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International Arbitration Forum

JSC DTEK Krymenergo v Russia

Case summary

At a glance

Parties
JSC DTEK Krymenergo (Ukraine) v. the Russian Federation
Case no.
PCA Case No. 2018-41; enforcement proceedings: US District Court for the District of Columbia Civil Action No. 1:23-cv-03330 (CJN); English High Court CL-2023-000796, [2025] EWHC 1060 (Comm); Hague District Court C/09/689865 KG ZA 25-801; Amsterdam District Court C/13/773771 / KG ZA 25-631
Forum and rules
Ad hoc arbitration under the UNCITRAL Arbitration Rules 1976, administered by the Permanent Court of Arbitration, seated in The Hague
Treaty
Russia–Ukraine BIT of 27 November 1998 (terminated by Ukraine on 27 January 2025, according to the US court)
Tribunal
Juan Fernández-Armesto (Presiding Arbitrator, replaced Stanimir A. Alexandrov in June 2020), J. William Rowley, Vladimir Pavić
Court
US District Court for the District of Columbia (Judge Carl J. Nichols); English High Court, Commercial Court (Dame Clare Moulder); Hague District Court (H.J. Vetter); Amsterdam District Court (M.L.S. Kalff)
Underlying award(s)
Final Award of 1 November 2023
Sector
Electricity distribution; Crimea
Outcome
The award upheld jurisdiction and found an unlawful expropriation. In 2025 the US court refused to dismiss or stay the confirmation petition, the English court stayed Russia's immunity application until The Hague Court of Appeal decides the set-aside action, and two Dutch courts refused to lift DTEK's attachments of assets held by Gazprom group companies.
Amount
Claimed: USD 421.2 million plus fees, costs and interest. Awarded: USD 207,800,000 plus interest at three-month USD LIBOR (or equivalent SOFR) plus 1%, compounded annually, from 22 January 2015; legal costs USD 9,401,644.76; administrative costs USD 1,362,422.88.

The dispute

JSC DTEK Krymenergo, a Ukrainian company in the DTEK Energy Group, owned and operated the formerly State-owned electricity network in Crimea, supplying more than 780,000 customers. After Russia annexed Crimea in March 2014, the Crimean Parliament on 21 January 2015 transferred all of Krymenergo's assets to the Republic of Crimea, and uniformed men took over its premises; no compensation was paid. Krymenergo claimed under the Russia–Ukraine BIT that Russia had expropriated its investment unlawfully and breached Articles 2, 3 and 5. Russia argued that Crimea is not Russian "territory" under the BIT, that the investment was not "made" after 1 January 1992, was not cross-border when made and was not a protected investment, and that the claimant's owner Rinat Akhmetov had acquired it through fraud and corruption. The published documents concern the enforcement of the award in the United States, England and the Netherlands, while Russia's set-aside action is pending before The Hague Court of Appeal.

Key holdings

  1. The FSIA arbitration exception applies. Russia's argument that the BIT never offered arbitration to Krymenergo goes to the scope of the arbitration agreement, not its existence, so it is not a jurisdictional question. The tribunal at least purported to make an award under the BIT. US DDC Memorandum Opinion, pp. 8–10
  2. The award meets the commercial reservation of the New York Convention. Taking over economically productive energy infrastructure placed Russia and Krymenergo in a relationship connected to commerce, even though expropriation is a sovereign act. Because foreign states are not "persons" under the Due Process Clause (Price), Russia's minimum-contacts objection fails. US DDC Memorandum Opinion, pp. 11–13
  3. No stay pending the Dutch set-aside action or the pending US appellate cases. Confirmation was not imminent, merits briefing would overlap with arguments already made, the expropriation dated back more than a decade, and Russia gave no estimate of when the Dutch proceedings would end. Russia's motions to dismiss and to stay were denied. US DDC Memorandum Opinion, pp. 14–17; Order
  4. On a brief consideration of the set-aside grounds, the "territory" ground has no real prospect of success: the Naftogaz reasoning of The Hague Court of Appeal, upheld by the Dutch Supreme Court, answers it. The "active investment" and "cross-border investment" grounds under Article 12 of the BIT cannot be called fanciful. English High Court ¶¶ 94, 100, 105–109
  5. Russia's state immunity application is stayed only until The Hague Court of Appeal decides the set-aside action, not until final determination, with liberty to the claimant to apply. The decisive factor was the risk of conflicting judgments. The court has no power under CPR 3.1 to make the stay conditional on a payment into court meant to secure enforcement before immunity is decided, and would not have ordered security in any event. English High Court ¶¶ 200–201, 213–217
  6. Gazprom International's application to lift the attachment of its 50% shareholding in Wintershall Noordzee B.V. was refused. Article 435(3) Rv allows recourse against a third party alleged to be identified with the debtor; whether Gazprom International is so identified under Russian law is for the main proceedings. Immunity from execution failed: the shares are likely Russia's "property" because Russia controls them through its 50.23% stake in PJSC Gazprom, and DTEK made it plausible that they serve commercial, not public, purposes. Hague District Court ¶¶ 4.4, 4.10, 4.15–4.18, 5.2
  7. South Stream Transport B.V.'s claims to lift the attachment of its funds at ABN Amro Bank were refused. SST had chosen not to file an Article 435(3) Rv opposition, so the attachment remains executory against it. Whether SST is identified with Russia belongs in the main proceedings, which Krymenergo undertook to start, and Krymenergo undertook not to levy execution in the meantime. Amsterdam District Court ¶¶ 4.5–4.10

