U.S. Supreme Court turns away dispute between Ukraine and Russian oil company

Oct 3 (Reuters) – Amid Russia’s invasion of Ukraine, the U.S. Supreme Court on Monday refused to hear an offer by the Ukrainian government to avoid paying a $173 million judgment dollars to Russian oil and gas company Tatneft (TATN.MM) as ordered by a Paris-based arbitration panel.

Judges reject Ukraine’s appeal against a lower US court’s decision to uphold the judgment ordered by the arbitration panel established by the parties to examine Tatneft’s allegations of Ukrainian wrongdoing regarding the management shares of an oil refinery. Ukraine sought to overturn the sentence, which was upheld by foreign and US courts.

Tatneft has been in US federal court in Washington since 2017 to enforce the sentence. Ukraine said the case should not be heard in a US court, adding that Tatneft has not proven that Ukraine has assets in the United States, so there is no reason for the case is debated in the country. Tatneft said Ukrainian courts have proven to be untrustworthy and arbitration is routinely handled by US courts.

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The United States was not a party to the underlying dispute.

U.S. District Judge Colleen Kollar-Kotelly ruled in Tatneft’s favor in 2020, with the 2021 United States Court of Appeals for the District of Columbia Circuit later upholding enforcement of the judgment. Ukrainian lawyers asked the US Supreme Court to take up the case after the Russian invasion in February, arguing that the legal battle should be fought in Ukrainian courts.

Lawyers representing Ukraine have raised Tatneft’s ties to the Russian government and the ongoing invasion in asking the US High Court to hear the appeal. They said Tatneft used the case to target “third parties integral to Ukraine’s national security” before Russia invaded. Tatneft denied the allegations, saying the company did not target sensitive information and accusing Ukraine of obstruction.

The US Department of Justice has yet to weigh in on the case, although it has raised concerns that Ukrainian documents shared with Tatneft could be passed on to the Russian government. In March, due to the war, the parties agreed to suspend the proceedings before Kollar-Kotelly which aimed to identify Ukrainian assets likely to satisfy the judgment.

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Reporting by Jacqueline Thomsen; Editing by Will Dunham

Our standards: The Thomson Reuters Trust Principles.

Jacqueline Thomson

Thomson Reuters

Washington, DC-based Jacqueline Thomsen covers legal news related to politics, the courts, and the legal profession. Follow her on Twitter at @jacq_thomsen and email her at jacqueline.thomsen@thomsonreuters.com.

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