Norway seizes Russian vessel in Svalbard over $4.22 billion Naftogaz claim

Norwegian authorities have seized the Russian vessel Professor Molchanov in the Svalbard port of Barentsburg at the request of Ukrainian state energy company Naftogaz, as part of efforts to enforce a $4.22 billion arbitral award against Russia.

The seizure was carried out on Wednesday, September 2, following an August 31 ruling by the Nord-Troms and Senja District Court granting Naftogaz the right to seize the vessel. The Governor of Svalbard, acting as the enforcement authority, said the ship must remain in Barentsburg until the governor or the court decides otherwise.

Svalbard police operations chief Håkon Finstad confirmed the action to Aftenposten.

“The Svalbard police received an order from the Nord-Troms and Senja District Court to arrest and detain the vessel. Today the police arrested the vessel in Barentsburg,” Finstad said.

Naftogaz said the measure was intended to secure enforcement of Russia’s outstanding obligations under an arbitral award totalling approximately $4.22 billion, plus interest and costs. The company said the award had previously been recognised as enforceable in Norway.

The dispute dates back to Russia’s seizure of Naftogaz assets in Crimea in 2014. Naftogaz has pursued legal action against Russia since 2016, seeking compensation for property it says was expropriated after Russia annexed the peninsula.

In April 2023, a tribunal in The Hague ordered Russia to pay Naftogaz $4.22 billion, plus interest and legal costs, over the assets. Moscow has not complied with the award. Russia does not recognise the tribunal’s jurisdiction and did not participate in the proceedings, while maintaining that Crimea became part of Russia following a 2014 referendum.

Naftogaz said it is pursuing enforcement measures against Russian assets in several jurisdictions. Reuters reported that the company has been coordinating such efforts in the United States, France, Britain and Finland, where Russian assets have been frozen. Russia is appealing the enforcement process, saying it was not given notice.

The Professor Molchanov is owned by the Russian state and is used for commercial expedition cruises, including voyages to Svalbard. Under the Norwegian court order, the vessel cannot leave its current location, and the Governor of Svalbard is responsible for taking measures to prevent it from being moved.

The Governor’s office said it would take care of the crew and passengers on board in cooperation with Trust Arcticugol. According to MarineTraffic, the vessel was docked in Barentsburg on the evening of September 2.

By Tamilla Hasanova