NORWAY has seized a Russian ship in the Arctic to enforce a $4.22 billion compensation claim won by Ukrainian energy firm Naftogaz over Moscow’s seizure of its assets when Russia annexed Crimea in 2014, officials said late on Wednesday.
The vessel, the Professor Molchanov, was seized off the Norwegian Arctic Archipelago of Svalbard, according to Covington, the U.S. law firm representing Naftogaz.
The Russian state news agency TASS quoted a Foreign Ministry spokesperson as saying the Norwegian action was “piracy”.
The Svalbard governor’s office issued a statement confirming that the ship had been seized and would be held on Svalbard, adding: “The governor will take care of the crew and passengers on board the vessel in collaboration with Trust Arktikugol”.
Russian Ship to be Held in Svalbard
It was not immediately clear how many passengers and crew were on the ship. Arktikugol (“Arctic Coal”) is the Russian company that manages Moscow’s assets on the archipelago.
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 (KP) 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 on KP’s website.
“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.”
Court Orders Seizure of Russian Properties in Svalbard
Naftogaz has previously won court orders to seize two Trust Arktikugol properties in Svalbard, including a rental guest house, but Russia has raised legal challenges.
Naftogaz has been pursuing 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 $4.22 billion plus interest and legal costs.
“Russia cannot evade responsibility simply by refusing to comply with an international arbitral award,” said Naftogaz Acting CEO Sergii Fedorenko.
Norway said the matter was a legal one between Naftogaz and Russia and did not involve the Oslo government.
“As a party to the case, Russia can demand that the district court reassess the case,” the Justice Ministry said.
Covington said it had been tracking the Professor Molchanov, a vessel used for commercial cruises, for months.
Anticipating its arrival, Naftogaz’s lawyers applied to a court for the vessel to be arrested and compulsorily sold.
The application was approved on Monday by the Nord-Troms and Senja District Court, which required the governor of Svalbard to enforce its order, supervise the ship and ensure that it is not moved.
Naftogaz has said it is coordinating enforcement across several jurisdictions, including the U.S., France, Britain and Finland, where Russian assets have been frozen. Russia is appealing, 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.
Barentsburg is one of two Russian settlements on Svalbard, along with Pyramiden. Together they have 392 residents out of a total population of 2,914, according to Statistics Norway.
The Svalbard Treaty restricts military use of the archipelago, but the islands are not a demilitarised zone. Russia has frequently accused Norway of militarising the islands, which Oslo denies. (Reuters)
