DTEK initiates an investment dispute against Russia regarding the Group’s Crimean assets
DTEK Krymenergo has launched a procedure to resolve an investment dispute with the Russian Federation under the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on mutual protection of investments (Russia-Ukraine BIT). The dispute is caused by nationalisation of the company’s investments in the Crimea. Unless the dispute is resolved through negotiations, DTEK Krymenergo is going to submit it to international arbitration. The compensation for the company’s actual and potential losses may exceed $500 million. DTEK Krymenergo has engaged the international law firm Covington and Burling LLP to protect its interests.
“We have been focused on the re-issue of documents and the development of the evidence base and legal strategy since the illegal seizure of DTEK Krymenergo. Following a comprehensive analysis of international practices and similar precedents, we have sent an official notice to the Russian Federation on the investment dispute under the Bilateral Investment Treaty between Ukraine and Russia,” said Dmitry Sakharuk, acting CEO of DTEK Energy.
Russia-Ukraine BIT establishes that the parties may resolve disputes through negotiations, following which they have the right to resort to arbitration.
DTEK Krymenergo was the biggest power supplier in the Crimea, providing more than 80% of electricity to the peninsula.
The value of DTEK Krymenergo’s immovable and movable assets which were nationalised by the decision of the State Council of the Republic of Crimea exceeds $500 million.