogaz Group initiated arbitration proceedings (PCA case No. 2017-16) against Russia under the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation Encouragement and Mutual Protection of Investments, also known as the Ukrainian-Russian Agreement on Protection of Investments.
Naftogaz requested the arbitration tribunal to oblige Russia to reimburse for breaching the Agreement on Protection of Investments, including the illegal expropriation of energy investments of strategic importance for Naftogaz that became one of the main targets of Russia during the invasion and occupation of Crimea in 2014.
Oral arguments as to the matters of jurisdiction and liabilities took place at the Peace Palace in The Hague in May 2018.
In February 2019, the arbitration tribunal ruled in favour of Naftogaz.
The tribunal reaffirmed its jurisdiction to consider the case and recognised that Russia had illegally expropriated Naftogaz investments in breach of its obligations under the Agreement on Protection of Investments.
Accordingly, the current (second) stage of the arbitration proceedings concerns the quantification of damages payable to Naftogaz.
For more information on the case, please visit the website of the Permanent Court of Arbitration.