Investment Protection And Arbitration | Part 2 - Personal Injury

PART 2: LAUNCH OF THE REGISTER OF DAMAGE FOR UKRAINE

Yesterday, the Register of Damage for Ukraine (the "Register") officially launched, meaning that the claims submission process for those seeking compensation for the damage inflicted by the war in Ukraine is now open.¹

The Register, established within the framework of the Council of Europe and supported, among others, by Canada, the European Union, Japan, the United States and the United Kingdom, stands as a pivotal initiative in response to the full-scale military invasion of Ukraine by the Russian Federation ("Russia"). It aims to provide a structured framework for recording compensation claims for damages, losses, and injuries inflicted by the invasion.²

In Part 2 of our new Series entitled "Russia: Investment Protection and Arbitration", we focus on the mandate, functions and operational framework of the Register and highlight key points for potential users of the Register.

REGISTER'S MANDATE AND FUNCTIONS

The Register is a digital platform tasked with receiving and processing the claims for damages and related evidence arising from the Russian invasion of Ukraine.

The Register was established in May 2023 within the framework of the Council of Europe by Resolution CM/Res(2023)3 establishing the Enlarged Partial Agreement on the Register of Damage Caused by the Aggression of the Russian Federation Against Ukraine.³

Serving as the first component in an international reparations mechanism for Ukraine, it is aimed at capturing damages, losses, and injuries, incurred in Ukraine by individuals, companies and the State of Ukraine due to the Russian invasion. The Register's role does not extend to assessing the validity (beyond eligibility) or value of claims, nor does it authorize any payments. Rather, its function is solely to document these claims for potential future action.

In addition to the Register, future compensation mechanisms for damages caused by Russia's aggression against Ukraine are expected to include a claims commission and a compensation fund (both requiring separate international instruments to be established).⁴

ORGANISATIONAL STRUCTURE

The Register is governed by the Conference of Participants, representing the European Union and forty-three member states of the Register.⁵ This body is responsible for approving rules and regulations, adopting budgets and providing oversight, as well as appointing members of the Board of the Register (the "Board").

The Board is the key authority responsible for the functioning of the Register, comprising experts in international law, war damages, and claims resolution. Based in The Hague, the Netherlands, the Board's role is to assess claim eligibility and develop operational rules and regulations.

The Executive Director of the Register oversees the daily work of the Secretariat of the Register (the "Secretariat"), coordinates and forwards claim submissions to the Board and liaises with national and international bodies to ensure that the Register operates smoothly. The Secretariat provides administrative as well as substantive and technical support in relation to the maintenance and functioning of the Register.

ELIGIBILITY CRITERIA AND CLAIM CATEGORIES

To qualify for inclusion in the Register, the claims must satisfy all of the below criteria:

incurred on or after 24 February 2022;
incurred within the territory of Ukraine (including its territorial waters); and
caused by Russia's "internationally wrongful acts in or against Ukraine".⁶

The Rules Governing the Submission, Processing and Recording of Claims provide for an additional eligibility criterion that the claim shall be submitted "by or on behalf of an eligible Claimant".⁷

The categories of potential claimants are broad and cover:

natural persons;
legal persons (including foreign companies); and
the State of Ukraine, which includes "regional and local authorities, and state-owned or controlled entities".⁸

In order to submit their claim, legal entities and the State of Ukraine must engage duly appointed representatives (such as lawyers), while individuals have the option to proceed without representation. The rules on the use of representatives are expected to be adopted separately.⁹

Anticipated categories of damages encompass personal injury, property loss, business loss, damage to infrastructure, and environmental harm, among others.¹⁰

The Board has opted for a phased approach to the implementation of the Register. The launch on 2 April 2024 focusses solely on one critical category of damage, namely damage or destruction of residential property. Subsequent phases are expected to also address the claims from individuals most severely impacted by the conflict, claims concerning the damage or destruction of Ukraine's critical infrastructure and claims from businesses (including foreign companies) which suffered business losses, as well as infrastructure and other damages as a result of the invasion.

In terms of claims that may be made by legal entities, the non-exhaustive list of categories¹¹ include not only claims for damage or destruction of property and other assets, but also business and other economic losses like the loss of control of property in temporarily occupied territories, relocation (evacuation) of businesses, and humanitarian expenditures.

