Photo of David Pinsky

David Pinsky

David Pinsky is a partner in the firm's international arbitration and litigation practices. David's recent work includes winning a $5-billion award for Ukraine’s state-owned oil and gas company, Naftogaz, in an investment arbitration against Russia, in response to Russia’s unlawful expropriation of Naftogaz’s assets upon annexing the Crimean Peninsula in 2014, as well as representing Radio Free Europe/Radio Liberty in an investment dispute against Russia.

In addition to his disputes work, David also counsels clients on how to structure their cross-border investments in order to be well-positioned in case of future disputes with foreign governments, and he has advised multiple clients in connection with their exits from Russia following the Kremlin’s full-scale invasion of Ukraine in February 2022.

David is a member of Covington’s Management Committee, and he practices and lives in New York City.

David's arbitration practice focuses both on investor-state and on commercial disputes, often arising in Russia and Eastern Europe and in the energy sector. He has handled administered proceedings under the ICC, SCC, LCIA, ICDR, and AAA Rules, as well as ad hoc proceedings under the UNCITRAL Rules. On the commercial side of his arbitration practice, David has particular expertise in disputes arising under the Uniform Commercial Code. In U.S. litigation, his practice focuses on international law issues, including litigation in support of arbitration and applications for discovery under 28 U.S.C. § 1782.

David also maintains an active pro bono practice, representing journalists and other media professionals who seek asylum in the United States. An émigré himself, David has won asylum and other forms of immigration relief for clients from Russia, Uzbekistan, Iran, and Afghanistan.

Before joining Covington in 2005, David lived in Moscow as a U.S. State Department-sponsored fellow where he studied the challenges facing Russia's press.

Contact:Read more about David PinskyEmail

On Sunday, July 16, Russian President Vladimir Putin signed a decree putting shares of Danone Russia JSC, owned by French yogurt maker Danone, and of Baltika Brewing Company, owned by Danish brewer Carlsberg A/S, under “temporary management.”

The Kremlin has since reportedly appointed Yakub Zakriev, deputy prime minister and agriculture minister of Chechnya, as head of the Danone business.[1] Mr. Zakriev has been described as a close ally of Ramzan Kadyrov, the notorious leader of the Chechen Republic, and himself a close ally of President Putin.[2] Meanwhile, Taimuraz Bolloev, a longtime friend of Putin, has been installed as director of Carlsberg’s Baltika business.[3]

These recent seizures follow a decree Putin signed in April, laying the groundwork to expropriate, damage, or otherwise impair the investments of companies from “unfriendly” countries—including the U.S., UK, Canada, all EU member states, Japan, Singapore, and South Korea.[4] This is the second time Russia has used the decree to seize assets. Previously, Russia took control of utilities owned by Finland’s Fortum Oyj and Germany’s Uniper SE.[5]

These Russian actions demonstrate the significant risks for foreign companies that continue to operate in Russia and signal further potential asset seizures, including the possible transfer of foreign assets to regime-friendly owners. Russia’s measures appear to constitute uncompensated expropriations, for which investors could seek redress under Russia’s network of bilateral investment treaties (BITs).[6]

In prior Covington alerts, we have discussed how foreign investors in Russia can protect their investments from Russian retaliatory measures by ensuring that they have access to international arbitration, including through BITs. We also have highlighted certain key protections available under BITs that may provide recourse to foreign investors affected by Russia’s recent measures. In this alert, we focus on those protections under Russian BITs of most direct relevance to foreign investors whose assets have been expropriated or that have had the management of that investment obstructed by Russia’s actions, present and future.

Key Protections in Russian BITs

Russia has BITs in force with over 60 countries, including many EU members (such as Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Lithuania, Italy, Luxembourg, the Netherlands, Romania, Slovakia, Spain, and Sweden) and countries such as Canada, Japan, Korea, Switzerland, the UK, and Ukraine. There is no BIT between Russia and the United States, but U.S. companies may nonetheless benefit from BIT protection if they hold their investments in Russia through a third country that does have a Russian BIT.

In its BITs, Russia has committed to, among other things, treat investors from the relevant countries in a fair and equitable manner, not to discriminate against such investors on the basis of nationality, not to expropriate their investments except under certain conditions and upon payment of adequate compensation, and to guarantee their right to freely transfer payments related to their investments out of Russia. All of these protections are relevant in the present context.Continue Reading Protecting Against Russia’s Asset Seizures: Investment Treaties May Provide a Remedy for Foreign Investors