The court of Switzerland allowed the Ukrainian companies to seek compensation for the Crimea

The Swiss Federal Supreme court dismissed the appeal of Russia and confirmed that the arbitration in Geneva empowered to consider the merits of the requirements of 12 Ukrainian companies compensation for loss of assets in Crimea. The plaintiffs are asking $100 million

Photo: Alexander Maksimenko / RIA Novosti

The Swiss Federal Supreme court on 16 October ruledthat the composition of international arbitration in Geneva has jurisdiction on the merits of the application 12 Ukrainian companies about indemnification for the nationalization of their assets in Crimea after March 2014. The Swiss court considered this question at the request of the Russian government, which objected to the competence of the Geneva arbitration in these disputes.

The company “Ukrnafta” (the first claim) and 11 other Ukrainian enterprises (the second claim), some of which in the past was associated with the group “Privat” Igor Kolomoisky, in 2015, appealed to the Permanent court of Arbitration in the Hague over the nationalization of their assets (mostly gas stations and tank farms) in the Crimea and Sevastopol as a result of joining the Peninsula to Russia. The applicants relied on the Russian-Ukrainian intergovernmental agreement on mutual protection of investments of 1998, which allows Ukrainian investor to submit the dispute with Russia to the court of arbitration under the rules of the United Nations (UNCITRAL). Since Russia refused to recognize the dispute, the Permanent court of Arbitration itself appointed arbitrators, and the Chairman became the arbitrator Gabrielle Kaufmann-Kohler of Geneva. This arbitration in June 2017 issued an interim decision, allowed to hear the requirements of 12 Ukrainian companies on the merits. But Russia appealed the interim decision in the Swiss Federal court (place of arbitration).

Russian lawyers relied on formal arguments: the Russian-Ukrainian agreement protects the investments made in the territory of another country; these investments were made in the period when the Crimea was part of Ukraine, and therefore not subject to protection. However, Ukraine still considers Crimea as its. However, the Swiss court decided that the agreement on investment protection should extend to those investments which, due to boundary changes were in the territory of another state at the time of expropriation. This is stated in the press release of the court (.pdf).

Leave a Reply

Your email address will not be published. Required fields are marked *