Hughes Hubbard Continues Fight for Ukrainian Gasoline Companies in U.S. Court

April 2024 - A group of Ukrainian gasoline companies represented by HHR pushed back against Russia’s attempt to toss their claims in D.C. federal court, as part of a series of arbitrations over gas stations and other assets the Russian government seized after its 2014 invasion of Crimea.

The companies have been fighting for compensation for their seized assets since 2015, when they filed a notice of arbitration against the Russian Federation. The companies contended that the seizures breached the bilateral investment treaty between Russia and Ukraine.

Russia originally refused to participate in the arbitration, but the arbitrators found in a 2017 decision on jurisdiction in favor of the companies that they had jurisdiction to hear the claims. Russia attempted to set aside that decisions in the Swiss courts, but the Swiss Federal Supreme Court denied its applications in 2018.

In April 2019, following further proceedings, the three-member tribunal, sitting in Geneva under the auspices of the Permanent Court of Arbitration, issued a final award that unanimously found that Russia had violated the bilateral investment treaty. The panel awarded nearly $35 million to the 11 companies involved, plus interest and costs related to the proceedings. The Swiss Federal Supreme Court rejected a further application by Russia to set aside that award.

In 2022, Hughes Hubbard filed proceedings in D.C. federal court to enforce the award. Russia moved to dismiss the petition to enforce the $35 million arbitral award, arguing that the bilateral investment treaty doesn’t apply for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act, as the gas stations were in Ukraine at the time of the companies’ investment in them.

On March 25, the companies urged the court to reject Russia’s bid to toss their claims, saying that both the tribunal and the Swiss court had already considered Russia’s objections on the same grounds and rejected them.

Developments in the case were recently covered in Law360.

The HHR team representing the Ukrainian gas companies includes John Townsend, Jim Boykin, Eleanor Erney, Shayda Vance, Carter Rosekrans, Winthrop Jordan, and paralegal Svitlana Stegniy.