The Courthouse Proxy Wars, Pt. III

Textbook lessons in lawfare from Crimea's aftermath.

In the first and second dispatches of this series on the expansion of Russian-Ukrainian conflict through international litigation, The Westphalian examined the roles which could be played by the International Court of Justice, as well as other fora available to these parties for direct legal confrontation pursuant to multilateral treaties. This final instalment examines inter-State conflict resolution models available pursuant to bilateral instruments concluded between these two States, as well as fora available for claims by or against persons associated with major aspects of the conflict.

Tertiary Fronts: London, Stockholm, and Luxembourg

While some bilateral treaties include ICJ dispute settlement clauses, the only such treaty presently binding Russia is the 1971 Treaty of Commerce that the USSR concluded with the Benelux States. More relevant in the present instance are ad hoc dispute settlement procedures established through a series of agreements concluded between (or primarily between) Russia and Ukraine, beginning with the 1994 Budapest Memorandum on Security Assurances in connection with Ukraine's accession to the Treaty on the Non-Proliferation of Nuclear Weapons.

Regional Security

The Royal Courts of Justice, London. CREDIT: IMAGE By sjiong (http://www.flickr.com/photos/sjiong/109817932/) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons.

The Royal Courts of Justice, London. CREDIT: IMAGE By sjiong (http://www.flickr.com/photos/sjiong/109817932/) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons.

The US and the UK (to whom the Budapest Memorandum refers as guarantors of Ukraine's sovereignty and security) have accused Russia of breaching the agreement; Russia has in turn denied the agreement's applicability to Crimean annexation and accused the US of breaching it through instigation of Euromaidan protests. The agreement remains in force, though its trilateral consultation obligation under Article 6 is only marginally stronger than the ambiguous dispute settlement requirements in Article V of the 1975 Helsinki Final Act establishing the OSCE, which the Budapest Memorandum expressly affirms. Similar consultation obligations may arise pursuant to Article 37 of the Treaty of Friendship, Cooperation and Partnership between Ukraine and the Russian Federation, concluded in May 1997.

However, another agreement concluded between the parties only days priorthe 1997 Partition Treaty on the Status and Conditions of the Black Sea Fleet—may provide a more interesting option. The Black Sea Fleet Treaty gives Russia the authority to locate troops on its bases in the Crimea (and to move them between those bases and Russian territory) under the governance of Ukrainian law and in recognition of Ukrainian sovereigntyArticle 24 of this treaty provides for the establishment of a Joint Commission to resolve disputes in accordance with its adopted rules. Though the constitution of this body may easily hit a political impasse (and while Russia denounced immediately following its March 2014 annexation of Crimea both the Black Sea Fleet Treaty and the 2010 Kharkiv Pact extending it), the good-faith pursuit of dispute settlement for prior breaches of the Treaty may help to demonstrate Ukraine's fulfilment of negotiation preconditions to adjudication options discussed earlier in this series.

Moreover, breach of the Black Sea Fleet Treaty may bear upon the characterisation of Russia's conduct under the 1974 UN General Assembly Resolution 3314 (XXIX) on the Definition of Aggression.[1] In this broader context, Ukraine has additionally accused Russia of breaching Article 2 of the 1999 Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the Use of Airspace of Ukraine and of Airspace Over the Black Sea, Where Ukraine is Responsible for Security of Flights and Organization of Servicing of Air Traffic, by the Forces and Resources of the Black Sea Fleet of the Russian Federation through nonconsensual use of Ukrainian airfields and related border crossings.

Economic Measures

A Late 19th Century Postcard image of Kungsträdgården, Stockholm, currently administered by the Stockholm Chamber of Commerce. Credit: U.S. Library Of Congress Reproduction LC-DIG-PPMSC-06230.

A Late 19th Century Postcard image of Kungsträdgården, Stockholm, currently administered by the Stockholm Chamber of Commerce. Credit: U.S. Library Of Congress Reproduction LC-DIG-PPMSC-06230.

While Ukraine has yet to initiate dispute settlement proceedings under these security-related instruments, Russia has sued Ukraine in an economic dispute before the domestic courts of the UK. The case arose after Kiev defaulted on (and Moscow refused to renegotiate) $3 billion in bonds, which Russian President Putin purchased in December 2013 from former Ukrainian President Viktor Yanukovych, months before he fled from office. The bonds, which were structured under English law, permitted Russia to initiate confidential arbitration proceedings administered by the London Court of International Arbitration. Russia's decision to instead file suit in the High Court in London (where proceedings will be public) may demonstrate its confidence in the legal merits of its case.

Major arbitrations initiated by State companies have also played a proxy role in the Russian-Ukrainian conflict. Ukrainian State-run companies AT Oschadbank and NAK Naftogaz Ukrainy  have filed claims against Russia for an estimated $600 million in lost Crimean assets and against Russia's State-run Gazprom for $26 billion in gas charges, respectively. Gazprom, in turn, has filed an approximately $32 billion claim against Naftogaz for unpaid supplies. All of these claims are being administered by the Arbitration Institute of the Stockholm Chamber of Commerce, which has historically featured prominently in Russia's energy contracts.[2]

Several cases stemming from EU sanctions against Russia have been filed before the Court of Justice of the European Union in Luxembourg. These include challenges to sanctions levelled at individuals' assets and travel, such as the cases brought by Russian businessman Arkady Rotenberg. Among those cases initiated by corporations, one of the more interesting developments has been the case brought by Russian State-run company Rosneft, which had sought judicial review of the EU sanctions before UK domestic courts. The UK High Court referred the matter to Luxembourg in order to ensure "consistency and uniformity" in the application of the sanctions regime, especially in light of ambiguities in the terms "financing or financial assistance" as used in the sanctions.

