International Arbitration at the Time of the Russian War against Ukraine - ARIA - Vol. 34, No. 2

Olexander Droug is a partner and head of international arbitration practice of Sayenko Kharenko. He has over 15 years of experience in dispute resolution and restructuring with a special focus on commercial and investment arbitration. Mr. Droug advises clients on all stages of dispute resolution proceedings, including in complex multi-jurisdictional proceedings involving Ukraine and foreign states, as well as arbitrations under arbitration rules of all major international arbitration institutions. More information is available via the link: https://sk.ua/team/olexander-droug/.

Andriy Stetsenko is formerly a senior associate with international arbitration practice of Sayenko Kharenko.

Katalina Shkuro is an associate with international arbitration practice of Sayenko Kharenko. She has over 3 years of experience advising clients on dispute resolution matters, including international commercial and investment arbitration, as well as cross-border litigation. Her experience includes representing clients in complex multi-jurisdictional litigation proceedings and arbitrations under arbitration rules of major international arbitration institutions, including the investor-state disputes

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Originally from The American Review of International Arbitration (ARIA)

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I. INTRODUCTION

The Russian full-scale invasion of Ukraine in February 2022 created a border which divided modern history into “before” and “after” this event. The globalized world, weakened by the pandemic, faced new challenges: the supply chains were disrupted, energy prices rose, the Black Sea blockade created a food crisis, inflation increased, and the global economy may soon face a global recession.

International arbitration did not stay away from the challenges, but rather became one of the potential tools for compensation of war damages sustained by Ukraine, its businesses, and citizens. This article is aimed at analysing the impact of the Russian-Ukrainian war on international arbitration and at how international arbitration can help to restore justice for those who suffered because of this war.

II. THE IMPACT ON INTERNATIONAL COMMERCIAL ARBITRATION

Global events always affect the subject matter of arbitration disputes. The reduction of supplies of Russian oil and gas to the European region and the unilateral change of payment terms by Russian companies gave rise to claims across the supply chain and price review arbitrations. Four energy arbitrations involving major oil and gas companies already were initiated as a result of the war in Ukraine. These are reported cases, while the actual number of pending energy cases caused by the Russian invasion is unknown and will certainly increase over time.

Another tendency is the spike in arbitrations related to the early termination of contracts, including those due to force majeure. This tendency is particularly noticeable in commodities arbitrations. The blockade of the Ukrainian Black Sea ports by the Russian navy caused tons of commodities to be stuck at the seaport terminals in Ukraine.

The Russian-Ukrainian war also showed the readiness of the arbitral institutions to quickly adapt to any fast-changing circumstances, no matter how hard they proved to be.