Ukraine’s oil company files lawsuit against Russia over investment agreement infringement

Ukrainian oil and natural gas company Ukrnafta PAT has filed a lawsuit against Russia at the Permanent Court of Arbitration in the Hague, Netherlands.

The lawsuit is evidenced by documents posted on Monday on Permanent Court of Arbitration's website, according to UA Today. According to the documents, the lawsuit was filed to defend the oil monopoly company's investment based on the agreement with Russian Federation in 1998.

Permanent Court of Arbitration published the Ukrnafta v. The Russian Federation case description: "The Permanen Court of Arbitration acts as registry in this arbitration, which is being conducted under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules 1976 pursuant to the Agreement between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments dated 27 November 1998."

The Ukraine's oil company claims that the Russian Federation has broken the 1998 agreement aimed to create and maintain favorable conditions for mutual investments and the expansion of economic cooperation between the Cabinet of Ministers of the Ukraine and the Government of the Russian Federation. The agreement signed in Moscow was also seeking to develop earlier agreement , the Agreement on Cooperation in the Sphere of Investment Activity on December 24, 1993.

The Russian Federation side said in the case view that it does not recognize the jurisdiction of the international arbitration and did not appoint its representatives for the proceedings. The Russian Federation also stated that nothing in its correspondence "should be considered as consent of the Russian Federation to constitution of an arbitral tribunal, participation in arbitration proceedings or as procedural actions taken in the framework of the proceedings."

In addition to Ukrnafta's lawsuit, another 11 Ukrainian companies including Kirovohrad Nafta, Crimea Petrol, Pirsan, Trade-Trust, Elefteria, VKF Satek, Rustel, Rubenor, Stemy Group, Novel-Estae and Stabil, have also filed suits against Russia over the same claims, according to Russian News Agency.

In the middle of 2015, a lawsuit against Russia was also filed by Ukrainian company. According to Unian, Ukraine's largest bank PrivatBank initiated arbitration proceeding against Russia in summer 2015 over the loss of investments in Crimea after the annexation of the Ukrainian peninsula by Russia.

In December 2015, Ukrainian company Naftogaz engaged the U.S. law firm of Covington and Burling LLP to protect the company's interest in litigation concerning lost shelf assets in the annexed Crimea.

Ukrnafta is also represented by the U.S. law firm in the lawsuit against Russia. The oil company appointed Washington D.C.'s Hughes Hubbard & Reed LLP as its representatives.

Tags

Ukrnafta, Permanent Court of Arbitration, Russia, Russian Federation, UNCITRAL, United Nations Commission on International Trade Law, Ukraine

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