Norway Seizes Russian Ship to Enforce $4.2Bln Claim by Ukraine’s Naftogaz

Norway has seized a Russian ship in the Arctic to enforce a $4.2 billion compensation claim won by Ukrainian energy firm Naftogaz over Moscow's seizure of its assets following the 2014 annexation of Crimea, officials said late on Wednesday.

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

The Svalbard governor's office issued a statement confirming that the ship had been seized and would be held in Svalbard, adding: "The governor will take care of the crew and passengers on board the vessel."

Russia's ambassador to Norway, Nikolai Korchunov, said in a statement that Moscow would pursue the ship's release through legal channels. "We insist on the immediate release of the vessel and on ensuring the safety of its passengers and crew," he said.

It was not immediately clear how many passengers and crew were on board.

Naftogaz has been pursuing legal action against Russia since 2016 to seek compensation for the expropriation of its property in Crimea. A tribunal in The Hague in April 2023 ordered Russia to pay Naftogaz $4.2 billion plus interest and legal costs.

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

Svalbard, a Norwegian territory since 1925, lies midway between the North Pole and the European mainland and is governed under a 1920 treaty that also allows citizens of signatory states, including Russia, to settle there without a visa.

The ship arrived on Tuesday in Barentsburg, a Russian-operated coal mining settlement on Spitsbergen, the largest island in the archipelago, with a party of Russian scientists, according to a journalist who was accompanying them.

Andrei Gorbunov, editor-in-chief of Komsomolskaya Pravda radio, said the vessel had docked without incident and the expedition members had headed ashore. News did not emerge until Wednesday evening that the ship had been seized.

"This seizure has had no impact on the expedition participants or the ship's crew. No one has been arrested. We are all going about our business as usual," Gorbunov wrote in a piece for Komsomolskaya Pravda.

"For the time being, the Professor Molchanov is simply forbidden from leaving the port of Barentsburg. It is completely unclear how long this ban will last," the journalist added.

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

Anticipating the ship's arrival in Svalbard en route to Barentsburg, a Russian mining settlement, Naftogaz's lawyers applied to a Norwegian court for the vessel to be arrested there and subject to a compulsory sale.

The application was approved by the Nord-Troms and Senja District Court on Monday. In its ruling, it required the governor of Svalbard to enforce the order, supervise the vessel and ensure that it is not moved.

Naftogaz has said it is coordinating enforcement measures across multiple jurisdictions, including the United States, France, the United Kingdom and Finland, where Russian assets have been frozen. Russia is appealing the process, saying no notice was given.

"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.