Can Ukrainians Claim Compensation for War Damage under the Russia-Ukraine BIT? An International Investment Law Experiment

Abstract

In February 2022, Russia launched a full-scale war against Ukraine. The aggression was condemned by most of the international community as an act in gross violation of international law and gave rise to a deliberation about the reparation of war damage. This paper aims to contribute to this discourse by exploring an over-looked perspective. It demonstrates that international investment law, and more specifically the Russia-Ukraine BIT (RUBIT), can effectively be used by Ukrainian natural and legal persons to claim damages by means of investment arbitration. The proposal’s practical value is reinforced by the availability of significant (and currently frozen) enforceable assets outside Russia.
The paper’s argument is presented as follows. Section 2 demonstrates that the RUBIT may apply to war damage ratione materiae, ratione personae and ratione temporis. Section 3 inquires if and to what extent war damage comes under the scope of the RUBIT ratione loci and demonstrates that the treaty’s territorial scope may cover a significant part of the war damage in Ukraine. Section 4 explores the matrix of damage clusters from the perspective of territorial scope. Section 5 demonstrates how the RUBIT can be used to address mass damage claims and addresses the procedural, institutional and technical aspects of the proposal. Section 6 demonstrates the practicality of applying the RUBIT for the purpose of compensation: it shows that the ensuing investment awards may be effectively enforced against a part of the frozen Russian assets. Section 7 contains the paper’s closing thoughts.