3 hrs ago
Norway Seizes Russian Ship Over Ukrainian Compensation Claim
Norway stopped a Russian ship from leaving a port in the Arctic.
The ship was stopped for Naftogaz, a Ukrainian energy company.
Naftogaz says Russia took its property in Crimea after annexing the region in 2014.
A court ordered Russia to pay Naftogaz $4.22 billion, plus other costs.
Russia says it does not accept that court’s decision and will not pay.
Russia also called the ship’s seizure piracy and protested to Norway.
The ship is being held in Barentsburg on Svalbard.
Naftogaz hopes the ship could eventually be sold to help collect the money, although its value is much smaller than the debt.
The case may lead to another court fight over whether the ship can be auctioned.
Norwegian authorities seized the Russian cruise ship Professor Molchanov in Barentsburg on behalf of Naftogaz.
Naftogaz is enforcing a Hague arbitration award ordering Russia to pay $4.22 billion plus interest and legal costs.
Russia rejected the award, called the seizure piracy, and said it had summoned Norway’s ambassador.
The ship was ordered detained by a Norwegian district court and cannot leave the port for now.
Naftogaz says it will continue pursuing Russian assets worldwide to recover the compensation.
- Who
- Norwegian authorities, the Ukrainian energy company Naftogaz, and Russia are the main parties; the Professor Molchanov was the ship seized.
- What
- Norway detained the Russian cruise ship on behalf of Naftogaz to help enforce a $4.22 billion arbitration award against Russia.
- Where
- The seizure took place in Barentsburg, a Russian coal-mining settlement on Norway’s Svalbard archipelago.
- When
- The ship was seized late Wednesday after a Norwegian district court issued an order on Monday; the report was published September 3.
- Why
- Naftogaz is seeking compensation for property it says Russia expropriated in Crimea after the 2014 annexation.
Naftogaz and Norwegian Position
Russian Position
Whether the detention is justified
Naftogaz and Norwegian Position
Naftogaz says Russia cannot avoid responsibility by refusing to comply with an international arbitral award, while Norway says the dispute is between Naftogaz and Russia and does not involve the Norwegian government.
Russian Position
Russia calls the seizure an act of piracy and says Norway’s restrictive measures on Svalbard violate international law and the 1920 treaty.
Validity of the arbitration award
Naftogaz and Norwegian Position
Naftogaz relies on the Hague tribunal’s April 2023 order for $4.22 billion plus interest and legal costs and is seeking to enforce it through Russian assets.
Russian Position
Russia does not recognize the arbitration court’s jurisdiction and says it will not pay the award; it is also appealing, saying it received no notice.
What happens next
Naftogaz and Norwegian Position
Naftogaz’s lawyers expect another court battle and want to auction the ship if permitted, while continuing asset-enforcement efforts worldwide.
Russian Position
Russia says it will work to secure the vessel’s release and can ask the Norwegian district court to reassess the case.
Key facts
- Compensation award
- A Hague arbitration court ordered Russia to pay Naftogaz $4.22 billion in April 2023, plus interest and legal costs.
- Ship
- The Professor Molchanov is a 71-metre cruise ship built in Finland in 1982.
- Ship status
- The vessel is forbidden from leaving Barentsburg, and no one on board was reported arrested.
- Russian response
- Russia called the seizure piracy, summoned the Norwegian ambassador, and said it would seek the vessel’s release.
- Legal basis
- A Norwegian district court ordered the ship detained while Naftogaz pursues enforcement.
- Svalbard
- Svalbard has been Norwegian territory since 1925 and is governed under a 1920 treaty that permits citizens of signatory states, including Russia, to settle there.
- Naftogaz’s next step
- Naftogaz plans to continue pursuing Russian assets in jurisdictions including the United States, France, Britain, and Finland.
Quotes
Russian Foreign Ministry
Russia’s foreign ministry, commenting on the seizure and Svalbard restrictions
“Amid the restrictive measures imposed by Norway against Russia on Svalbard – measures that violate international law – Russian organizations and citizens operating on the archipelago are effectively under blockade”
theprint.in
“Russia cannot evade responsibility simply by refusing to comply with an international arbitral award.”
theprint.in
Clovis Trevino
Partner at Covington, representing Naftogaz
“So we need to win another legal battle to be able to auction the vessel and get the money for our clients, which is the ultimate goal.”
theprint.in
Sources
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