Online Consultation on Joint and Several Liability of Russian Companies for the Armed Aggression of the Russian Federation Was Held

On 31 October, the Ministry of Justice of Ukraine organised an online consultation as part of monitoring the implementation of the adopted regulatory acts and the analysis of their effectiveness. The consultation was dedicated to the joint and several liability of Russian companies for the armed aggression of the Russian Federation and protecting the rights of the owners whose property is located in the temporarily occupied territory of Ukraine. The discussion was attended by representatives of the Ministry of Justice, judges, academia, lawyers and EU Project Pravo-Justice national experts.

In his welcoming remarks, Oleksandr Oliinyk, Director of the Directorate of Justice and Criminal Justice of the Ministry of Justice of Ukraine, spoke about the steps already taken by the Ministry to identify problems in the area being discussed. He said that within annual monitoring, a stakeholder survey has been conducted. The Ministry of Justice also approached the Supreme Court to find out whether there are any opinions on applying subsidiary responsibility to Russian companies for the military aggression of the Russian Federation and the current jurisprudence. The Supreme Court has not yet summarised respective jurisprudence.

“Our online discussion aims to hear our stakeholders’ vision on how to solve the issues being discussed and to assess the risks of implementing each of them into national legislation,” said Oleksandr Oliinyk.

In her welcoming remarks, Iryna Zharonkina, Property Rights and Enforcement Component Lead of EU Project Pravo-Justice said that ensuring effective enforcement of court decisions during martial law is an extremely complicated issue entailing many challenges. “In European countries, the issue of recovering property if the debtors and/or creditors are subject to sanctions or are associated with the aggressor state is extremely acute. Therefore, we will be closely examining the ideas voiced by the speakers during the online discussion,” said Irina Zharonkina.

In his intervention, Anton Yanchuk, a lawyer, suggested that the Civil Code of Ukraine should be supplemented with a special provision. It would stipulate that the damage caused by the armed aggression of the aggressor state against Ukraine and in Ukraine shall be compensated by the aggressor state jointly and severally with legal entities where such state or a state-owned entity of such state holds a share of more than 25% or which are under effective control of the aggressor state.

Artem Ripenko, a lawyer, noted that even without amending civil legislation, it is possible to bring Russian companies to joint and several liability. Alternatively, he suggested filing a civil lawsuit against the Russian Federation and its companies in the course of investigating the activities of persons who committed certain crimes against Ukraine or on its territory.

“Also, at the national level, it is necessary to establish a clear reparations programme and adopt detailed legislation to clarify the purposes for which the property of the Russian Federation or its legal entities and individuals can be used; which part of this property can be used to remedy the consequences of the armed aggression and rebuild the country, and which part can be used for reparations to specific victims and survivors and in what manner,” said Artem Ripenko.

Roman Maidanyk, professor of the Department of Civil Law at the Taras Shevchenko National University of Kyiv, stressed that for now there is no convincing answer to the question of what is the legal ground for recovering the sovereign assets of the aggressor state and private assets of persons who contribute to armed aggression. Without resolving this issue, discussions and proposals to amend national and international legislation on the peculiarities of compensating for such damage are likely to remain unsuccessful in terms of their effective implementation.

“The idea of introducing the doctrine of retroactive effect or the model of the tort of armed aggression is worthy of attention. It is based on the fact that despite the sanctions imposed on the aggressor, a person (state) that suffered from armed aggression has the right to recover the aggressor’s property and assets of persons who contribute to this aggression to get compensation for the damage caused,” suggested Roman Maidanyk.

Ihor Alieksieiev, a lawyer, dedicated his intervention to the problem that there are no effective remedies to protect the rights of owners whose property is located in the temporarily occupied territory of Ukraine.

“To create an effective mechanism to protect such persons, it is advisable to supplement Article 29 of the Civil Code of Ukraine with a new part of the following wording: the value of the property that was actually lost as of the beginning of the temporary occupation of the country’s territory may also be considered as damages. The property acquired under the laws of Ukraine and located in the temporarily occupied territories, and the exercise of property rights in respect of which is impossible as a result of such occupation will be considered the property actually lost,” said Ihor Alieksieiev. He clarified that this wording to a certain extent implements ECtHR jurisprudence and the case law of investment arbitration in national legislation.

Vladyslav Skyrda, a lawyer, spoke about the international experience of legal exemptions to the application of the sovereign immunity of states in the course of judicial protection of individuals and their substantive rights.

“Following the experience of foreign countries, Ukraine should enshrine a mechanism for circumventing the sovereign immunity of the aggressor state either in a dedicated law or by amending the current laws,” said Vladyslav Skyrda.

Svitlana Yakovlieva, justice of the Cassation Criminal Court with the Supreme Court, spoke about the peculiarities and challenges of establishing jurisprudence in cases on compensating for damage caused by the armed aggression of the Russian Federation. She noted that most of the issues arising from the joint and several liability of Russian companies for the armed aggression of the Russian Federation and the protection of the rights of owners whose property is located in the temporarily occupied territory of Ukraine should be governed by legislation, not by jurisprudence.