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| Thomas Grant |
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| Scott Kieff |
One answer is to consider the usual tools available to lawyers and laypersons alike, from volunteering to serve in one's country's international diplomatic, trade and security services, to giving to the many charitable organizations providing vital help to victims.
A second answer is to bear in mind the basic tools and principles that distinguish law as a profession. Foremost among these are the rule of law and the broad consensus set of rules governing the procedures that lawyers use for handling market-oriented legal actions, and that businesses use to carry out actions in the market.
In the language of law school, these include the rules of civil procedure and administrative law; in the language of business school, they include the rules of fair dealing in the market, including property rights, contracts, avoidance of materially false statements when duties of commercial candor arise, and avoidance of market manipulation through collusion on price or output.
We offer here some ways for lawyers to combine these legal and business tools to help our global systems of trade and security in these troubled times.
Traditional Sovereign Remedies
Countries, international organizations and some individuals are already using one set of traditional options — the treaty-based international procedures that bring international criminal charges, address sovereign-to-sovereign causes of action and adjudicate human rights claims.
Criminal charges, whether under the existing procedures of the International Criminal Court's Rome Statute or under a new multilateral organ being discussed among some governments,[4] present practical challenges, in light of the fact that the likely indictments will be against officers and officials of Russia, a country with over a thousand nuclear warheads at the ready and showing no signs of conceding the wrongfulness of its conduct.
The international court for sovereign-to-sovereign claims, the International Court of Justice, has seldom adopted significant financial damages awards. The largest financial damages that court has ever awarded was in favor of the Democratic Republic of the Congo, for injuries that country sustained when Uganda occupied and pillaged its eastern provinces. Proceedings ran from 1999 to 2022, and the total compensatory sum was $325 million, plus post-judgment interest.[5]
To take the main regional human rights court, the European Court of Human Rights, that court went decades before adopting its first so-called just satisfaction judgment — an award of $123 million to the relatives of 1,456 Greek Cypriots missing since Turkey's invasion in 1974.[6]
This all means that proceedings before such international bodies as the ICJ and the ECHR often take decades to play out, usually require a country to serve as the plaintiff, and yield very speculative and very low returns compared to the effort expended by parties and counsel.
Also worth considering are possible new procedures, tailored by international organizations or sovereigns to address the injuries Russia's aggression is causing. After former president Saddam Hussein's Iraq invaded and forcibly annexed Kuwait in 1990-91, the United Nations Security Council authorized the use of force to reverse that aggression.
An international coalition defeated Iraq and restored the sovereign government of Kuwait. The Security Council then established an international procedure to address the individual and sovereign claims against Iraq for the massive injuries Iraq's aggression had caused.[7]
The U.N. Compensation Commission eventually awarded claims totaling $52.4 billion, concluding its mandate this year, on Feb. 9.[8] The funds to settle Iraq's award debts were taken from that country's oil revenues.
Given the Russian veto in the Security Council, it is hard to imagine that particular approach to remedies following Russia's aggression against Ukraine. However, a range of countries now have frozen substantial Russian assets.[9]
It remains for countries to design and implement a multilateral procedure to provide remedies for Ukraine and individual victims of Russia's aggression, but the unprecedented response so far suggests the possibilities for steps in that direction.
And if recent news reports are verified that China helped Russia wage war against Ukraine in the cyber domain in the build-up to the ground war,[10] then legal responsibility for that kind of aid and assistance[11] would suggest that the efforts to freeze assets could include assets from China as well, which would dramatically grow the basket.
Familiar Tools in an Unfamiliar Setting
In contrast to the essentially sovereign remedies that we have just described, there are more mundane tools for handling market-oriented legal actions and market actions. Unlike a multilateral claims settlement procedure that countries would have to improvise and agree to, these tools are off the shelf and well tested.
In contrast to sovereign-to-sovereign claims, they offer more yield, at lower cost, faster, with more direct benefit to the complaining client and the client's lawyers. To some extent, these more mundane private-level actions can more easily follow after sovereign-level proceedings have succeeded.
