Arbitrators rule Russia obliged to protect Ukrainian investors in annexed Crimea

In particular, arbitrators have accepted the principle that Russia could be liable under the Ukraine-Russia BIT for the mistreatment of investors in the Crimean Peninsula following the date when Russia signed decrees incorporating the contested territory into the Russian Federation, IAReporter wrote.

This appears to be the first instance where a tribunal has ruled to extend BIT protection to circumstances such as these.

Claims arise out of banking and airport investments, with Russia denying jurisdiction but not appearing in the arbitrations.

The legal developments come in the cases of Igor Kolomoisky and Aeroport Belbek LLC v. Russia and Privatbank and Finilon v. Russia, a pair of arbitrations initiated in 2015 under the Ukraine-Russia bilateral investment treaty.

Although the Russian Federation has not appeared to defend itself in the cases, in letters sent to the Permanent Court of Arbitration, Russia has contended that the “[Ukraine-Russia BIT] cannot serve as a basis for composing an arbitral tribunal to settle [the Claimants’ claims]” and that it “does not recognize the jurisdiction of an international arbitral tribunal at the [PCA] in settlement of the [Claimants’ claims].”

Read alsoAkhmetov reportedly forced to sell Crimean assetsTribunal sidesteps ruling on lawfulness of occupation and annexation, but sees its as effective – with legal consequences under BIT.

IAReporter have confirmed that the tribunals have determined that the Russian Federation had obligations to protect Ukrainian investors in Crimea under the Ukraine-Russia BIT from the date of March 21, 2014 onward. Although the claimants had pushed for an earlier date, owing to earlier Russian occupation of the territory, the tribunal settled on March 21, 2014, the date when Russian President Vladimir Putin signed decrees incorporating Crimea into the Russian Federation.