Russian billionaire Fridman seeks to settle $16 bln Luxembourg dispute in Hong Kong

Russian billionaire Mikhail Fridman has submitted a request that a more than $16 billion arbitration dispute with Luxembourg be administered at the Hong Kong International Arbitration Centre (HKIAC), documents seen by Reuters showed.

Fridman is seeking damages from Luxembourg on assets frozen in the country due to Western sanctions imposed on him in response to Russia’s February 2022 invasion of Ukraine.

Fridman’s request, filed on Aug. 13, invoked a 1989 treaty between Belgium, Luxembourg, and the Soviet Union that protects investors’ assets from being expropriated or nationalized.

The Luxembourg government, which previously said it was aware of an earlier demand by Fridman, had no immediate comment. The HKIAC did not immediately respond to an email, sent outside its regular office hours, seeking comment.

Writing in The Spectator magazine in April, Fridman said his “assets and businesses in Britain and the EU (had) been in effect nationalized, with no compensation, and no proof of any wrongdoing other than the subjective view of anonymous civil servants.”

Fridman and his long-time business partner Petr Aven won a rare victory against EU sanctions in April, with initial sanctions on the pair deemed to have been imposed without sufficient evidence of support for the Kremlin’s actions or policies against Ukraine.

Both men remain under punitive measures, as sanctions were extended in March 2023. Fridman and Aven have appealed that extension.

Sanctions are at the heart of this case, meaning finding a jurisdiction that has not imposed sanctions on Russia, such as Hong Kong, was key.

Fridman proposed proceeding with an ad hoc arbitration under United Nations Commission on International Trade Law (UNCITRAL) arbitration rules, the documents showed.

The Investment Arbitration Reporter reported that Fridman’s case was the first known treaty arbitration against Luxembourg.