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Ukraine’s Oschadbank starts arbitration process vs Russia over Crimea assets

January 19, 2016, 16:34 UTC+3

Oschadbank representatives, however, could not specify the arbitration tribunal, at which the bank’s claim would be examined

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© Mikhail Pochuyev/TASS

KIEV, January 19. /TASS/. The Ukrainian state-controlled lender Oschadbank has issued an official notice of an arbitration process, thus initiating proceedings against Russia to claim the return of Crimean investments, the bank’s press office reported on Tuesday.

When asked by a TASS correspondent, Oschadbank representatives, however, could not specify the arbitration tribunal, at which the bank’s claim would be examined.

"Oschadbank has filed a notice of an arbitration process against the Russian Federation in compliance with the 1976 arbitration rules of the United Nations commission for international trade law," the Oschadbank press office reported.

"The bank acts as an investor and as a legal entity under private law to seek economic protection and restore investments lost in Crimea," the press office said.

Ukraine made the first step towards initiating legal proceedings against Russia over Crimean assets in the first half of July 2015. At that time, Kiev sent an official notice to Russia’s authorized representatives on claims, which "arise from the illegal use of investments in Crimea," as the bank noted.

The Ukrainian side demanded that Russia "compensate Oschadbank for the damage done."

As Oschadbank’s managers say, the arbitration process may create a certain precedent.

‘We’re ready for the struggle in the legal field to protect Oschadbank’s legitimate rights and investments and give a clear signal to other enterprises of our country so that they can rely on our experience and can also safeguard their rights," Oschadbank CEO Andrei Pyshny said.

The Crimean authorities held a referendum on March 16, 2014 on local residents’ attitude to Crimea’s reunification with Russia. With a record turnout of over 80%, 96.7% of Crimean residents and 95.6% of electors living in the Crimean port city of Sevastopol voted for the Black Sea peninsula’s reintegration into Russia.

The treaty on integrating the Republic of Crimea and the city of Sevastopol into Russia was approved by both houses of the Russian parliament, after which President Vladimir Putin signed a federal law on incorporating two new constituent entities into the Russian Federation.

Ukraine, the United States and the European Union have refused to recognize Crimea as part of Russia, despite the referendum’s convincing results.

Crimea used to be part of Russia from 1784 until 1954 when Soviet leader Nikita Khrushchev handed it over to the Ukrainian Soviet Socialist Republic in a voluntaristic act. Crimea remained part of independent Ukraine after the USSR collapsed in 1991.

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