For a precedent, we recall the New York law tort actions claimants brought against BNP Paribas SA, after that bank financed atrocities in the Sudan and after the U.S. brought criminal actions against the bank.[12]
Numerous national regulatory and dispute settlement institutions provide avenues that private parties might pursue as well. For example, as we have addressed elsewhere,[13] the U.S. International Trade Commission protects parties and our domestic market from a broad range of harms in its Section 337 docket.
This docket is most widely known for its intellectual property cases, involving patents, trademarks and copyrights. But those more familiar with the ITC also know well the Section 337 cases involving trade secrets, false advertising and a broader range of commercial torts including antitrust violations.
As the sanctions and regulatory environments in each country outside Russia become more complex in regulating their own domestic enterprises, there is increasing risk that one company's competitors may be violating domestic market regulations in a way what would support a range of Section 337 actions at the ITC.
There are also remedies against a foreign country that engages in dumping and/or unfair subsidies. The International Trade Administration in the U.S. Department of Commerce receives petitions from parties with evidence that a foreign country has in fact engaged in such misconduct.
If the ITA determines that the country has done so, then the ITC in the Title VII part of its docket considers whether the misconduct in fact has harmed a domestic U.S. industry. If the ITC's determination is also affirmative, then the Commerce Department issues an anti-dumping duty or a countervailing duty.
Both Section 337 and Title VII procedures are apposite today, as Russia has purported to abrogate all intellectual property rights of non-Russian parties and extends state control over more and more of the Russian economy.
There are also well-tested international actions that individuals and investors might consider bringing in their own name — i.e., not as follow-on claimants from sovereign action but as parties with independent standing.[14]
Arbitral procedures, such as those for which investment treaties provide, offer an option to individuals and investors. Under ordinary circumstances, those procedures operate in predictable ways and are familiar to seasoned practitioners in many law firms.
However, under present circumstances, bringing an investment claim against Russia or Russian state entities is likely to entail new complexities. The impact of sanctions on investment treaty and other arbitration proceedings are as yet uncertain.
The sanctions that countries have adopted against Russia already prohibit a range of dealings with certain Russian individuals and entities, and further sanctions are likely to come.
Some sanctions regimes contain exemptions that permit lawyers to supply counsel and representation to clients whom the sanctions target, but such exemptions are highly variegated across different national jurisdictions and particular sanctions regimes.
How those jurisdictions and regimes might constrain lawyers and parties from instituting and prosecuting claims against Russia remains to be fully understood.
A significant sanctions compliance component therefore is likely to accompany any prudent arbitration strategy arising out of Russia's aggression.[15] Throughout all of this, counsel might be called on to assist with the usual whistleblower actions available across a broad range of regulatory agencies.[16]
Compliance Imperatives: Staying Ahead of the International Response to Aggression
Also relevant for legal counsel and the businesses they serve, the new sanctions and trade restrictions that countries have adopted in response to Russia's aggression require every firm and business to take careful steps to achieve and maintain effective compliance operations to support their ordinary day-to-day operations.
In a general way, professionals and executives are familiar already with sanctions and other compliance regimes. However, not been since the world wars have the U.S. and like-minded countries adopted such far-reaching measures as swiftly as they have done against Russia.
Moreover, every such regime imposes its unique requirements. Internal operations — whether of professional firms, financial houses or business enterprises — must adapt to achieve thorough, formal compliance with the particular rules that sovereigns now are promulgating to counter Russia's aggression.
And a prudent strategy requires more than that. In the first days after Russia launched its invasion, thoughtful businesses took proactive steps, not just to comply with the letter of existing sanctions but also to comply with their spirit and to stay ahead of the onrush of new compliance rules.
Legal counsel, compliance professionals and executives have been mindful that, to paraphrase the old judicial maxim, it is not necessarily enough that compliance be done; compliance also must be seen to be done.[17] Credible professionals with track records dealing with the security challenges that motivate the new sanctions regimes thus have an important role to play.
