The legal conflict between Naftogaz and Moscow began in 2016 when the Ukrainian energy company initiated legal actions to claim compensation for the expropriation of its properties in Crimea. In April 2023, an arbitration tribunal based in The Hague ordered Russia to pay 4.22 billion dollars, plus interest and legal costs.
Moscow does not recognize the jurisdiction of the tribunal in this case and has refused to comply with the ruling. Naftogaz, however, maintains that Russia cannot evade its obligations simply by rejecting the authority of the tribunal and has intensified its efforts to enforce the ruling through enforcement proceedings in various countries.
The authorities of Norwayprevented the departure of a Russian cruise ship from the Svalbard archipelago after a court ordered its detention at the request of the Ukrainian energy company Naftogaz, which seeks to enforce a compensation of 4.22 billion dollars against Russia for the confiscation of its assets in Crimea following the 2014 annexation.
The vessel ''Professor Molchanov'', measuring 71 meters in length, has been detained since Wednesday night in Barentsburg, a coal mining settlement managed by Russia in Svalbard. This measure represents a new chapter in Naftogaz's international legal offensive to locate Russian assets that could be used to compensate for the losses recognized by an international arbitration tribunal.
The order was issued on Monday by a Norwegian district court, which instructed the governor of Svalbard to ensure that the ship could not leave the port. Russia has the option to request that the court re-examine the case, while Naftogaz hopes to subsequently move towards a potential auction of the vessel.
Norway seized a Russian cruise ship following a request from a Ukrainian energy company to collect a hefty compensation
The Russian government reacted strongly. The Ministry of Foreign Affairs described the detention of the cruise ship as an act of ''piracy'' and announced that it had summoned the Norwegian ambassador to present a formal protest. Moscow also stated that the measures applied by Norway against Russian organizations and citizens in Svalbard constitute illegal restrictions and accused Oslo of violating international law and the Svalbard Treaty.
Russia also asserted that it will work to secure the release of the vessel. The Kremlin's argument is based on the rights granted by the 1920 international treaty to citizens of the signatory countries, including Russia, to settle and develop certain economic activities in the archipelago.
Norway rejected directly linking the Oslo government to the economic dispute. The Ministry of Justice stated that the conflict related to the ship concerns Naftogaz and Russia. At the same time, Norwegian authorities indicated that they are willing to facilitate the return of crew members, passengers, and others on board who wish to return to Russia.
The Putin government reacted negatively to the stance of the courts in Barentsburg
The governor of Svalbard, Lars Fause, stated that the authorities are in talks with the Barentsburg administration to find mechanisms that ensure a safe return for the affected individuals.
The governor of the Svalbard region stated that they are working for the safe return of the affected individuals
Sergii Fedorenko, interim CEO of Naftogaz, stated that Russia must face the consequences of its actions and that the company will continue to seek Russian assets that can be used to fulfill the established compensation.
The ship had arrived on Tuesday in Barentsburg with a group of Russian scientists. According to a journalist accompanying the expedition, the group members disembarked normally and no arrests were made. The detention of the vessel was not publicly known until Wednesday night.
Although the value of the Professor Molchanov represents only a fraction of the claimed compensation, Naftogaz's legal representatives consider the operation a significant victory.
Naftogaz claims compensation of around 5 billion dollars for the confiscation of its assets following the annexation of Crimea
Naftogaz's goal is to obtain judicial authorization to auction the vessel and use the proceeds to cover part of the compensation. The company estimates that the Russian debt has increased to approximately 6 billion dollars when including interest and legal costs.
The Ukrainian company is also pursuing processes aimed at locating and France, the United Kingdom, and Finland. The strategy seeks to convert international judicial decisions into effective compensations.
