Fridman's $16 Billion Arbitration Battle with Luxembourg

Mikhail Fridman, a Russian billionaire, has requested the Hong Kong International Arbitration Centre to handle his $16 billion dispute with Luxembourg. The conflict arises from Western sanctions on Fridman after Russia's invasion of Ukraine. Luxembourg's state ministry confirmed the arbitration, with Fridman basing his claim on a 1989 treaty protecting investors' assets.

Russian billionaire Mikhail Fridman has submitted a request for a $16 billion arbitration dispute with Luxembourg to be administered at the Hong Kong International Arbitration Centre (HKIAC), according to documents seen by Reuters. Fridman is claiming damages for assets frozen due to Western sanctions imposed after Russia's February 2022 invasion of Ukraine.

Fridman's request, filed on Aug. 13, cited a 1989 treaty between Belgium, Luxembourg, and the Soviet Union that protects investors' assets from expropriation or nationalisation. Luxembourg's State Ministry has confirmed the initiation of arbitration proceedings against the State of the Grand-Duchy of Luxembourg.

The government is reviewing the claim and the next steps with its legal advisers, according to an official statement. The HKIAC did not immediately respond to an email inquiry sent outside regular office hours.

In an April article for The Spectator, Fridman stated that his assets and businesses in Britain and the EU had been effectively nationalised without compensation, based on what he termed the subjective views of anonymous civil servants. Fridman and his business partner Petr Aven briefly overcame EU sanctions in April, but both remain under punitive measures extended in March 2023. The pair has appealed this extension.

Fridman's filing proposes an ad hoc arbitration under United Nations Commission on International Trade Law (UNCITRAL) rules. According to the Investment Arbitration Reporter, Fridman's case is the first known treaty arbitration against Luxembourg.

($1 = 91.5000 roubles)

(With inputs from agencies.)