In this light, a further tool, long familiar in the corporate setting, is getting a close look by companies and their advisers: Companies are considering how to constitute special advisory committees to supplement the executive suite and board of directors, as they enhance their compliance operations and stay ahead of the fast-growing international response to aggression.
An enhanced approach to compliance certainly can contribute to a business's public-facing message, helping to demonstrate that the business has genuinely committed to compliance. However, more than optics or appearances are at stake here.
The strongly detail-focused imperatives of compliance, and the mission-critical needs of business leaders, too are often separated by a gap in organizational function. To fill that gap, businesses can turn to seasoned professionals with the expertise and experience in both the security and compliance demands of the new sanctions environment.
Engaged the right way, such professionals help ensure that neither the business's public obligations under law nor its enterprise mission of maximizing value are given short shrift. The gap all too often seen between those obligations and that mission calls for a well-designed response to the troubled environment in which businesses now find themselves.
Conclusions
Russia's aggression against Ukraine is an act of violence against individual human beings but also against the rule of law on the international stage. Nations that value human dignity and the rule of law have responded with measures against Russia unprecedented in their speed and strength.
At the same time, in addition to the responses that sovereigns pursue, important avenues exist, and others are opening, for private individuals and the enterprises they lead to contribute to the defense of international security and to affirm their own status as responsible market participants in this period of extraordinary challenge.
The procedural landscape includes many familiar mechanisms that parties can use to help. Less familiar mechanisms are also available, and new ones are taking shape that parties might turn to in the near to medium term. Across them all, there is plenty of room for lawyers to help.
Thomas D. Grant is a fellow of the Lauterpacht Centre for International Law at Cambridge University and previously served as senior adviser for strategic planning in the U.S. Department of State's Bureau of International Security and Nonproliferation.
F. Scott Kieff is a professor at George Washington University and previously served as an ITC commissioner.
Disclosures: Grant served as a consultant to the plaintiffs during the reparations phase of Democratic Republic of Congo v. Uganda. While a principal at McKool Smith Hennigan PC, Kieff represented the plaintiffs in Kashef v. BNP Paribas.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the organization, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] As to the atrocities, see, e.g., the United Kingdom ambassador's statement of March 7, 2022, to the OSCE: https://www.gov.uk/government/speeches/special-osce-meeting-on-russias-ongoing-aggression-against-ukraine-uk-statement-7-march-2022. The International Criminal Court on March 2, opened investigations in regard to the situation, after having received criminal referrals from not fewer than 41 States Parties to the Rome Statute. The U.N. General Assembly on April 7, by a 94-to-24 vote, took the extraordinary step of suspending Russia from the Human Rights Council: G.A. res. A/ES-11/PV.10.
[2] To refer to Russia's invasion of Ukraine as a "war of aggression" is to follow the formal determination reached, 141 votes to 5, by the U.N. General Assembly in G.A. res. ES-11/1 of March 2. See id. ¶2. The General Assembly adopted this resolution in a rare emergency special session. The Security Council had convened the emergency special session under the "Uniting for Peace" procedure promulgated during the Korean War in G.A. res. 377A, Nov. 3, 1950. By S.C. res. 2623 (2022), Feb. 27, the Council determined by procedural vote — i.e., majority vote against which no Permanent Member veto applies — that the Russian Federation, by having exercised the veto against a substantive draft, had "prevented [the Council] from exercising its primary responsibility for the maintenance of international peace and security." S.C. Res. 2623 (2022), Feb. 27, 2022 (11 to 1, with 3 abstentions).
[3] Counting internally displaced persons, close to a quarter the population of Ukraine has fled their homes since Russia launched its invasion on Feb. 24. See https://www.unhcr.org/uk/news/briefing/2022/3/623da5894/month-since-start-war-quarter-ukraines-population-displaced.html.
[4] https://www.theguardian.com/world/2022/mar/04/ukraine-backs-plan-for-international-tribunal-to-try-putin-for-of-aggression.
