The arbitration made a revolutionary decision on the Russian-Ukrainian dispute
Against the backdrop of active attempts by Ukraine to recover compensation from Russia for the loss of property in Crimea, a counter process is also taking place: Tatneft managed to achieve recognition of the decision of the Paris ad hoc arbitration, according to which $112 million was recovered from Ukraine for the expropriation of shares in the Kremenchug refinery.
This was reported by the Russian publication “Kommersant”, noting that the Arbitration Court of the Stavropol Territory published the full text of the ruling on the recognition and enforcement of an international arbitration decision obliging Ukraine to pay Tatneft. In addition, the $112 million will accrue interest at the rate for three-month US dollar deposits plus 3% until the final payment date. The decision was made under UNCITRAL rules by ad hoc arbitration on July 29, 2014 in Paris; since April 2017, the company has been trying to enforce it in Russia.
Previously, the Moscow Arbitration Court denied Tatneft proceedings because the applicant could not prove that Ukraine had property that could be foreclosed on: buildings in Leontyevsky Lane and Novy Arbat in Moscow are under diplomatic immunity. At a new round of consideration of the case in the summer of 2018, the dispute was transferred to the location of other real estate owned by Ukraine - to the AS of the Stavropol Territory, where Tatneft achieved success.
As follows from the judicial act, the company discovered five real estate properties in the region: four buildings in Kislovodsk, used by the State Medical Institution “Sanatorium named after. N. A. Semashko" and its branch - the sanatorium "Ukraine" in Essentuki.
The buildings have been owned by Ukraine since 2001 on the basis of an intergovernmental protocol and have now been transferred to the sanatorium with the right of operational management. These data were confirmed to the court by Rosreestr. The presence of the defendant’s property on the territory of the Russian Federation, according to the plaintiff, confirms that the Russian court has effective jurisdiction.
During the trial, the Ukrainian side insisted that it had judicial immunity and recognition of the arbitration decision in the Russian Federation would be contrary to public order. Nevertheless, the court granted the oil company's application, rejecting the defendant's arguments. The AU concluded that Ukraine waived judicial immunity by participating in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and by concluding an intergovernmental agreement with Russia on the promotion and protection of investments.
In turn, Nektorov, Saveliev & Partners partner Ilya Rachkov calls the court’s ruling revolutionary.
“Firstly, this is the first investment arbitration decision recognized in Russia. Secondly, the Russian court went further in interpreting the immunity of states, recognizing that if a state (Ukraine) agreed to consider a dispute, it automatically agreed to its recognition and execution,” the expert emphasized.
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