Recent Developments In 'Crimean' Investment Arbitration Claims

As we previously reported1, the events of 2014 in Crimea have, aside from their geopolitical impact, also resulted in numerous investment arbitration claims being brought against Russia by Ukrainian companies in relation to their assets and investments in Crimea. While these cases are ongoing, and while there are limited details in the public domain, the awards to date in each case have upheld the jurisdiction of the tribunal to hear the claims and seemingly held that the territorial scope of the Russia-Ukraine bilateral investment treaty extends to protect investments in Crimea as a territory now under the effective control of the Russian Federation.

More claims against Russia appear to be in prospect, although the arbitral fall-out is not all one way. Indeed, actions taken by governmental and other bodies in Ukraine against Russian companies since 2014 have resulted in a number of investment arbitration claims being brought against Ukraine. Whether these are strictly to be considered as "Crimea cases" is a moot point, but they may perhaps be understood as part of the wider tensions between Russia and Ukraine.

This post looks at the recent developments in the active cases and possible future developments.

The Crimea cases

To date, some 10 "Crimea cases" have been commenced as arbitration claims under the 1998 bilateral investment treaty between Russia and Ukraine. While they span a range of different economic sectors from oil and gas, financial services, air transportation and real estate, 5 of the cases have been brought by companies associated with the same prominent Ukrainian businessman, Igor Kolomoisky.

Russia had at first refused to recognize the legitimacy of the proceedings and had refused to participate, choosing instead to send letters protesting against the formation of the arbitral tribunals and the powers of the Permanent Court of Arbitration (PCA) administering the cases. However, that stance changed over the Summer of 2019 with the Russian government announcing that it would henceforth fight the cases on issues of admissibility and jurisdiction, as well as liability, quantum and enforcement. No doubt this change in policy was prompted by consistent awards being delivered on the cases considered to date which had upheld the admissibility of the claims and the jurisdiction of the tribunals. While Russia had sought to challenge such decisions in national courts, those challenges that were brought were decided against it (see...