Ukraine Is Weaponizing Corporations Against Russia—Using Lawfare

Things look bleak for Ukraine as a Russian invasion looms. In one domain, however, Ukraine says that it is “fighting quite well.” Ukraine has developed a “Lawfare Project” against Russia, designed to use law to achieve military objectives and delegitimize adversary actions. Ukraine has gone so far as to publicize its comprehensive “legal confrontation” tactics on a dedicated website. Ukraine’s lawfare presents a fascinating window into a war that is occurring in the legal, psychological, and information realms as much as it does on the battlefield. Its novel weaponization of the private sector is inflicting pain on Russia—and creates a precedent that may shape the future of war.

Ukraine’s lawfare strategy turns one of Putin’s favored tactics against him. Russia has long employed lawfare to substantiate its aggression toward neighboring states and territories. Russia has historically adopted laws to justify “humanitarian operations” as part of its “responsibility to protect” Russian-friendly populations—whether or not they are ethnically Russian, Russian Orthodox, or Russian-speakers. It did so in Moldova in 1992, Georgia in 2008 and 2014, Syria since 2011, and Ukraine in 2014. In 2018, the Duma retroactively justified Russia’s annexation of Crimea by passing a law commemorating 1783 as the date of Crimea’s “accession” to the Russian empire. To invade Crimea in 2014, Russia used “little green men,” special forces without uniforms or insignia required of combatants under international law, so it could plausibly deny responsibility for the conflict. Meanwhile, a draft law was waiting in the Duma that conferred automatic citizenship to populations of Ukraine who met certain historical, cultural, or linguistic criteria. Russia then distributed passports in Crimea to boost the numbers of Russian citizens there.

Ukraine is now using lawfare to fight back and undercut Russia’s claims of legitimacy. Ukraine has launched lawfare offensives on public and private fronts. In the public international law realm, Ukraine has filed suit in the International Court of Justice accusing Russia of a “campaign of cultural erasure” against Crimean Tatars and ethnic Ukrainians in Crimea in violation of the Convention for the Elimination of All Forms of Racial Discrimination, as well as violations of the International Convention for the Suppression of Financing of Terrorism. Its two complaints against Russia in the International Criminal Court are preceding to the investigation stage. Ukraine has filed nine additional applications in the European Court of Human Rights related to the conflict. The same court is also reviewing more than 7,000 individual applications, plus one by the Netherlands, related to the downing of Malaysia Airlines flight MH17 by a Russian Buk missile over the Donetsk region in 2014. The Netherlands’ participation lends further legitimacy to the action. Ukraine has filed additional complaints regarding the conflict and the incident with an International Tribunal for the Law of the Sea (ITLOS), the International Court of Justice, and in the Permanent Court of Arbitration. An ITLOS tribunal already ruled in Ukraine’s favor on a complaint related to the Kerch Strait incident of May 2019.

By backing investor-state arbitrations against Russia, Ukraine has weaponized both its corporations and the law. Ukraine has encouraged its investors to pursue claims against Russia under the 1998 bilateral investment treaty between Russia and Ukraine. Bilateral Investment Treaties (“BITs”) are agreements between two sovereign states to encourage foreign investment flows between them. BITs grant protections for investors from each state who invest in the territory of the other, usually including protection from arbitrary expropriation of investment and fair and equitable treatment of investments. The BITs also specify how disputes arising under them will be decided. This usually involves creating an arbitration tribunal that is designed to resolve disputes independently from the judiciaries of both states, in order to avoid bias. Effectively, BITs allow investors to file claims resulting from treaty obligations directly against a sovereign state as if it were any ordinary party in a commercial dispute.  

So far, Ukrainian investors have filed eleven investment arbitration claims against Russia, as documented by attorney Eric Chang in a forthcoming article. Ukraine filed submissions in support of the claimants in six of the arbitrations, and coordinated their legal strategies. Several claimants are state-owned entities. The investors demand compensation from Russia for illegally seizing investments located in Crimea, including banking operations, an airport, gas stations, real estate, and power stations. For the tribunals to have jurisdiction over these disputes, they needed to determine that the investments are in territory over which Russia has “effective control,” as defined by the Fourth Geneva Convention, one of the foundational treaties of the law of war. Investor-state arbitration tribunals do not have jurisdiction to determine whether the occupation of Crimea itself is illegal. However, repeated, independent findings that Russia has “effective control” over Crimea can amount to a distinction without a difference in the court of public opinion. Lawfare allows Ukraine to bolster its legitimacy before the international community—and to broadcast that Russia is an aggressor in an international armed conflict. According to Chang, the arbitration tribunals have also imposed a financial penalty on Russia of $8 billion so far, with billions in claims still to be decided. Although Russia did not participate in the first nine arbitrations, it is now actively defending itself, revealing that it fears such claims.

Ukraine’s lawfare strategy will not be enough to deter Russia from invading Ukraine. However, billions of dollars in penalties, with more sure to come, can change the cost-benefit analysis of Russia’s actions. More potently, Ukraine’s lawfare strategy helps to galvanize its own people against the Russian occupation. Without military superiority, Ukraine will need a whole-of-society approach to document and fight Russian atrocities and illegal behavior. By empowering its own citizens to make claims against Russia, Ukraine can undercut Russian aggression and bolster its diplomatic position before the world. Russia’s own lawfare strategy has shown that it cares deeply about the perceived legality of its military operations by the international community and by its own people. Ukraine’s ability to undermine Russia’s legitimacy in international tribunals—and in the court of global public opinion—can pack a painful punch. As the precedential, financial, and reputational value of Ukraine’s claims against Russia mount, Ukraine’s Lawfare Project may become a model strategy in future interstate lawfare.