Hague court rules in favor of Ukraine bank in case against Russia

The Permanent Court of Arbitration in the Hague on Friday found in favour of a Ukrainian bank which had accused Russia of “unlawful expropriation” of its assets in the annexed Crimean peninsula.

PrivatBank, Ukraine’s largest lender, had filed the massive claim in 2015 after new Crimean authorities installed by Moscow a year earlier took over its assets as well as many other Ukrainian enterprises located on the peninsula.

The court said in a statement that it had “issued its unanimous partial award addressing the respondent’s liability in respect of the claimant’s claims”, without specifying the amount of any compensation.

PrivatBank hailed the decision, which was taken on February 4.

“Russian Federation breached its obligations under the Ukraine-Russia bi-lateral investment treaty by unlawfully expropriating PrivatBank’s investments in Crimea,” the lender said.

“PrivatBank is entitled to full compensation for that expropriation,” it said, adding that it seeks $1bn in compensation, to be discussed in the next phase of the arbitration.

PrivatBank was nationalised in 2016 after authorities blamed billionaire Igor Kolomoyskiy and other bank owners for issuing bad loans to cronies and having insufficient capital to stay afloat.

The bank — the nationalisation of which was welcomed by the West — holds more than a third of Ukraine’s deposits.

PrivatBank’s claim is one of multiple cases being fought by Kiev on a legal front as a war with Russian-backed separatists in the east of the country drags on.

Russia annexed the Crimea from Ukraine in March 2014 following a popular uprising in Kiev that ousted a pro-Kremlin Ukrainian leader.