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Ways of compensation for damages caused by military aggression of the russian federation: key points

07/ 03/ 2023
  Today, it is difficult to imagine a business that did not suffer losses as a result of the military aggression of the Russian Federation. Many businesses have lost their assets due to their physical destruction. Many enterprises are actually deprived of the opportunity to effectively own their property, because it is located in a temporarily uncontrolled territory. There is no need to talk about the lost profits due to the forced shutdown of enterprises and destroyed supply chains. On March 7, 2023, an online meeting Ways of compensation for damages caused by the military aggression of the russian federation was held, organized by the EBA Odesa Legal Committee. The speakers of the event - lawyers of the GOLAW firm Roman Antoniv and Anastasia Nikolenko considered the main issues regarding the mechanisms of compensation for losses caused by the war, as well as practical cases regarding their compensation. The event was moderated by Inna Hryshkovets, manager of EBA Odesa Committees. Among the main theses of the speakers: The Ministry of Justice continues to work on the creation of the International Compensation Mechanism for compensation of losses for victims of the armed aggression of the russian federation, including businesses. Such a compensation mechanism will be based on a multilateral international agreement with the participation of partner states of Ukraine. At the state level, it is announced that the International Compensation Mechanism will consist of 4 elements: the International Registry of Losses, the Compensation Commission, which will consider applications for compensation, the Compensation Fund, from which compensation will be paid, and the Mechanism for implementing decisions made by the Compensation Commission. On February 17, 2023, it became known that the International Register of Damages Caused by russian aggression to Ukraine will be located in The Hague. In Ukraine, a new legal framework for recording and proving damages caused by the military aggression of the russian federation continues to be formed, methods for assessing the damages and damages caused by various types of losses are being developed and approved. In addition, on March 1, 2023, draft law No. 7198 was sent to the President of Ukraine for his signature, which aims to provide compensation to citizens for damaged and/or destroyed real estate from February 24, 2022. As of now, national courts already have a significant number of open proceedings and positive court decisions on recovery of war-related damages from the russian federation. Enforced execution of a national court decision on recovery of damages from the russian federation is possible in two ways: in Ukraine or in a foreign jurisdiction. Nevertheless, both options currently contain problematic aspects, namely, the effect of judicial immunity of the russian federation, in the event of an appeal to a foreign jurisdiction, as well as the absence of mechanisms by which it is possible to execute a decision on recovery of damages from the russian federation at the expense of the property of its residents. Investors also have the opportunity to receive compensation for violations of the provisions of the Agreement between the Cabinet of Ministers of Ukraine and the Government of the russian federation on the Promotion and Mutual Protection of Investments of 1998 by applying to investment arbitrations. In detail about all the features of potential ways of compensation for damages caused by the military aggression of the russian federation, see the video recording of the webinar.

Today, it is difficult to imagine a business that did not suffer losses as a result of the military aggression of the Russian Federation. Many businesses have lost their assets due to their physical destruction. Many enterprises are actually deprived of the opportunity to effectively own their property, because it is located in a temporarily uncontrolled territory. There is no need to talk about the lost profits due to the forced shutdown of enterprises and destroyed supply chains.

On March 7, 2023, an online meeting “Ways of compensation for damages caused by the military aggression of the russian federation” was held, organized by the EBA Odesa Legal Committee. The speakers of the event – lawyers of the GOLAW firm Roman Antoniv and Anastasia Nikolenko considered the main issues regarding the mechanisms of compensation for losses caused by the war, as well as practical cases regarding their compensation. The event was moderated by Inna Hryshkovets, manager of EBA Odesa Committees.

Among the main theses of the speakers:

  • The Ministry of Justice continues to work on the creation of the International Compensation Mechanism for compensation of losses for victims of the armed aggression of the russian federation, including businesses. Such a compensation mechanism will be based on a multilateral international agreement with the participation of partner states of Ukraine.
  • At the state level, it is announced that the International Compensation Mechanism will consist of 4 elements: the International Registry of Losses, the Compensation Commission, which will consider applications for compensation, the Compensation Fund, from which compensation will be paid, and the Mechanism for implementing decisions made by the Compensation Commission.
  • On February 17, 2023, it became known that the International Register of Damages Caused by russian aggression to Ukraine will be located in The Hague.
  • In Ukraine, a new legal framework for recording and proving damages caused by the military aggression of the russian federation continues to be formed, methods for assessing the damages and damages caused by various types of losses are being developed and approved. In addition, on March 1, 2023, draft law No. 7198 was sent to the President of Ukraine for his signature, which aims to provide compensation to citizens for damaged and/or destroyed real estate from February 24, 2022.
  • As of now, national courts already have a significant number of open proceedings and positive court decisions on recovery of war-related damages from the russian federation.
  • Enforced execution of a national court decision on recovery of damages from the russian federation is possible in two ways: in Ukraine or in a foreign jurisdiction. Nevertheless, both options currently contain problematic aspects, namely, the effect of judicial immunity of the russian federation, in the event of an appeal to a foreign jurisdiction, as well as the absence of mechanisms by which it is possible to execute a decision on recovery of damages from the russian federation at the expense of the property of its residents.
  • Investors also have the opportunity to receive compensation for violations of the provisions of the Agreement between the Cabinet of Ministers of Ukraine and the Government of the russian federation on the Promotion and Mutual Protection of Investments of 1998 by applying to investment arbitrations.

In detail about all the features of potential ways of compensation for damages caused by the military aggression of the russian federation, see the video recording of the webinar.

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