Immediately after key Western partners of Ukraine made public statements regarding confiscation of frozen assets of the Russian Central Bank (hereinafter – RCB), Russian authorities started preparations for the legal battle through challenging respective decisions in national courts, in international investment tribunals and international courts (regional and universal). The mere fact of Russia challenging confiscation in different courts should not be a sufficient ground to abandon this measure. Instead, Western decision-makers should focus on assessing the perspectives of success of such lawsuits via researching international law including international courts’ and tribunals’ case law. The importance of international remedies for Russia is less aimed to stop confiscation but rather to gain a symbolic victory and undermine the legitimacy of confiscation in general.
A comprehensive analysis of the procedural rules and case law of the European and international (universal) courts and tribunals conducted by the International Center for Ukrainian Victory showed that Russian court prospects are highly doubtful.
While the current approaches in case law, especially the 2021 decision in case République bolivarienne du Venezuela v Council of the European Union, and legal uncertainty of the EU founding treaties towards confiscation provide sufficient chances for Russia or the Russian Central Bank to have a legal standing in the Court of Justice of the European Union, existing practices on merits of the application of sanctions (for instance, the same case of Venezuela or the Rosneft case) shows that the EU justice protects the right of the EU to have broad discretion in foreign policy and security measures, which would certainly cover confiscation.
As for the European Convention on Human Rights and practice of the ECtHR, there are serious barriers for the RCB’s application for compensation for an alleged violation of its property rights. Russia’s participation as a state is not considered since Russia withdrew from the Convention and the Council of Europe in 2022. While earlier Russian Gazprom and Rosneft did manage to fit under the ECtHR criteria of “non-governmental organizations”, the chances of the RCB as an exclusive financial regulator with powerful authorities to be found admissible for the claim look bleak. Moreover, the chances to gain success based on an alleged violation of the ECHR (Protocol 1 to it) also does not seem high due to the ECtHR case-law.
Filing the claim to the UN International Court of Justice looks the most complicated procedurally for the Russian Federation since it would need to first file the declaration on recognition of the ICJ compulsory jurisdiction. Russia would be then able to claim only against states which have also submitted the same declarations before. While such states may alter their own declarations in a way to block Russia claiming them, and some of declarations e.g. of the UK, Germany, or Canada already contain preventing reservations, they may also use this dispute to file retaliatory claims against Russia regarding its grave violations of international law. Therefore, the number of complexities and risks for Russia prevail over opportunities.
Finally, in case of filing by the RCB of a claim to the international investment tribunal shows that the RCB will face barriers and risks on each stage of consideration: finding admissible as an investor and even in case the RCB succeeds in that, legal grounds exist for the award not to be enforced at all. Moreover, the current approach of international courts and tribunals shows that lawful confiscation conducted within the regulatory powers of the state have often been found as lawful non-compensable expropriation. Finally, investment arbitration case-law shows that tribunals approve lawful international countermeasures applied according to the international customary law which is totally the case of the possible confiscation of the RCB assets.
On the other hand, confiscation of the RCB assets would indeed be an unprecedented and unique international countermeasure, therefore, all the considerations herewith are made with a portion of carefulness. However, existing case law and approaches of the courts and tribunals analyzed combined with undoubted evidence of the gravity of the Russian aggression and severe violations of jus cogens rules of international law allow to suggest that judgements are unlikely to be in favor of the Russian Federation.
