Aequo Supported Naftogaz in Prevailing on Jurisdiction and Liability in an Investment Arbitration Against Russia
Aequo acting as the Ukrainian counsel alongside Covington & Burling LLP as the lead counsel supported NJSC Naftogaz of Ukraine, the largest oil and gas company in Ukraine, and its subsidiaries NJSC Chornomornaftogaz, JSC Ukrtransgaz, Likvo LLC, JSC Ukrgazvydobuvannya, JSC Ukrtransnafta, and Gaz Ukraiiny (Naftogaz group) in prevailing on jurisdiction and liability issues at the first phase of international arbitration against the Russian Federation in a dispute over breach of the Ukraine-Russia bilateral investment treaty (BIT) by expropriating the Naftogaz group’s assets in Crimea.
In its partial award the arbitral tribunal confirmed its jurisdiction to hear the Naftogaz group’s claims against the Russian Federation and concluded that Russia had unlawfully expropriated assets owned by Naftogaz group in Crimea and breached its obligations under the Ukraine-Russia BIT to protect investments in Crimea.
The amount of damages will be ruled upon at the next stage of the arbitration. Naftogaz experts estimate the value of Naftogaz group’s assets as expropriated by Russia in Crimea at around USD 5 billion plus interest.
“It is a great honour for us to assist our client in prevailing on the principal issues (such as jurisdiction and liability) in the investment arbitration vs Russia. Importantly, we were able to prove that under the Ukraine-Russia BIT Russia is liable for expropriation or loss of Ukrainian investments in Crimea since its occupation. This historic victory is of great significance to Ukraine further empowering other Ukrainian and foreign investors to protect their interests and assets targeted by the Russia’s occupation of Crimea”, comments Pavlo Byelousov, partner and head of Aequo’s International Arbitration group.
Denis Lysenko, Aequo’s managing partner, further underlines that “it is a hard-fought win for Naftogaz given the complex nature and factual circumstances of this dispute. We are delighted that a strategy developed and successfully implemented by the joint legal team of Covington & Burling and Aequo resulted in Naftogaz’s victory on the major points and in Russia’s liability for expropriation of the Naftogaz group’s assets in Crimea”.
The core Aequo team on the case consisted of partners Denis Lysenko and Pavlo Byelousov, counsel Myroslava Savchuk, associates Ksenia Koriukalova, Oleksandr Zablotskyi and Roman Hryshyn-Hryshchuk.
About the firm
AEQUO is an advanced industry-focused Ukrainian law firm made up of highly qualified, internationally recommended lawyers who work proactively to help their clients reach their business goals. Backed up by solid industry expertise and a thorough understanding of business we develop innovative strategies and provide efficient solutions to the most complex and challenging matters.
AEQUO provides integrated legal support in areas such as antitrust and competition, banking and finance law, intellectual property, corporate and commercial law, mergers and acquisitions, taxation, litigation and international arbitration, and capital markets.
The list of AEQUO’s representative clients includes leading Ukrainian and international companies and organizations, such as Agroprosperis, Apax Partners, Apollo, Bunge, DuPont, EBRD, European Commission, Google, Inditex Group, NCH Capital, Pioneer Hi-Bred International, Samsung Electronics, Sandvik, Synthon, Tetra Laval, Ukrainian Redevelopment Fund, UniCredit Group, Vodafone Ukraine etc.
AEQUO has been named the Most Innovative Law Firm of the Year in Ukraine by IFLR Europe Awards 2018, Law Firm of the Year in Russia, Ukraine and the CIS by The Lawyer European Awards 2017 and one of the most innovative law firms in Europe according to the FT Innovative Lawyers 2015-2018.
For additional information please contact Natalia Kovalchuk
Kovalchuk@aequo.ua, +380 44 490 91 00