After Russia snatched the Black Sea peninsula of Crimea from Kiev the new authorities installed by Moscow set about taking over one of Ukraine’s largest banks as well as shipyards and hotels.
The state lender has now fired back by filing a massive claim with a court in The Hague — one of multiple cases being fought by Kiev on a new legal front as a war with pro-Russian separatists in the east of the country drags on.
The various lawsuits add up to tens of billions of dollars and may take months or years to resolve.
But the ex-Soviet state is certain it will win back at least some of the money to help fill its shallow state coffers at a time when IMF aid remains suspended over Ukraine’s perceived failure to properly tackle graft.
Ukraine’s Justice Minister Pavlo Petrenko added fuel to the fire by warning that even more cases against Russia linked to its seizure of Crimea and alleged invasion of the east were in the works.
"We are preparing another lawsuit together with the foreign ministry that we plan to submit to the (UN) International Court of Justice," Petrenko told Ukraine’s private 112 news channel on August 27.
The case of the State Savings Bank of Ukraine (Oschadbank) is of particular importance to Kiev because it may boost the pro-Western authorities’ hand in winning back other properties from Russia.
It has hired the Quinn Emanuel Urquhart & Sullivan LLP global law firm to represent its case at the Permanent Court of Arbitration in The Hague.
An August 26 hearing boycotted by Russia heard that Oschadbank was seeking more than USD 1 billion in compensation "for the total destruction of its investment in Crimea".
Quinn Emanuel Urquhart & Sullivan LLP partner Alex Gerbi said that "if Russia continues with this stance, the claim shall proceed through an accelerated timetable to a final hearing scheduled for the end of March 2017."
Gerbi sthat a judgement in favour of Kiev would not necessarily set a precedent for similar disputes.
But he added that "investment treaty awards typically may be used as persuasive… authority in other cases under appropriate circumstances."
PrivatBank – Ukraine’s largest private lender with branches stretching from Italy to China – is also seeking compensation over losses suffered when Crimea was swarmed by Russian troops and then staged a referendum to join Ukraine’s eastern neighbour.
The UN General Assembly condemned the vote as ‘illegal" by a nearly-unanimous margin.