Evidencing damage caused by modern warfare: Russia’s large-scale war against Ukraine

Dmytro Marchukov
Integrites, Kyiv
Dmytro.Marchukov@integrites.com

Kristina Shyposha
Integrites, Kyiv
Kristina.Shyposha@integrites.com 

The large-scale war waged by Russia on Ukraine has been going on for over two years and has caused enormous damage. The total amount of damage to Ukrainian citizens, businesses and the state itself is yet to be quantified. It already appears to be in the range of hundreds of billions of dollars. It is said that even the total value of all frozen Russian assets in different jurisdictions is far below the value of the damage caused by the Russian aggression against Ukraine.

The key question so far has been how compensation for such damage can be obtained. The existing adjudication mechanisms are scarce, especially in circumstances where it is very difficult for claims to be followed through from filing to recovery. Even though the Register of Damage for Ukraine has been set up to assist with recording and evidencing damage caused by the aggression of the Russian Federation against Ukraine, it is unclear whether – and, if so, when – this will become an efficient tool. What is clear though is that – regardless of the forum in which plaintiffs who have suffered damages file their claims – it will be necessary to prove the nature of the damage suffered and to quantify the losses. This article aims to explore some of the approaches which the authors and their Ukrainian colleagues have used to record such damages in order to preserve relevant evidence either for any future possible compensation by the Russian Federation, or – in a limited number of scenarios – from insurers.

One of the important principles is to take a record of the damage as soon as possible (to the extent allowed by the war) and – if the damaged property can be restored at all – it would be best to take a record of the damage before any restoration has taken place. At the same time, with respect to recording the damage caused by the war, the question of ‘how’ the damage is to be recorded is certainly more important than ‘when’. What is relevant in this regard is that the Russian Federation enjoys no sovereign immunity in Ukraine and, therefore, can be sued by the victims of the Russian aggression directly in the Ukrainian courts. Such cases have been actively pursued (mostly by individuals, rather than corporate plaintiffs) and the Ukrainian courts have already started to issue the first judgments.

Relevant Ukrainian court practice

Given the limited format available, the aim of this article is not to explain how the decision to deprive Russia of sovereign immunity was passed in Ukraine, nor to provide a comprehensive overview of the respective Ukrainian court practices but, rather, to identify some points, which other judicial, arbitral or administrative forums are likely to face in disputes relating to the damage caused by Russian aggression. Most of these points are quite obvious although their relevance and importance may occasionally be overlooked ‘in the fog of war’.

First of all, when deciding cases on compensation for the damage caused, the courts aim to establish whether the plaintiff is actually the owner of the property that has been damaged or destroyed by the war. It is easier with registrable assets or those of corporate plaintiffs, whereas for individuals it is sometimes more difficult to prove their ownership over certain goods, which are not registrable. However, given how common online purchases and all sorts of other cashless payments have become, this exercise is often not tremendously challenging (a much more difficult situation would be with paper receipts and other documents, which might have been lost, destroyed or simply left in a location to which the plaintiffs no longer have access).

Also, in cases involving movable assets, the courts will analyse whether they were, indeed, located in the area where hostilities took place and led to their destruction or damage. The relevant evidence in such cases may include photographs, videos, internal company records and warehouse documents. Ascertaining the place of immovable assets is also relevant but that is typically a much easier exercise.

An obvious next point in such matters is to identify the particular event that caused the damage, such as a missile attack, a projectile hit or machine gun punctures. Notwithstanding the difficulties faced living in a war zone, the Ukrainian courts still require the plaintiffs to prove that, for instance, a car was damaged as a result of hostilities and not in a traffic accident, or a house fire was caused by a missile attack and not by any other means, such as a short circuit. Verification of such events relies on a variety of evidence, including reports on fire incidents; reports on inspection of property by the police or by other emergency services; decisions of local authorities describing destroyed or damaged property; visual evidence, such as photographs or videos sourced from official and unofficial media; and publications on social media, Telegram channels and in the press.

Of course, quantification of the plaintiff’s damages is an unavoidable stage in a dispute. Although not always critical, courts generally prefer to rely on expert reports, rather than the plaintiff’s own calculations. In such situations, damages experts often work together with the technical experts: they are often instructed by the plaintiffs but, occasionally, also by the courts. Ukrainian authorities have even adopted a methodology for assessing the damage caused by Russian aggression. Tailored mostly for Ukrainian court and criminal proceedings, the approach used in this methodology is more conservative and rigid than the one that we tend to see in various non-Ukrainian proceedings, which is why it is not likely to be followed outside Ukraine.

Difficulties arising in the occupied Ukrainian territories

A separate difficulty is recording and assessing the damages suffered in the Ukrainian territories occupied by Russia. For instance, none of our clients would dare to ask the Russian occupation ‘authorities’ to identify and confirm the damage caused by them. Therefore, almost all of the time, the victims of the war in occupied territories can rely only on themselves and on private assistance (bearing in mind their own personal safety). Because of this threat to person, we have never sought disclosable witness statements directly from our clients’ employees – or, rather, their former employees – who continue to reside in occupied territory.

In one of the insurance disputes in which we have worked, in order to assess the damages caused to the property located in Russian-occupied Ukraine, the loss adjuster (as instructed by the reinsurers) devised an interesting approach. In particular, the adjuster assessed the damage to a similar property insured in the same manner, located in an area previously under Russian occupation, which had since been liberated by the Ukrainian army. The adjuster extrapolated the results of that assessment for the insured property in the occupied territory. All the parties (insured, insurer and reinsurers) agreed to this approach. Nevertheless, it is not certain whether the judges or the arbitrators would have accepted the adjuster’s proposal so readily.

Finally on the point of occupied territories, studying the conduct of the Crimea-related investment treaty arbitrations against Russia may also be useful for the purposes of evidencing damages, since many of the awards in these arbitrations are publicly available. However, we note that much of the damage that occurred in Crimea mostly took the form of forcible takeovers of property or businesses, rather than the destruction or damage caused as the result of missile attacks, projectile hits or massive manmade flooding events (as was the case with the destruction of the Kakhovka Dam across the Dnipro).

Conclusion

Although the end to the war against Ukraine is not yet in sight, there is hope that the just, fair and stable peace will prevail sooner, rather than later and the significant damage incurred by Ukraine and its people will be properly compensated. Commercial disputes relating to this damage will, we expect, continue for many years, given that – as the past and current experience demonstrates – it is a protracted and complex process.