Ukraine’s lawsuits to seize Russian assets and make Russia pay for its war create a precedent for Western law, where state property of the aggressor nation is no longer immune from enforcement, Oschadbank’s supervisory board member Roza Tapanova said during a meeting with reporters in Kyiv.
Ukraine’s state-owned Oschadbank seized Russian assets in France worth approximately €87 million ($99 million) as a part of an award of damages in Ukraine’s favor following Russia’s expropriation of the bank’s assets in annexed Crimea.
Oschadbank initiated the case against Russia’s seizure of its assets in Crimea in 2015, a year after Russia illegally annexed the peninsula. The bank is now working to reclaim ownership of these assets, Tapanova explained, while Oschadbank aims to receive compensation from the aggressor for expropriating the Crimea branch, she added.
“Russia understands that after France published its decision to [seize] the assets and Oschadbank obtains them, it will become a precedent for other countries,” Tapanova said.
Besides France, Oschadbank has initiated lawsuits to seize Russian assets to pay for the war in the US, UK, Czech Republic and Finland.
“Other countries are watching the case to finalize their position,” she added.
Tapanova: Western courts no longer see Russian property as immune
Russia’s illegal full-scale invasion of Ukraine is shifting Western attitudes toward confiscating state property of the aggressor, as courts previously held that such property should be immune from legal enforcement.
After countries around the world imposed sanctions against Russia in response to its full-scale invasion of Ukraine, lawyers began to understand that even corporate property can be linked to Russia as the state and used to pay for its crimes, Tapanova said.
Oschadbank’s supervisory board member added that the Russian side initially ignored court proceedings, then used “any arguments” to challenge the case through cassation and appeal in local courts.
The reason, Tapanova explained, is that Russia realizes other countries may soon greenlight the seizure of its corporate assets for compensation in response to the war.
And when the damages are fully calculated for Ukraine’s large companies, Ukrainian law firms will be overloaded with work to sue Russia for damages and fight to pursue asset seizure through legal proceedings.
“Mostly, Ukrainian businesses don’t have enough resources to cover their operational costs for the lawsuits – they might act in consortiums that could protect Ukraine’s interests and enforce payments,” she said.
Oschadbank also launched a lawsuit against Russia for damages of the bank’s property in Donetsk, Luhansk, Zaporizhzhia and Kherson regions, seized after February 2022.
The total cost of reconstruction and recovery over the next decade following Russia’s full-scale invasion of Ukraine is expected to cost the Ukrainian economy $524 billion. This is approximately 2.8 times Ukraine’s estimated nominal GDP for 2024, according to an updated joint Rapid Damage and Needs Assessment (RDNA4) for Ukraine.
Ukrainian firms prepare more claims as war damages mount
Cases against Russia have also been initiated by Ukraine’s state-owned Naftogaz Group, Ukrhydroenergo and private Amic Energy, as well as subsidiaries of the private SCM Group Ukrtelecom and Metinvest.
The Ukrainian Deposit Guarantee Fund (DGF) is looking to seize Hr.2 billion ($48 million) that belonged to Russian bank subsidiaries, which it nationalized following the 2022 full-scale invasio, blocked in foreign jurisdictions.
Ukraine’s state-owned gas company, Naftogaz Group, recently won $1.37 billion in arbitration against the Russian gas giant Gazprom.