Russia handed $192 million bill for Crimea bank and airport losses

More than a decade after Russia took control of Crimea, Ukrainian bank and airport investors won over $192 million in compensation, with interest stretching back to 2014.THE HAGUE, Netherlands (CN) — Russia faces a bill of more than $192 million plus interest after arbitration tribunals in The Hague ordered it to compensate Ukrainian investors for banking and airport losses following its takeover of Crimea.The Permanent Court of Arbitration announced Tuesday that the final decisions were issued Oct. 1. Ukrainian commercial bank PrivatBank sought compensation for Russian measures that prevented it from operating in Crimea. Separately, Aeroport Belbek LLC and businessman Igor Kolomoisky sought payment for losing rights to run a commercial passenger terminal at Belbek Airport.The institution, based at The Hague’s Peace Palace, helps resolve disputes involving governments and private parties. It administered the cases, while the tribunals decided the claims.Under a 1998 Russia-Ukraine investment treaty, the tribunals determined in 2017 that Russia had assumed obligations toward the relevant Ukrainian investors and their Crimean investments from March 21, 2014. In February 2019, they found Russia had breached protections against seizure of those investments, leaving compensation for later.The final awards ordered immediate payment of nearly $180.9 million to PrivatBank and $11.5 million to the airport claimants. PrivatBank’s tribunal also rejected Moscow’s argument that the bank was ineligible for treaty protection because it had acquired its investments through corruption, fraud and violence.PrivatBank had been on the peninsula for two decades before the takeover, establishing its Crimea and Sevastopol divisions in 1994. What began as a banking business within Ukraine eventually became an international compensation claim.In February 2014, armed men seized Crimea’s parliament. Russia moved to incorporate the peninsula the following month after a disputed referendum. Ukrainian businesses found their investments in territory now under Russian control.The claimants turned to arbitration in 2015, invoking the treaty to seek compensation directly from Russia. Their investments had not moved across a border; control of the territory had changed around them. The PrivatBank tribunal applied the treaty without deciding sovereignty over Crimea.Russia initially stayed out of the proceedings, joining in 2019 after the tribunals had found it responsible. Moscow then sought to reopen questions about the bank tribunal’s authority and Russia’s liability, as well as to contest compensation. The tribunal permitted arguments over damages and the suspected unlawful acquisition of investments but rejected the remaining requests. Further written submissions and two hearings followed.Interest adds to the bill, running from April 18, 2014, for PrivatBank and June 16, 2014, for the airport claimants until payment. The awards also allocated arbitration costs.The claimants and Russia did not immediately respond to requests for comment.The awards are final and binding, with no ordinary appeal on the merits. Russia can still ask Dutch courts to overturn them on limited grounds, including a tribunal exceeding its authority or serious procedural defects. Filing a challenge does not automatically suspend enforcement: The orders to pay remain in force.Courthouse News reporter Eunseo Hong is based in the Netherlands.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads