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02.08.2022

Losses caused to Ukraine as a result of the armed state of the Russian Federation. Problems of property identification, its evaluation and jurisdiction.

On February 24, 2022, the state of Ukraine faced an unprecedented in its essence and form of armed aggression from rf. Since the beginning of such aggression until the beginning of June 2022, the world has already seen and most likely will still see a lot of examples of violations of international law by Russia, […]

On February 24, 2022, the state of Ukraine faced an unprecedented in its essence and form of armed aggression from rf. Since the beginning of such aggression until the beginning of June 2022, the world has already seen and most likely will still see a lot of examples of violations of international law by Russia, starting with the commission of crimes against humanity, violation of the rules for the treatment of prisoners of war, bombarding and destruction of civilian and medical facilities, to crimes against life and health (including sexual health) of citizens of Ukraine. Unfortunately, the world community and the “Western world” cannot stop these horrific crimes by direct military confrontation for many reasons, including the nuclear status of the Russian Federation, veto power at UN SC. But the experience of the two previous world wars (as well as the local wars over the past 100 years) showed quite successful examples of bringing aggressors to justice in accordance with international law. In this way, it is extremely important to fix all crimes committed by the aggressor for the subsequent recovery of material damage.

Before I start the main discussion, it is also worth paying attention to one unique feature of the war in Ukraine, namely, the fact that this is the first war in Europe, on the territory of a state with a developed media space, communication technologies, which is well integrated into the global information community, and which cannot be blocked by the aggressor, which in turn leads to a strong information resonance in the world (unlike the war in Syria or Afghanistan).

So, we understand that we live in a world of finite things, and in the event of the end of the war in Ukraine, in one form or another, but with the preservation of Ukrainian statehood, the question of compensation for the harm caused to the state of Ukraine, individuals and legal entities, residents of Ukraine, will automatically arise, and these details will be discussed below.

It is worth starting the issue of compensation of damage with the understanding that the most common are types of damage may be subject to compensation: harm caused to the life or health of a physical entity; damage caused to the property of a legal and/or physical entity; moral damage to a physical entity; lost profit of a legal and/or physical entity. One way or another, all of the mentioned damage can be compensated in monetary terms, since the obligation of the aggressor state to restitute the damage by restoring the previous state of the property (health or life) is not possible for many reasons. In a detailed search for a mechanism for assessing the damage caused by the aggressor state as a result of illegal military aggression, we are faced with the problem of the lack of international legal regulation of the mechanism and procedure for fixing such damage. Guidance note for the damage lose and needs assessment (DaLA) methodology developed by Economic commission for Latin America and Caribbean (ECLAC) in 1970`s and used by Global Facility for Disaster reduction and Recovery (GFDRR) of the World Bank. But this document is advisory in nature and is not adopted at the conventional level, and is mainly aimed at assessing damage from natural disasters, and not from wars or hybrid military aggression. As an intermediate conclusion, we can conclude the need for international, conventional adoption of a mechanism for assessing the damage caused as a result of military aggression. developed by Economic commission for Latin America and Caribbean (ECLAC) in 1970`s and used by Global Facility for Disaster reduction and Recovery (GFDRR) of the World Bank. But this document is advisory in nature and is not fixed at the conventional level, and is mainly aimed at assessing damage from natural disasters, and not from military operations.

Separately, it is worth noting that the war in Ukraine for the first time in the history of military conflicts showed that property that was simply stolen or illegally seized by a aggressor state can be tracked1 with the help of digital and satellite instruments, even more, the property can be identified, which, in turn, gives hope for the development of new international mechanisms for blocking such frankly barbaric behavior.

Further, after resolving the issue with the form and procedure for recording and assessing the damage caused to the affected state, another, no less important issue follows, namely the jurisdiction (subjective, territorial, substantive) of the damage recovery dispute, whether the aggressor state has immunity reinforced in the UN Charter2 (1945) and disclosed in the Declaration on the Principles of International Law3 (1970). For subsequent conclusions, it is necessary to briefly review each aspect of the mentioned questions.

As for the subject jurisdiction of disputes on damage recovery caused by the military aggression of the russian federation against Ukraine, it should be noted that the plaintiffs can be: the state of Ukraine; individuals and/or legal entities. As we know, according to the doctrine of international law, physical entity as well as private legal entity are not subjects of international law, and therefore cannot act as plaintiffs and/or applicants in international courts (ICJ, ICC, ad hoc military tribunals, etc.). And this, in turn, means that physical and legal entities of private law have not so many alternatives for damage recovery, among them could possibly be: the ECHR, the state courts of Ukraine or the court authorities of third countries, by the location of the aggressor’s assets. The ECHR is also not a good alternative because according to information from the media4, the debt of the russian federation for compensation for damages under the decisions of the ECHR at the beginning of June 2022 amounted to 74 million euros, excluding a record 1.9 billion euros in favor of the former shareholders of the YUKOS oil concern, which indicates the unwillingness of the russian federation to comply with the decisions of the ECHR. Also, rf adopted the law5, and signed it on June 11, which does not allow to apply the ECHR on the territory of rf from March 15, 2022. As for the territorial jurisdiction and the process of filing to the Ukrainian courts, this is possible and effective, but the subsequent process of recognition and enforcement of such a decision at the location of the assets of the russian federation is problematic and quite costly, same as filing of the Ukrainian plaintiff directly to court of the state at the location of the asset of the rf at third countries.

