A federal appeals court on Friday dismantled Russia’s attempt to shield itself from more than $250 million in arbitration awards tied to the Kremlin’s 2014 seizure of Ukrainian energy assets in Crimea, allowing two Ukrainian companies to continue enforcement proceedings in U.S. courts.
In a significant ruling on sovereign immunity, the U.S. Court of Appeals for the District of Columbia Circuit rejected Moscow’s argument that it was immune from the enforcement fight, sending the case back to a lower court for further proceedings.
Sovereign Immunity Defense Rejected
The dispute stems from arbitration awards totaling roughly $250 million issued under United Nations Commission on International Trade Law rules. Ukrainian electricity distributor DTEK Krymenergo secured a $219 million award after alleging that Russia unlawfully seized its Crimean power distribution business. A separate group operating 31 petrol stations across the peninsula won more than $34 million.
Russia argued that the 1998 investment treaty between the two countries did not apply because the investments were made when Crimea was still Ukrainian territory. According to Moscow, the treaty was designed to protect cross-border investments — not assets that later became part of Russia following annexation.
Writing for the three-judge panel, U.S. Circuit Judge J. Michelle Childs rejected that framing, ruling that Russia was attempting to turn a merits defense into a jurisdictional challenge.
“Strip those points away, and nothing jurisdictional remains,” Judge Childs wrote, emphasizing that Russia did not dispute the existence of the treaty, the arbitration agreement, or the issuance of the awards.
Under the Foreign Sovereign Immunities Act’s arbitration exception, the court’s role at this stage was limited to determining whether an arbitration agreement existed and whether a treaty potentially governs enforcement — thresholds the panel found satisfied.
