Ukraine’s state-owned oil and gas company Naftogaz has said that Russia has been ordered to pay it $5bn for wrongfully seizing its assets in Crimea in 2014.

The ruling by The Hague’s Arbitration Tribunal at the Permanent Court of Arbitration came earlier this week.

Russia, which invaded Ukraine last February, annexed the Crimean Peninsula in 2014.

Naftogaz and six other Naftogaz Group entities filed an arbitration claim against Moscow in October 2016.

The court determined that the amount of compensation should be the same as the fair market worth of the Naftogaz assets before expropriation.

Additionally, the court dismissed Russia’s assertions that Naftogaz is not entitled to any restitution for the seizure of its assets.

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By GlobalData

Furthermore, the court ordered that Russia must pay Naftogaz back for the expenses incurred during the arbitration hearings.

Naftogaz CEO Oleksiy Chernyshov said: “The Naftogaz team has won a key victory on the energy front. Despite Russia’s attempts to obstruct justice, the Arbitration Tribunal ordered Russia to compensate Naftogaz for losses of $5bn. This relates to the seizure of our assets in Crimea by Russia in 2014. Russia must now comply with this decision in accordance with its obligations under international law.”

Hearings to decide the amount of compensation ended in March 2022, just as Russia launched a full-scale invasion on Ukraine.

Last September, Naftogaz initiated an arbitration procedure against Russia’s gas giant Gazprom over its failure to make gas transit payments.