The Court of Justice of the European Union, Luxembourg City. Credit: Image by Gwenaël Piaser, https://www.flickr.com/photos/piaser/4399442576.

The Court of Justice of the European Union, Luxembourg City. Credit: Image by Gwenaël Piaser, https://www.flickr.com/photos/piaser/4399442576.

Five publicly known investor-State arbitrations initiated against Russia are presently being administered by the Permanent Court of Arbitration in The Hague. Jurisdiction in these proceedings is founded upon the 1998 Agreement between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments, which provides for procedures in accordance with the 1976 UNCITRAL Arbitration Rules. These cases allege a variety of breaches of investment protection concerning the seizure of, inter alia, airports, petrol stations, real estate, and financial assets based in Crimea. Russia has refused to participate in these proceedings, beyond notifying the PCA by letter that the 1998 Agreement "cannot serve as a basis for composing an arbitral tribunal to settle [the Claimants' claims]". The tribunals in these cases have decided to bifurcate proceedings in order to address these jurisdictional concerns as a preliminary matter.

Familiar Destinations

Returning to The Hague, the question remains as to whether the International Criminal Court could intervene in the conflict. In September 2015, Ukraine filed a Declaration to the Rome Statute, recognising the ICC's jurisdiction regarding acts committed within its territory since February 2014. This follows from reports of war crimes against prisoners of war in Eastern Ukraine. ICC prosecution may also be relevant to the downing of Malaysia Airlines Flight MH-17 over Eastern Ukraine in July 2014; however, evidentiary difficulties may arise due to the requirement of intention to kill civilians, rather than military personnel (a distinction which would be irrelevant in murder prosecutions before domestic courts).[3] This incident may also provide grounds for third States—including the Netherlands, which lost a great many citizens on Flight MH-17—to bring suit against either Russia or Ukraine before the International Court of Justice under, for example, the 1973 Montreal Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation.

The tragedy of the MH-17 may also further expand the conflict's Strasbourg front, where the families of the victims may initiate individual cases against either Russia or Ukraine before the European Court of Human Rights. Alleged breaches of relevant international law in this respect may include Ukraine's failure to secure the right to life of the victims and failure to comply with substantive positive obligations under Article 2 of the European Convention on Human Rights (e.g., by not closing airspace to civilian traffic), Russia's provision of anti-aircraft weaponry without sufficient safeguards against civilian targets, and both States' failure to effectively investigate the incident.[4] Such actions would add to the over 700 individual claims already lodged before the ECHR in relation to displacement in Crimea, Luhansk, and Donetsk, as well as the inter-State ECHR cases discussed earlier in this series.

A Multipolar Conflict

'Episode of the Siege of Sebastopol during the Crimean War in 1855', by Adolphe Yvon. Credit: Public domain, via Wikimedia Commons.

'Episode of the Siege of Sebastopol during the Crimean War in 1855', by Adolphe Yvon. Credit: Public domain, via Wikimedia Commons.

From a judicial perspective, the conflict between Russia and Ukraine has spilled into courtrooms and arbitration centres across Europe, demonstrating the potential to involve not only these States but also third-party States, Russian and Ukrainian State-owned companies, private corporations, and individuals. These venues and causes of action have moreover raised the spectres of international dispute settlement sagas both long-past and recent: the relevance to the MH-17 incident of the Lockerbie cases before the ICJ and the Scottish Court in the Netherlands; the procedure for addressing Russia's non-appearance before international tribunals in pending PCA arbitrations in light of the treatment of Russia's similar approach to the Arctic Sunrise arbitration; and the general diffusion of these disputes across Europe in a manner which recalls the ongoing proceedings in Brussels, Stockholm, and The Hague in relation to the Yukos dispute, as well as prior cases before the PCA, ECHR, and UK courts related to the Chagos Archipelago dispute. Such cases demonstrate not only multipolarity, but also the proliferation of non-State interests in disputes which begin as fundamentally inter-State conflicts. In this light, the legacy of the Russian-Ukrainian conflict reaches beyond its regional origins through the multiplication and individualisation of international justice.[5]


[1] On the conformity of Crimean annexation with Article 2(4) of the UN Charter, see D. Wisehart, 'The Crisis in Ukraine and the Prohibition of the Use of Force: A Legal Basis for Russia's Intervention?', EJIL: Talk! (4 March 2014), www.ejiltalk.org/the-crisis-in-ukraine-and-the-prohibition-of-the-use-of-force-a-legal-basis-for-russias-intervention/.

[2] See further P. Clateman, 'The Russia-Ukraine Bond Dispute: Another Frozen Conflict?', Transnational Dispute Management (2016, forthcoming), www.transnational-dispute-management.com/journal-advance-publication-article.asp?key=1606.

[3] On the "accountability gap" in this incident, see S.-D. Bachmann, 'The Downing of Malaysian Airlines Flight MH17', OUP Blog (22 July 2014), http://blog.oup.com/2014/07/malaysian-airlines-flight-mh17-russia-ukraine-international-law-pil/.

[4] On the link between legal responsibility and theories of control, see J.D. Ohlin, 'Control Matters: Ukraine & Russia and the Downing of Flight 17', Opinio Juris (23 July 2014), http://opiniojuris.org/2014/07/23/control-matters-ukraine-russia-downing-flight-17/.

[5] See further T. Meron, The Humanization of International Law (Martinus Nijhoff, 2006), www.corteidh.or.cr/tablas/r32567.pdf.