The Russian annexation of Crimea in March 2014 and subsequent military actions in Eastern Ukraine left Ukraine reeling. It took a while for the country to develop a strategy and institute its first arbitration and court actions against the Russian Federation. These first legal challenges are now bearing fruit, as several landmark decisions have recently been delivered by major international dispute resolution venues.
1) The application brought by Ukraine against the Russian Federation before the International Court of Justice at The Hague (ICJ), in which the court partially approved the request for the indication of provisional measures and established its prima facie jurisdiction to the extent that the dispute between the parties relates to the “interpretation or application” of the International Convention on the Elimination of All Forms of Racial Discrimination and the Terrorism Financing Convention.
2) One of six inter-state applications brought by Ukraine against the Russian Federation before the European Court of Human Rights (ECHR) regarding the events leading up to and following the assumption of control by the Russian Federation over the Crimean Peninsula from March 2014 to the beginning of September 2014, which was found admissible by the court;
3) The Law Debenture Trust Corporation Plc v Ukraine dispute, which deals with Ukraine’s non-payment of notes solely held by the Russian Federation and serviced by the Trust, in which the High Court of England and Wales (EWCH) granted summary proceedings in favor of the claimant.
4) The Gazprom v Naftogaz dispute pending before the Stockholm Chamber of Commerce arbitration tribunal, which recently issued a ruling upholding part of Naftogaz’s claims involving a gas sales contract;
5) Eight Permanent Court of Arbitration (PCA) investment disputes brought by various Ukrainian companies under the 1998 Ukraine-Russia bilateral investment treaty relating to the annexation of Crimea and subsequent loss of their property (five of these disputes have already passed the jurisdictional phase).
Decisions on admissibility have not yet been rendered in four other cases brought by Ukraine before the ECHR concerning alleged human rights violations that occurred in Eastern Ukraine prior to September 2014, subsequent violations in Crimea and Eastern Ukraine before the summer 2015, and the abduction of three groups of children in Eastern Ukraine. One of the cases was struck off the list because Ukraine withdrew its application.
In addition, there is also arbitration pending before the PCA under the UN Convention on the Law of the Sea, in which Ukraine seeks to vindicate its rights as a coastal state in maritime zones adjacent to Crimea in the Black Sea, the Sea of Azov, and the Kerch Strait. The tribunal held its first procedural meeting in May 2017, and thus we expect arbitration to kick off soon.
While it is too early to draw conclusions, Ukraine’s strategy seems to be successful. Although it might be difficult to make the Russian Federation comply with the decisions of the ICJ and the ECHR due to the absence of effective means of enforcement, the value of these decisions, if granted in Ukraine’s favor, should not be underestimated.
In the absence of a condemnation by the UN Security Council regarding Crimea’s annexation and on-going Russian military actions in Eastern Ukraine, decisions of the UN and regional judicial bodies are crucial. Otherwise, in a few years, more examples of states recognizing Russian actions as lawful may follow.
While it is believed that Ukraine could have been more creative with its ICJ claim, Ukraine’s claims against the Russian Federation are limited to international instruments to which both states are bound.
Additionally, the number of these instruments shrinks each time Ukraine tries to employ them against the Russian Federation. For instance, it took the Russian Federation only two days to withdraw its signature from the Rome Statute after the ICC Prosecutor published its 2016 report on its preliminary examination of the situation in Crimea and Eastern Ukraine and alleged crimes.
While the EWCH has, in a way, predetermined the result of The Law Debenture Trust Corporation Plc v Ukraine by granting a summary judgment to the claimant, there are high prospects that the Gazprom v Naftogaz case will have a favorable outcome for Ukraine. The fact that the SCC found that the “take-or-pay” obligation under the gas sales contract does not apply retroactively for 2012-2014, 2015, and 2016 is already a huge relief for Ukraine.
Similarly, positive jurisdictional decisions of the PCA recognizing that the 1998 Russia-Ukraine BIT protects investments by Ukrainian companies in the Crimean Peninsula will likely encourage more claims to be filed. Unlike in other matters, the Russian Federation does not participate in these investment arbitrations. However, with these claims mounting up, it will have to intervene eventually either at the merits stage or later, by challenging the award in The Hague or by opposing its recognition and enforcement elsewhere.
By Kostiantyn Likarchuk, Partner, Kinstellar Ukraine
This Article was originally published in Issue 4.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.