Norwegian authorities have seized a Russian cruise ship in the Arctic on behalf of Ukrainian energy company Naftogaz, which is seeking to enforce a $4.22 billion compensation award for assets that Moscow took when Russia annexed Crimea in 2014.
Officials said the vessel, the Professor Molchanov, was seized late on Wednesday in Barentsburg, a coal mining settlement that Russia operates on the Norwegian Arctic archipelago of Svalbard under the terms of a 1920 treaty.
Russia called the arrest of the ship an act of piracy and said it had summoned the Norwegian ambassador to deliver a strong protest. The Russian Foreign Ministry said it would work to secure the vessel’s release.
“Amid the restrictive measures imposed by Norway against Russia on Svalbard – measures that violate international law – Russian organizations and citizens operating on the archipelago are effectively under blockade,” it said, accusing Norway of violating the treaty.
Norway said it would propose ways for crew members, passengers and others to travel home if they want to.
“We are in a dialogue with the Barentsburg leadership and are ready to find ways to safely return people to Russia,” Svalbard Governor Lars Fause told broadcaster TV2.
The conflict over the vessel itself is a matter between Naftogaz and Russia and does not involve the Oslo government, Norway’s justice ministry said.
NAFTOGAZ FIGHTS LONG LEGAL BATTLE WITH RUSSIA
Naftogaz has been pursuing Russia since 2016 to seek compensation for the expropriation of its property in Crimea. An arbitration court in The Hague ordered Russia in April 2023 to pay Naftogaz $4.22 billion plus interest and legal costs.
Russia has said it does not recognise the court’s jurisdiction in this case and that it is not going to pay.
“Russia cannot evade responsibility simply by refusing to comply with an international arbitral award,” said Naftogaz acting CEO Sergii Fedorenko.
The 71-metre (233-foot) Professor Molchanov, built in Finland in 1982, can carry 32 crew and 52 passengers and has a library, sauna, bar and two restaurants, according to the Cruisemapper website. It is used for scientific expeditions and commercial cruises.
The ship arrived on Tuesday in Barentsburg with a party of Russian scientists, according to a journalist who was accompanying them, who did not say how many people were on board.
Andrei Gorbunov, editor-in-chief of Komsomolskaya Pravda (KP) radio, said the ship had docked without incident and the expedition members had headed ashore. News did not emerge until Wednesday evening that the ship had been seized.
“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.”
Clovis Trevino, a partner at U.S. law firm Covington which is representing Naftogaz, said she expected Russia to fight the arrest in court.
“So we need to win another legal battle to be able to auction the vessel and get the money for our clients, which is the ultimate goal,” she told Reuters.
Trevino said Covington and its Norwegian counterpart Wikborg Rein had been monitoring the ship for months. Its likely value is only a small fraction of the total amount owed to Naftogaz, which she said now totals around $6 billion including costs and interest.
But she called its seizure a “very meaningful win”.
The seizure was ordered on Monday by a district court which required the governor of Svalbard to ensure that the ship is not moved.
“Russia can demand that the district court reassess the case,” the Norwegian Justice Ministry said.
Naftogaz said it would continue to pursue Russian assets around the world until the compensation is paid. It has listed several jurisdictions, including the U.S., France and Britain as well as Finland, where Russian assets have been frozen. Russia is appealing, saying it was given no notice.
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.
Barentsburg is one of two Russian settlements on Svalbard which have a combined 392 residents out of a total population of 2,914, according to Statistics Norway.
-Reuters
