The Hague Arbitration Court recognizes Russia’s obligations to protect Ukrainian investors in Crimea after annexation

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Interfax | 11 March 2017

The Hague Arbitration Court recognizes Russia’s obligations to protect Ukrainian investors in Crimea after annexation

Russia must bear responsibility for protecting Ukrainian investors in Crimea after its annexation under the Russian-Ukrainian bilateral investment treaty.

The Permanent Court of Arbitration in The Hague issued a relevant ruling, Luke Eric Peterson wrote in the Investment Arbitration Reporter.

Earlier, the Permanent Court of Arbitration in The Hague issued an Interim Award concerning certain issues of jurisdiction and admissibility in the lawsuit by PrivatBank and its former owner Ihor Kolomoisky against Russia in connection with the annexation of Crimea.

"On 24 February 2017, having deliberated, the Tribunal issued its unanimous Interim Award addressing certain issues of jurisdiction and admissibility," the court said in a statement.

There is no additional information on this ruling.

The court recalled that the claimants say that the Russian Federation breached its obligations under the Ukraine-Russia bilateral investment treaty by taking, as of February 2014, measures that prevented them from operating their banking business in Crimea.

The tribunal recalled that the arbitration proceedings into the lawsuit by Kolomoisky and Belbek Airport LLC against the Russian Federation were launched on January 13, 2015 on the basis of the UNCITRAL (United Nations Commission on International Trade Law) and the agreements between the governments of the Russian Federation and Ukraine on protection of investments dated November 27, 1998. The claimants said that the Russian Federation had violated its obligations arising from the said treaty by adopting since February 2014 measures that deprived the claimant of property rights, contractual and other rights to operate the passenger terminal for commercial flights at the Belbek airport in Crimea.

Kolomoisky said he had a contract until 2020 to manage the passenger terminal of Belbek airport (Sevastopol) nationalized by Russia after the annexation of Crimea. He demanded compensation from the Russian Federation for losses in the form of a possible income from the terminal, amounting $15 million.

Then, on April 13, 2015, similar arbitration proceedings against the Russian Federation were initiated by PrivatBank and Finance Company Finilon LLC, as the annexation of Crimea by Russia did not allow the claimants to continue their banking business in Crimea.

source: Interfax