U.S. court clears way for DTEK to pursue Russia for more than $300 mln over seizure of Crimean assets

The U.S. Court of Appeals for the District of Columbia Circuit unanimously rejected Russia's appeal and confirmed that the U.S. District Court has jurisdiction to consider DTEK's motion to enforce an arbitral award of more than $300 million for Russia's seizure of its Crimean assets, the energy holding company reported.

"The court rejected russia's claim that it was protected by sovereign immunity, ruling that the case falls under the arbitration exception of the U.S. Foreign Sovereign Immunities Act (FSIA). The decision allows the company’s subsidiary DTEK Krymenergo to continue its legal efforts in the United States to recover compensation for assets taken after russia's illegal occupation of Crimea in 2014," DTEK said in a statement published on its website on Friday.

According to the company, the judges also made clear that the ruling does not address the status of Crimea or reconsider the merits of the arbitral award, but deals only with whether U.S. courts have the authority to enforce the award.

In its ruling, the court noted that Ukrainian companies that operated in Crimea had their "lawful, visible, and stationary" businesses forcibly taken without compensation following russia’s invasion.

Commenting on the ruling, DTEK Chief Legal Officer Oleksandra Moskalenko said: "This decision sends a clear and strong message that russia cannot avoid accountability by hiding behind sovereign immunity. It is a crucial step toward enforcing the arbitration award and the rule of law."

She added that DTEK will keep persistent in pursuing all available legal avenues to protect its rights and those of businesses affected by Russia's unlawful actions.

As reported, after the unlawful occupation of Crimea in 2014, Russia illegally seized and expropriated all assets of the energy distribution company DTEK Krymenergo, which distributed and supplied electricity across the peninsula.

In 2017, DTEK Krymenergo filed a claim with an international arbitration tribunal in The Hague seeking compensation from Russia for losses caused by the unlawful expropriation. In 2023, the international arbitration tribunal in The Hague upheld DTEK's claim and awarded approximately $267 million in damages against Russia, including interest, which will continue to accrue until full payment is made.

Because Russia failed to comply with the international court's ruling and did not pay the awarded damages, the energy holding company initiated enforcement proceedings to recover the damages from Russia in countries where Russian assets are located. At the time, it was reported that active enforcement procedures and measures against Russia were underway in the United States, the United Kingdom, the Netherlands, the Czech Republic, and Israel. In addition, potential enforcement measures in other jurisdictions are being explored.

The arbitral award is subject to enforcement in accordance with the 1958 New York Convention.

DTEK Krymenergo was the largest electricity supplier on the Crimean Peninsula, providing more than 80% of its electricity supplies.