UK energy company linked to sanctioned oligarch sues Ukraine

A UK energy company linked to sanctioned oligarch Vadym Novynskyi is suing Ukraine through a secretive system of private arbitration.

Enwell Energy is bringing an investor state dispute settlement (ISDS) claim against Ukraine after its oil and gas exploration licences were suspended in 2023.

ISDS enables foreign investors to sue a government if their investments in that country are threatened. Cases are heard at closed-door tribunals in private arbitration processes and damages often run into the billions.

Novynskyi is a Russian-born Ukrainian businessman who has been subject to sanctions since late 2022. Enwell Energy argues it distanced itself from Novynskyi in the same year, transferring company ownership to Cyprus-based trustees.

Svitlana Romanko, an environmental lawyer and director of Ukrainian advocacy group Razom We Stand, argues that Enwell’s claim is “not convincing”.

Ukrainian authorities “have consistently recognised Vadym Novynskyi as the ultimate beneficial owner, despite Enwell’s attempts to register new owners. That suggests the authorities have reasonable grounds to believe that effective control has not genuinely changed,” she said.

Enwell is registered in the UK at Companies House but operates exclusively in Ukraine, where it has four oil and gas fields in the Poltava and Kharkiv regions. It made $44.9m (£33.5m) in revenue in 2024. It declined to comment on its relationship to Novynskyi or on the ISDS claim it is bringing against Ukraine.

Sixteen ISDS claims have been brought against Ukraine and its allies by sanctioned individuals and companies since Russia’s 2022 full-scale invasion. The claims amount to at least $20bn.

Law firms in jurisdictions that are ostensibly supporters of Ukraine stand to benefit from these claims. Three Crowns, a law firm based in London, Paris and Washington, is representing Enwell in its claim.

“UK investors are among the most aggressive users of ISDS and law firms in the City of London provide the engine of the system,” said Cleodie Rickard, policy and campaign manager at Global Justice Now.

Two London-based arbitrators – Baiju Vasani and Alexander Yean of Twenty Essex chambers – have been appointed to the arbitration panels by three of the eight companies bringing ISDS claims against Ukraine.

London is “a hub for arbitration”, added Eunjung Lee, senior policy adviser at E3G. “[The city’s] deep involvement – including in cases linked to sanctions – raises a question about whether the UK’s current approach to ISDS aligns with its foreign-policy objectives and its commitment to rules-based global governance.”

A spokesperson for Three Crowns said: “The firm maintains rigorous procedures to ensure full compliance with all applicable sanctions regimes and does not act for any individual or entity where doing so would contravene those requirements.”

Neither Vasani nor Yean responded to requests for comment.

Last month, it was revealed that sanctioned Russian-Israeli oligarch Mikhail Fridman is bringing an ISDS claim against the UK. Campaigners are concerned Fridman’s case could have a chilling effect on UK policy-making, dissuading the government from imposing further sanctions on oligarchs.

Earlier this month, former Chelsea Football Club owner Roman Abramovich was warned by the chancellor, Rachel Reeves, and the culture secretary, Lisa Nandy, that he must donate £2.5bn to humanitarian causes in Ukraine. Abramovich committed to hand over the funds from the sale of Chelsea in 2022, following sanctions imposed on him by the UK government over his close ties to Putin.

Since then, the funds have been frozen in a UK bank account with the government now considering legal action should Abramovich fail to donate the money. “The clock is ticking on Roman Abramovich to honour the commitment he made,” said Keir Starmer, the prime minister. “This government is prepared to enforce it through the courts.”

The Department for Business and Trade and HM Treasury did not respond to requests for comment.

Photograph by Sergii Kharchenko/NurPhoto/Getty