Procedural history

  1. 16 February 2018Krymenergo commenced the UNCITRAL arbitration, after its notice of dispute of 5 April 2017 went unanswered.
  2. 18 June – 3 July 2018Vladimir Pavić was appointed for Russia by an appointing authority designated by the PCA Secretary-General. The co-arbitrators then appointed Stanimir A. Alexandrov as presiding arbitrator.
  3. 5 April 2019Russia asked to join the proceedings. Alexandrov resigned on 21 June 2020 and was replaced by Juan Fernández-Armesto on 29 June 2020. A hearing was held in The Hague in September 2021.
  4. 1 November 2023Final Award: jurisdiction upheld by majority, breaches of Articles 2, 3 and 5 found, and USD 207,800,000 plus interest and costs awarded.
  5. 7 November 2023Petition to confirm the award filed in the US District Court for the District of Columbia.
  6. 15 November – 1 December 2023The English High Court granted permission to enforce (15 November). The Hague District Court granted leave to enforce in the Netherlands (1 December).
  7. 1 February 2024Russia applied to The Hague Court of Appeal to set aside the award. The proceedings were pending at the date of the documents.
  8. 17 April 2025The US District Court denied Russia's motions to dismiss and to stay.
  9. 2 May 2025The English High Court stayed Russia's immunity application until The Hague Court of Appeal's decision and refused to order a payment into court.
  10. 5 September – 1 October 2025After DTEK attached Gazprom group assets on 21 July 2025, the Hague District Court (5 September) and the Amsterdam District Court (1 October) refused applications to lift the attachments.

Tribunal, counsel and experts

Decided by
  • Juan Fernández-Armesto President — chosen by the co-arbitrators (replaced Stanimir A. Alexandrov on 29 June 2020)
  • Stanimir A. Alexandrov President — chosen by the co-arbitrators (resigned on 21 June 2020)
  • J. William Rowley Co-arbitrator — appointed by the claimant (dissented on the amount of compensation)
  • Vladimir Pavić Co-arbitrator — appointed by the appointing authority (dissented from some majority conclusions without a separate opinion)
  • Carl J. Nichols Judge, US District Court for the District of Columbia
  • Clare Moulder Judge, High Court of Justice, Commercial Court
  • H.J. Vetter Judge, Hague District Court
  • M.L.S. Kalff Judge, Amsterdam District Court
For the claimant
Covington & Burling LLP · Emily Wood · Anton Dudnikov · G.J. Meijer · G. Fasfalis · L. Uilenbroek · J.J. Oetomo
For the respondent
Curtis, Mallet-Prevost, Colt & Mosle LLP · Hoff Advocaten · Schellenberg Wittmer Ltd. · Houthoff Coöperatief U.A. · Ivanyan & Partners · Ministry of Justice of the Russian Federation · Office of the Prosecutor General of the Russian Federation · Vernon Flynn · Mark Wassouf
For other participants
E.F. Kraaijeveld · J.Ph. de Korte · G.J. Wilts · R.M. Leeuwenburgh · A.J. Rijsterborgh · C.L. Merks · A.V. van IJperen
Experts
Mirjam van de Hel-Koedoot (claimant) · Yarik Kryvoi (claimant) · Maxim Kuzmin (other)

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Case ID
PCA Case No. 2018-41
Treaty
Russia - Ukraine BIT (1998)
Documents