Ukraine’s state-owned Naftogaz Group has secured permission from an Austrian court to enforce a $5bn arbitral award against Russia, in the latest step in its effort to recover compensation for the seizure of its assets in Crimea.

The District Court of Vienna Inner City authorised the encumbrance of more than 20 Russian-owned real estate properties in Austria, valued at over €120mn, which will be sold at auction. “Another practical step toward recovering more than $5 billion from Russia for the unlawful seizure of Naftogaz Group’s assets in Crimea. Similar actions are also ongoing in other jurisdictions. Sooner or later, Russia will pay for everything. Without fail,” said Sergii Koretskyi, chief executive of Naftogaz.

Austrian law firm DORDA is representing Naftogaz in the enforcement proceedings, led by partner Alexander Karl and principal associate Robert Keimelmayr, with associate Teresa Stingl.

Naftogaz launched arbitration proceedings in October 2016 under a bilateral investment treaty between Ukraine and Russia, seeking compensation for Moscow’s expropriation of its Crimean property. Before the annexation, Naftogaz had been a leading player in the peninsula’s gas industry, with assets ranging from subsoil use permits and infrastructure to over 675mn cubic metres of stored gas.

On April 12 2023, a tribunal under the auspices of the Permanent Court of Arbitration in The Hague — comprising Judge Ian Binnie, Dr Charles Poncet and Professor Maja Stanivuković — ordered Russia to pay Naftogaz more than $5bn for treaty violations. The award remains the largest to date in investor-state claims by Ukrainian entities over Russia’s actions in Crimea.

Russia has refused to pay despite the Dutch Supreme Court recently dismissing its cassation appeal against the tribunal’s partial award on jurisdiction and merits. Naftogaz, represented internationally by Covington & Burling’s David Pinsky, Clovis Trevino, Paris Aboro and Dean Acheson, is pursuing enforcement in multiple jurisdictions where Russian state assets can be found.