Also, we understand, according to international acts, the state of the russian federation has immunity and, as a general rule, cannot act as a defendant in the national courts of Ukraine. But the Supreme Court of Ukraine states6 lack of immunity in the states of the rf on the basis of the following: “Maintaining the jurisdictional immunity of the rf will deprive the plaintiff of effective access to Ukrainian court to protect their rights, which is incompatible with the provisions of paragraph 1 of Art. 6 ECHR. Also, the judicial immunity of the rf does not apply due to common international law, codified in the UN Convention on Jurisdictional Immunities of States and Their Property (2004)7. According to Art. 12 of the UN Convention on Jurisdictional Immunities of States and Their Property (2004), which reflects common international law, a state does not have the right to refer to judicial immunity in cases involving the infliction of harm to health, life and/or property, if such harm is wholly or partially caused on the territory of the court of the state and if the person who caused the harm was at that time in the territory of the state of the court. Article 12 reflects the basis for limiting the judicial immunity of a foreign state due to the infliction of physical harm to a physical entity or damage to property, the so-called “tort exception” (tort exception)”. Meanwhile, with regard to the UN Convention on Jurisdictional Immunities of States and Their Property (2004), it should be noted that it has not entered into force, since 30 or more UN member states have not ratified it, but russia ratified this Convention in 2006. European Convention on State Immunity (1972)8 is not ratified by Ukraine or Russia.

Also, the existence of the right to compensation of privat individuals in the national courts is confirmed by the decisions of the Greek courts9 in the decision in the case against Germany (2000), in which the jurisdiction of the case was recognized and the claims of private entities were considered. The review of the latter case shows the difficulties that victims may face with when they trying to enforce the decision in a successful case. The Greek Supreme Court ruled an absentee decision against Germany and awarded damages. However, in order to enforce a decision about confiscate the property of a foreign state, according to Greek law, the permission of the Greek government is required, and the government in this particular case refused to issue the permission. After that, the plaintiffs tried to enforce the decision in the German courts on the basis of a mutual agreement on the recognition and enforcement of court decisions. In June 2003, the German Supreme Court refused to recognize the decision of the Greek Supreme Court on the grounds that the Greek courts did not have proper jurisdiction, since the acts in question – the repressions against civilians during the Nazi occupation of Greece – were sovereign acts and, therefore, they were applied the principle of sovereign (judicial) immunity.

With minor success, privat entities defend their rights related to violations of international law by states in international quasi-courts. Until recently, such courts took the form of “mixed commissions for the consideration of mutual claims.” In these ad hoc arbitration tribunals, created by treaties, usually dual, individuals and companies are given the opportunity, on an “exclusive” basis, to bring claims against governments.

As an example of such commissions is The Iran–United States Claims Tribunal (IUSCT)10 is an international arbitral tribunal that resolves claims between the nationals and governments of the Islamic Republic of Iran and the United States of America. It was established on 19 January 1981 by the Algiers Declarations, an Algeria-mediated agreement between the US and Iran to resolve the Tehran hostage crisis. Seated in The Hague, Netherlands, the Tribunal hears disputes between both individuals and the two governments.

Also, The United Nations Compensation Commission (UNCC) was created in 1991 as a subsidiary organ of the United Nations Security Council. Its mandate is to process claims and pay compensation for losses and damage suffered as a direct result of Iraq’s 1990–1991 invasion and occupation of Kuwait which started the Gulf War. These losses included claims for loss of property, deaths, loss of natural resources, damage to public health and environmental damage.

Further, in this context, it is worth mentioning the Eritrea-Ethiopia Claims Commission. The Claims Commission was established to “decide through binding arbitration all claims for loss, damage or injury by one Government against the other” related to the armed conflict and resulting from “violations of international humanitarian law, including the 1949 Geneva Conventions, or other violations of international law.” The Parties were entitled to submit claims on their own behalf and on behalf of their nationals (including both natural and legal persons), or in appropriate circumstances, persons of Ethiopian or Eritrean origin who were not nationals.

As for the proven and reliable damage recovery mechanism, then today there is no single and effective one. Even the International Court of Justice, if it recognizes its jurisdiction, will not be able to enforce its decision, due to the right of veto of the russian federation in the UN Security Council.

Summarizing mentioned above ideas regarding jurisdiction and immunity, it should be noted that today there is no clear and accessible mechanism for recovering damages from the state that carried out an act of armed aggression, either by private individuals or by the state as such if the aggressor is not defeated.

1https://edition.cnn.com/2022/05/12/europe/russia-ship-stolen-ukraine-grain-intl-cmd/index.html

2https://www.un.org/en/about-us/un-charter

3https://www.un.org/ruleoflaw/files/3dda1f104.pdf

4https://oopstop.com/the-council-of-europe-announced-the-debt-of-russia-for-compensation-to-the-ecthr-for-e-74-million/

5https://www.rferl.org/a/russian-duma-votes-to-quit-european-court-human-rights/31887853.html

6https://supreme.court.gov.ua/supreme/pres-centr/news/1282788/

7https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=III-13&chapter=3&clang=_en

8https://rm.coe.int/16800730b1

9Administrative Court of Appeal of Munster, 9 April 1952, International Law Reports, Vol. 20, 1952, p. 632; Prefecture of Voiotia v. Federal Republic of Germany, Case No. 137/1997; Court of First Instance of Leivadia, 30 October 1997, American Journal of International Law, Vol. 92, 1997, p. 765; Case No.11/2000, Hellenic Supreme Court, 4 May 2000.

10https://iusct.com/#