Norway Seizes Russian Vessel At Ukrainian Firm’s Request To Enforce $4.22 Billion Arbitral Award

Norway has seized a Russian ship in Svalbard at the request of Ukrainian state energy company Naftogaz, which is trying to enforce a $4.22 billion arbitration award against Russia.

The ship, Professor Molchanov, was seized at the port of Barentsburg under an order issued by the Nord-Troms and Senja District Court on Aug. 31, Naftogaz said.

The vessel belongs to the Russian Federation and is used for commercial expedition cruises, including trips to Svalbard.

Naftogaz is seeking compensation for assets it lost after Russia annexed Crimea in 2014.

A tribunal in The Hague ordered Russia in April 2023 to pay Naftogaz about $4.22 billion, plus interest and legal costs, for the assets seized in Crimea.

Russia has not paid the award.

The award had already been recognised as enforceable in Norway.

Under the court order, the Professor Molchanov cannot leave its current location. The Governor of Svalbard has been asked to take the necessary steps to make sure the vessel is not moved.

The Governor’s office said the ship was seized on Wednesday and would remain in Svalbard until the court decides otherwise.

Norwegian authorities are dealing with matters concerning passengers who are currently on board.

Naftogaz Continues Efforts to Recover Compensation

Naftogaz has been taking legal action against Russia since 2016 to seek compensation for its property in Crimea.

The company is also pursuing enforcement measures in other countries, including the US, UK, France and Finland. Russian assets have been frozen in Finland in connection with the case.

Russia is contesting the enforcement process and has said it was not given notice.

Naftogaz Acting CEO Sergii Fedorenko said the seizure was another step in the company’s efforts to recover the compensation.

“This is another important step towards restoring justice for Russia’s unlawful seizure of Naftogaz assets in Crimea,” Fedorenko said.

“Russia cannot evade responsibility simply by refusing to comply with an international arbitral award. We will continue to pursue Russian assets around the world until the compensation awarded to Naftogaz and other Naftogaz Group companies is paid.”

Naftogaz is represented in Norway by law firm Wikborg Rein and international legal counsel Covington & Burling LLP.

According to VesselFinder, the vessel was anchored at Barentsburg, a mining settlement in Svalbard.

The vessel cannot leave its current location under the court order. It will stay there unless the court decides otherwise, while Naftogaz continues its efforts to enforce the $4.22 billion award against Russia in other countries.

References: Naftogaz Group, Reuters