Originally from The American Review of International Arbitration (ARIA)

PREVIEW PAGE

I.    INTRODUCTION         

Russia’s full-scale aggression rocked the already strained international legal order. It accentuated the unpleasant truth about the limits of the United Nations (UN) system of conflict resolution and brought to light the lack of efficient compensation mechanisms for grave violations of international law. The imposition of unprecedented sanctions and other restrictive measures on Russia impacted many ongoing proceedings and forced arbitral institutions to seek clarifications and licenses. 

       More pertinent for Ukrainian legal practitioners than these concerns is the obvious question of how to secure proper compensation for the havoc wreaked on Ukraine and Ukraine-based businesses by Russia. Various options are being discussed. They range from arbitration claims against Russia for properties damaged or expropriated on the temporarily occupied territories to the establishment of a treaty-based compensation mechanism akin to the UN Compensation Commission established by the Security Council in the wake of the Iraqi war against Kuwait. 

       Each of the proposed compensation mechanisms has serious flaws:

Limited amount of compensation if proceedings are initiated before the European Court of Human Rights, let alone the possibility of claiming compensation only for damages that occurred before 16 September 2022. Furthermore, Russia has a very poor track-record on paying under court judgements, being in default for “more than €2 billion in damages awarded by the court in more than 1800 cases.”  The same goes for implementing court recommendations as it is “reported that 90% of the leading judgments against Russia from the last ten years are still yet to be implemented;”