THE IMPACT OF RUSSIA’S INVASION OF UKRAINE ON COMMERCIAL DISPUTES
Russia’s unlawful invasion of Ukraine in February 2022 has already generated a variety of international legal disputes. Ukraine has instituted proceedings against Russia before the International Court of Justice (ICJ) and the European Court of Human Rights (ECHR). Although Russia was expelled from the Council of Europe as of September 2022, thousands of individual human rights claims filed against Russia prior to that date remain pending before the ECHR.
These high-profile international law disputes are but the tip of an iceberg. As described below, an even broader set of commercial disputes and investment disputes has arisen or will eventually arise.
Commercial disputes
Contractual disputes are likely to arise as a consequence of sanctions or countersanctions, and foreign companies’ decisions to exit the Russian market – or a combination of both.
Sanctions. In response to the Russian invasion, sanctions of unprecedented severity have been imposed on Russia. Within days, countries around the world, ranging from the US, the UK, European Union (EU) member states, Switzerland, Canada, Japan, Korea and Singapore, imposed additional or wholly new sanctions. The sanctions were extended to Belarus as well as Russia, and their instrumentalities with a view to cut off the flow of funds, supplies and technologies into Russia. The Russian oil and gas industry has been specifically targeted with bans on imports of Russian oil and gas, price caps and bans on exports to Russia of key technology and equipment.
Ukraine itself introduced the strongest sanctions on Russia and Russian companies. On 3 March 2022, the Verkhovna Rada (parliament) of Ukraine adopted a law that permits Ukrainian authorities to expropriate property owned by the Russian Federation and its residents for reasons of public necessity without any compensation.
Jan-Mar 2023 issue
Aequo
Three Crowns LLP