Archive for January 10th, 2016


Ukraine 2016 – The year of international lawfare?

January 10, 2016

2014 was the year that the saw Ukrainian constituency tackle a regime with designs on taking away its right to choose, its dignity, and that had turned a deaf ear to its voice – not to mention a regime that had not only stolen the family silver, but also hocked it for good measure – it was also a year it was then confronted by another external regime that forced the nation to literally fight for its survival.

2015 as stated by the blog at the time, would be a war of governance between Kyiv and Moscow, and Kyiv and the Ukrainian constituency – as well as a continuing war in the nation’s east.

Whilst that battle over governance and the speed of meaningful reform between the political class and the Ukrainian constituency will continue unabated during 2016, as will the war of governance between Moscow and Kyiv, 2016 also heralds the commencement of official economic warefare as The Kremlin decrees what amounts to a trade embargo upon Ukrainian goods not only traditionally destined for the Russian market, but also that which transits through Russia to Kazakhstan and Azerbaijan too.

It has seen Kyiv acting with expected reciprocity for certain Russian goods entering the Ukrainian market, and beginning to use the trade route that will eventually become the Chinese Silk Road/Belt to circumvent Russian territory.

2016 seems also to be the year where lawfare between the two nations will finally be waged – or at the very least lawfare will finally be launched.  As with all matters of law, these things tend to drag on somewhat – so few will expect more than the opening skirmishes to be settled within the same year they are started.


Naturally there are already motions in progress to bring the Russian trade ban before the WTO now that the long expected Kremlin reaction to the implementation of the DCFTA with the EU has finally and fully come into effect.

Ukraine has also submitted a formal and official complaint to the European Commission regarding Nord Stream II, which it rightly (prima facie) states fails to meet the requirements of the Third Energy Package (but then neither did the original Nord Stream).  To be clear, there are quite a few Member States that are also very much against Nord Stream II, however it will fall to the European Commission to decide the matter.  At the time of writing, one has to suspect a negative view toward the project.

The Kremlin has also started legal proceedings against Ukraine for failing to pay the $3 billion bond it holds, with Ukraine stating that The Kremlin will be paid if, and only if, it accepts the same debt restructuring as other major credit holders.  Otherwise Ukraine is willing to meet The Kremlin in court.  Ultimately, as such matters are glacial as already stated, Ukraine will probably buy itself another year prior to any payment upon any judgment – somewhat important with a very weak economy and national bank balance – not to mention IMF commitments to meet regarding budget deficits.

On 6th January, Pavlo Petrnko, Ukrainian Justice Minister announced that Ukraine would (finally) launch a large scale action against Russia at the International Court of Justice over the illegal annexation of Crimea and the sponsoring of terrorism in the occupied Donbas.

The claim is likely to be enormous.  There are about 460 State enterprises, 18 oil fields, oil rigs, vineyards and infrastructure – much of which the “Crimean authorities” have claimed to have “nationalised” already.

This notwithstanding, both the state owned Naftogaz Ukraine and Oschadbank are launching their own, separate actions against The Kremlin at the Court of Arbitration in Stockholm.  More separate cases are likely to follow too.

There are also a growing number of individual cases being raised against Russia by over its actions in Crimea and the occupied Donbas that will head to the European Court of Human Rights (albeit Russia has recently passed a domestic law under the guise of “reasserting sovereignty” whereby it may or may not subject itself to ECfHR rulings as is its whim).  To be sure that number of individuals bringing cases heading for the ECfHR will snowball.

It now seems, apparently not wishing to be left out, that the Ukrainian oligarchy are set to follow both the Ukrainian State and thousands of individual Ukrainians in taking The Kremlin to court in 2016.

Ihor Kolomoisky, has commenced legal proceedings at the Permanent Court of Arbitration in The Hague, over Aeroport Belbek LLC, one of his innumerable companies that had the contract to run Sevastopol Airport (until 2020) before Russia illegally annexed the peninsula.  He has listed damages of $15 million.

It will surely be only a matter of time until law suits are raised for the numerous Privat Bank branches lost by Mr Kolomoisky in Crimea too.

How long before, or if, Sergei Taruta and/or Rinat Akhmetov also try to claim for the losses of their Crimean assets, one has to suspect, will probably soon become known.


Indeed, the current “Prime Minister of Crimea”, Sergey Aksyonov, is attempting to arrange an auction for many of the seized assets of both the Ukrainian State and the oligarchy at the end of January 2016 – A case of caveat emptor for any would-be buyers who would almost certainly find themselves on a sanctions lists somewhere.

Thus, it appears that despite the on-going military warfare in the occupied Donbas, the continuing governance warfare between Kyiv and Mosow, the officially declared start of economic warfare with effect from 1st January 2016, this year will also see the meaningful beginnings of international lawfare – a war that due to the necessities of due process and judicial deliberation, will last well into 2017 (and beyond).

All of course, quite necessary – for if the illegal annexation of Crimea is rightly seen as a challenge and an affront to international law,  then international law will also become a weapon of war in seeking justice.

The big question however, will be which international courts The Kremlin will actually accept as having any jurisdiction?

Will the international courts of arbitration and the International Court of Justice see the same disregard as the ECfHR is likely to see henceforth?  If it becomes necessary to seize Kremlin assets beyond Russian borders, per the Yukos ruling, which States will adhere to the judgements?

The answers will probably begin to become clear in late 2016, and during 2017, when international rulings begin to appear.

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