Russian Oligarchs are Using European Treaties to Sue Ukraine for Vast Sums

Russian billionaire Mikhail Fridman and other oligarchs are exploiting European investment treaties to sue Ukraine for hundreds of millions, and in some cases billions, of dollars, according to a new investigation by Follow the Money.

The ongoing lawsuits stem largely from Ukraine’s wartime nationalization of Sense Bank, one of the country’s largest lenders, which until mid-2023 was controlled by Fridman and fellow Russian billionaire Petr Aven, according to the report. Ukrainian authorities seized the bank in July 2023, arguing that allowing sanctioned Russians to control critical financial infrastructure posed a national security risk.

In January 2024, Luxembourg-based ABH Holdings filed a claim against Ukraine at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), demanding more than $1 billion in compensation. The claim relies on an investor-state dispute settlement (ISDS) clause in a 1996 investment treaty between Ukraine, Belgium and Luxembourg, Follow the Money reported.

Legal experts warn the case could set a far-reaching precedent if successful. Javier García Olmedo of the University of Luxembourg told Follow the Money that although Ukraine has terminated its bilateral investment treaty with Russia, Russian investors can still pursue claims through European holding companies.

“Even if the ultimate owner is Russian,” he said, investors can use companies incorporated in countries such as Belgium or Luxembourg to access arbitration.

An analysis of the ICSID database by Follow the Money shows that Russia-linked entities have brought Ukraine to arbitration at least seven times since Russia’s full-scale invasion in February 2022, often through subsidiaries registered in European jurisdictions. Four of those cases were filed using companies based in Belgium, Luxembourg or the Netherlands.

Ukraine is already among the most frequently sued countries in the world under ISDS mechanisms, according to UN data cited in the report.

The Netherlands has 95 investment treaties and is a favored jurisdiction for filing claims, FTM said. Before Russia’s annexation of Crimea in 2014, no claims against Ukraine were filed through Dutch treaties.

One of the most striking examples involves Dutch-based E.M.I.S. Finance, which filed a $400 million claim against Ukraine at ICSID for the nationalization of Sense Bank. Follow the Money found indirect links between the company and Fridman through personnel connections to Alfa Asset Management Europe, a Luxembourg firm formerly owned by sanctioned Russian oligarchs.

The report also documents how Fridman is using investment treaties to challenge sanctions within the EU. In 2024, he successfully challenged aspects of his EU sanctions listing, though he remains sanctioned. That same year, he filed a $16 billion claim against Luxembourg over frozen assets in a case that remains pending.