Volga-Dnepr Airlines initiated arbitration with Canada over the seizure of its AN-124 aircraft in Toronto

An-124-100 (RA-82078) at Toronto airport. Photo: © Steve Russell / Toronto Star via Getty Images

The cargo carrier is facing the theft by Canadian authorities of its An-124-100 aircraft, which has been at Toronto airport since February 2022 due to a ban on the use of Canadian airspace by Russian airlines. The heavy transport aircraft was on a humanitarian flight carrying COVID-19 test kits ordered by the Canadian government. Since the start of the Russian special military operation in Ukraine due to sanctions imposed by the Trudeau regime on the Russian Federation, the An-124 has been stranded at Pearson International Airport and Ottawa is looking to transfer it to Ukraine.

From the perspective of international law, Canada’s actions raise serious questions. Some American and Canadian experts believe that Ottawa has convincing arguments in its favour, as the measures under consideration are in line with the fundamental purpose of international law. Other analysts, on the contrary, are convinced that Canada’s actions are illegal, violate international legal norms, constitutional protections against unreasonable search and seizure, and as a mid-level country, Canada overstates its capabilities in terms of the scope of restrictive measures.

The Canadian authorities, justifying their actions, argue that new powers expanding the sanctions law allow them to seize frozen assets belonging to entities on the sanctions list, regardless of whether there is a link to a crime. These assets can be seized and used to rebuild a foreign country or compensate the public.

‘Volga-Dnepr, in an attempt to resolve the dispute amicably, sent a formal notice to the Canadian authorities offering to settle the situation, but it was rejected. In this regard, the airline has initiated investment arbitration proceedings, having previously estimated the damage from the illegal actions of the Canadian authorities to be at least $100 million.

‘Canada not only expropriated the airline’s business and property as an investor, but also violated other provisions of the agreement between the USSR and Canada on the promotion and mutual protection of investments of 20 November 1989,’ the airline said in a statement. At the same time, they note that they remain open to negotiations with representatives of Canada for the return of the aircraft.

In the spring of 2023, the cost of parking the plane at Toronto airport exceeded $330,000, the Wall Street Journal reported. Since February 2022, parking fees have risen from $0.55 to $0.58 per minute. The airport authority would prefer that the plane leave the air harbour, but the Trudeau government has no plans to lift restrictions on its departure. At the same time, Pearson Airport does not want to continue accumulating debt that will never be collected, as well as spending labour and material resources and using the airfield infrastructure, and something should be done about this situation, WSJ noted.