[5] Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda), Judgment, Feb. 9, 2022, pp. 107-108, para. 409, available at https://icj-cij.org/public/files/case-related/116/116-20220209-JUD-01-00-EN.pdf.
[6] About which see Thomas D. Grant, Crimea after Cyprus v. Turkey: Just Satisfaction for Unlawful Annexation? EJIL Talk! (May 19, 2014), available at https://www.ejiltalk.org/crimea-after-cyprus-v-turkey-just-satisfaction-for-unlawful-annexation/.
[7] S.C. res. 687 (1991), Apr. 3, 1991, paras. 16-18.
[8] https://news.un.org/en/story/2022/02/1111632.
[9] By some tallies, the U.K. and U.S. governments alone already have frozen in excess of $600 billion U.S. in Russian assets. See https://www.telegraph.co.uk/politics/2022/03/05/britain-freezes-russian-bank-assets-country-world/. Others place the total lower than that but still in the hundreds of billions. See, e.g., https://www.ft.com/content/50aae1a2-088a-47f9-b936-30fa02cf03de.
[10] Maxim Tucker, "China accused of hacking Ukraine days before Russian invasion. Ukrainian intelligence suggests Beijing is complicit in Putin's war," The Times (London), April 1, 2022. available at https://www.thetimes.co.uk/article/china-cyberattack-ukraine-z9gfkbmgf.
[11] As to aid and assistance under the international law of State responsibility, see Dapo Akande, Chatham House Paper on Aiding and Assisting By States, EJIL Talk! (Nov. 28, 2016), available at https://www.ejiltalk.org/chatham-house-paper-on-aiding-and-assisting-by-states/.
[12] Kashef v. BNP Paribas S.A., 925 F.3d 53 (2d Cir. 2019), as to which see 133 Harv. L. Rev. 1103 (Jan. 10, 2020), available at https://harvardlawreview.org/2020/01/kashef-v-bnp-paribas-s-a/. While a Principal at the McKool Smith firm, Scott Kieff and others at the firm represented the plaintiffs in that case.
[13] Scott Kieff & Thomas Grant, The ITC's Crucial Role in Countering Russia's Aggression, Law360 (March 18, 2022), available at https://www.law360.com/articles/1475129/the-itc-s-crucial-role-in-countering-russia-s-aggression.
[14] These are arbitral procedures under which "the investor is given direct standing to pursue the state": Republic of Ecuador v. Occidental Petroleum & Production Co. [2005] EWCA Civ 1116, 9 Sept. 2005, para. 16 (Mance LJ), citing Zachary Douglas, 'The Hybrid Foundations of Investment Treaty Arbitration,' (2003) BYIL 151, 169.
[15] There is also the prospect of Russia's treaty partners resigning from the bilateral investment treaties that are the backbone of jurisdiction for international investment claims. See Oleksii Maslov & Nelli Kichigina, Cutting off Russia from ISDS: Another Tool to Consider? Kluwer Arbitration Blog (March 26, 2022), available at http://arbitrationblog.kluwerarbitration.com/2022/03/26/cutting-off-russia-from-isds-another-tool-to-consider/.
[16] For one example of a new whistleblower program, launched by the European Commission on March 4, see https://www.eureporter.co/world/russia/2022/03/04/european-commission-launches-a-whistleblower-tool-to-facilitate-reporting-of-russian-sanctions-violations/. Regarding an existing program — that under the U.S.' Financial Crime Enforcement Network FinCEN — see Poppy Alexander, "Expand this whistleblower program so Putin's cronies can't evade sanctions," Fortune (March 4, 2022), available at https://fortune.com/2022/03/04/expand-whistleblower-program-putin-cronies-oligarchs-sanctions-evasion-russia-ukraine-invasion-financial-crime-corruption-poppy-alexander/.
[17] For the classic statement of the idea, see R v. Sussex Justices, ex parte McCarthy [1924] 1 KB 256, [1923] All ER Rep 233.
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