Norway seizes Russian ship to enforce Naftogaz compensation claim

Norway has seized a Russian ship in the Arctic to enforce a compensation claim by Ukrainian energy firm Naftogaz, linked to Russian asset seizures in Crimea.

Norway seized the ship on Wednesday, after Moscow failed to pay Naftogaz $4.22bn plus interest and legal costs to compensate for assets it seized in Crimea after a tribunal ruling at The Hague in 2023.

In a post on X, Naftogaz said the seizure made up “part of global efforts to enforce the arbitral award obtained by Naftogaz against the Russian Federation in connection with the unlawful expropriation of their assets in Crimea, which Russia illegally annexed in 2014”.

The vessel, the Professor Molchanov, was taken off the Norwegian Arctic archipelago of Svalbard after a 24-hour standoff with the Norwegian Coast Guard, according to Covington, the US law firm representing Naftogaz.

Russian state news agency TASS quoted a Ministry of Foreign Affairs spokesperson as calling the Norwegian action “piracy”.

Alexei Chekunkov, Russia’s minister for the development of the Russian Far East and Arctic, said Moscow would challenge the ruling.

Chekunkov called Norway’s seizure of the Professor Molchanov “another example of Western countries’ legal nihilism and lawlessness,” according to the Interfax news agency.

Naftogaz has been pursuing legal action against Russia since 2016 to seek compensation for the expropriation of its property in Crimea.

“Russia cannot evade responsibility simply by refusing to comply with an international arbitral award,” said Naftogaz Acting CEO Sergii Fedorenko.

“We will continue to pursue Russian assets around the world until the compensation awarded to Naftogaz and other Naftogaz Group companies is paid,” the Ukrainian company said.

Covington, the law firm, said it had been tracking the Professor Molchanov, a Russian-owned vessel that is used for commercial cruises, for months.

The ship was being used for commercial expedition cruises, including to Svalbard, according to the company.

Naftogaz said the passengers on board are being handled by Norwegian authorities.