Ukraine’s state-owned Oschadbank registered seizure of Russian assets in France worth approximately €87 million ($99 million) as a part of an award of damages against Russia for expropriating the bank’s assets in annexed Crimea.
Oschadbank reported confirmation of the legal action the bank received on April 23, according to its press release.
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In 2018, the Arbitral Tribunal in Paris ruled in favor of Oschadbank in its case against the Russian Federation. After annexing Crimea in 2014, Russia illegally expropriated Oschadbank’s assets in Crimea – premises and debts from corporate debtors involved in solar energy projects.
The court decision awarded Ukraine’s bank over $1.1 billion of compensation for damages incurred due to the unlawful expropriation.
According to French law, Oschadbank, as the first applicant for the damages, has a priority right to satisfy its claims from the seized property.
“It is symbolic that the first ruling on enforcement was made in France – a European leader in the negotiation process for a just peace for Ukraine,” Roza Tapanova, a member of Oschadbank’s Supervisory Board said.
Previously, French President Emmanuel Macron said that France cannot seize the $280 billion in frozen sovereign Russian assets because “this does not belong to us.” But French lawmakers still press its government to seize all Russian assets.
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Chairman of the Management Board of Oschadbank Serhii Naumov said the bank is “the first state-owned company to receive an arbitral award for damages related to Russia’s unlawful expropriation of Ukrainian property in Crimea”.
The Crimea-Oschadbank case is a “long game”
Oschadbank initiated the case against Russia’s seizure of its assets in Crimea in 2015, under the 1998 Ukraine-Russia Bilateral Investment Treaty, claiming unlawful expropriation of its assets after the bank lost access to its branch in Crimea.
In 2016, The Permanent Court of Arbitration (PCA) registered a case number 2016-14, according to the UN Trade and Development database.
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The court hearing ran from 2016 to 2021. The case was reviewed by all levels of French courts: the PCA, the Paris Court of Appeal and the Supreme Court that reinstated the 2018 arbitration award of $1.1 billion with interest Russia is obliged to pay.
In 2022, when the French Supreme Court announced the final decision, Deputy Minister of Justice Iryna Mudra wrote on Facebook that the amount of interest will continue to accrue from the date of the ruling until full compensation is made – amounting to approximately $100,000 per day.
“All our previous legal battles with Russia in this case show that this ruling will not be enforced voluntarily, and Oschadbank faces a long road to realizing these assets. But we know how to play the long game. We are confident that justice must prevail,” Tapanova said.
Oschadbank intends to file more lawsuits against Russia to battle for compensation of all damages made since the full-scale invasion in February 2022.
“We are meticulously documenting all damages incurred by the bank since 2022 – these will serve as the basis for further claims against the aggressor state,” the press release quoted Arsen Miliutin, Deputy Chairman of the Management Board of Oschadbank.
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Olena Hrazhdan
Olena Hrazhdan is Kyiv Post's Business Reporter. She previously wrote for leading Ukraine's business media covering banking, private and public finance, macroeconomics, retail, and legal issues, She also became a Fellow of the International Monetary Fund’s Journalism Fellowship. She can be found on "X" @OlenaHrazhdan.