OPERATIONAL FRAMEWORK AND SUBMISSION PROCESS

The primary features of the Register's operational framework unveiled thus far are as follows:

claim submission will be exclusively in digital form, utilising the Diia mobile application which is already widely used in Ukraine for a variety of State services;
claims will be filed using specific forms published by the Board;¹²
the filing of claims is free of charge;
initially, claims may only be submitted in Ukrainian, with an English language option expected to be available later;
no specific deadlines for claim submission have been announced yet (although this may be subject to change in the future); and
decisions on the eligibility and subsequent recording of claims in the Register will be made by the Board.

IMPORTANT POINTS FOR POTENTIAL CLAIMANTS

While the Register does not have adjudicatory functions with respect to submitted claims, such as determining responsibility or allocating payments or compensation, the submission of a claim (and the quality of supporting evidence) can significantly impact the likelihood and extent of recovery of any compensation. Therefore, it is advisable to approach the claim preparation and submission process with due attention and diligence, even though the submission via the mobile application Diia or its web portal might seem straightforward.

Our initial observations in relation to the Register's framework include the following:

a wide range of evidence is available for submission, including expert reports, digital data, documents and media;
although the Board does not have adjudicative functions, it retains the power to not record a claim "with prejudice" (preventing resubmission of the same claim),¹³ including when it deems a claim "manifestly unfounded";¹⁴ and
in its decision-making, the Board may take into account judgments or awards from national or international courts, tribunals and other adjudicative bodies within the Register's mandate, although it is not bound by them.¹⁵

In respect of the latter point, claimants who have previously explored other avenues such as (i) litigation in Ukraine or (ii) international investment arbitration to recover losses incurred from the Russian invasion of Ukraine may need to reconsider their strategies in light of the launch and subsequent activities of the Register.

However, as the mandate of the Register does not extend to damages suffered before 24 February 2022, individuals and companies who have already pursued avenues like international investment arbitration to seek redress for damage caused by the Russian Federation's illegal occupation of Crimea or support for separatist movements in the so-called Donetsk People's Republic and Luhansk People's Republic in eastern Ukraine since 2014 will not be directly impacted by the Register's operation (at least until the three-stage compensation mechanism, including the claims commission and compensation fund, is established).

CONCLUDING REMARKS

The commencement of operations by the Register on 2 April 2024 marks a significant initial stride towards accountability and reparations for victims of the invasion. With its primary function lying in documenting claims and underlying evidence, the Register does not serve as a comprehensive avenue for compensating damages, losses and injuries caused by the war. Nevertheless, it represents a pivotal first component of an eagerly anticipated multifaceted reparation mechanism, which is expected, in due course, to encompass the evaluation and enforcement of claims. We will provide further Legal Insights about the claims commission and compensation fund as soon as there are any significant developments in respect of their launch.

Mayer Brown continues to monitor the relevant developments and is well-placed to provide assistance in navigating the Register and the claims process. Drawing on our expertise in international dispute settlement, Mayer Brown stands ready to offer tailored guidance and support to claimants seeking compensation for damages incurred due to the Russian invasion of Ukraine. This includes, but is not limited to, utilising the existing mechanism offered by the Register, as well as anticipated future developments within the same framework.

Footnotes

1. See official press-release, dated 27 March 2024, available at: https://rd4u.coe.int/en/-/register-of-damage-for-ukraine-to-open-for-claims-submission-on-2-april-2024.

2.See official webpage of the Register available at: https://rd4u.coe.int/en/home.

3. Pursuant to Article 1.1 of its Statute, as adopted by the referred Resolution, dated 12 May 2023 and amended on 27 September 2023 (the "Statute of the Register"), the Register is defined as "The Register of Damage Caused by the Aggression of the Russian Federation against Ukraine".

4. Statute of the Register, Article 2.5.

5. The member states of the Register include Albania, Andorra, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czechia, Denmark, Estonia, European Union, Finland, France, Georgia, Germany, Greece, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Republic of Moldova, Monaco, Montenegro, Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, San Marino, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom and United States of America.

6. Statute of the Register, Articles 1.1 and 2.2.

7. The Rules Governing the Submission, Processing and Recording of Claims (the "Claims Rules"), as adopted by the Register's Board on 21 March 2024, available at https://rd4u.coe.int/en/documents.

8. Statute of the Register, Articles 1.1 and 2.3.

9. Claims Rules, Article 11.2.

10. See The full list of categories of claims eligible for recording available at https://rd4u.coe.int/en/documents.

11. See The full list of categories of claims eligible for recording available at https://rd4u.coe.int/en/documents.

12. For example, the claim form for damage or destruction of residential immovable property is available at https://rd4u.coe.int/en/documents.

13. Claims Rules, Article 21.7(b).

14. Claims Rules, Article 18.2.

15. Claims Rules, Article 21.3.

Originally Published 3 April 2024

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