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  5. Investment Arbitration, State Sovereign Immunity, and Countermeasures in the Light of the New York and Washington Conventions

Almanac of law. Issue 16 (2025), pages 359–365.

DOI: 10.33663/2524-017X-2025-16-359-365

Bandrovsky V. О.
Investment Arbitration, State Sovereign Immunity, and Countermeasures in the Light of the New York and Washington Conventions

This article addresses the issue of effective enforcement of investment arbitration awards in disputes involving an aggressor state, specifically the Russian Federation, which is waging an armed war against Ukraine. Despite the existence of numerous arbitral awards in favour of Ukrainian investors, the actual enforcement mechanisms remain largely ineffective. The main obstacle lies in Russia’s invocation of sovereign immunity and its refusal to recognise and comply with its international legal obligations. The article analyses the 1965 Washington Convention, which establishes the most favourable international regime for the recognition and enforcement of investment arbitration awards. However, as the Russian Federation is not a party to the Washington Convention, this instrument cannot be applied to disputes involving Russia. At the same time, the author substantiates the applicability of the 1958 New York Convention — to which Russia is a party — as an alternative legal mechanism that permits the recognition of investment awards even in the absence of a direct treaty between the parties. Particular attention is paid to the transformation of investment disputes from a public-law dimension into a quasi-private one, which allows for a departure from the principle of absolute sovereign immunity. Using the example of the ruling of the Supreme Court of Ukraine in case No. 824/182/21, the paper explores how Ukrainian courts interpret investment arbitration as a form of “commercial dispute” for the purposes of applying the New York Convention. The author also examines the 2004 UN Convention on Jurisdictional Immunities of States and Their Property as a normative basis for recognising exceptions to sovereign immunity in cases of a commercial or mixed character. In the context of the russian federation’s systematic non-compliance with arbitral awards, the application of countermeasures becomes increasingly relevant, in particular the freezing of the violating state’s assets as a proportionate response to internationally wrongful acts. In conclusion, the article highlights the need for further theoretical clarification of the legal nature of investment disputes, the development of national legal doctrine, and the creation of procedural mechanisms that would enable effective enforcement of arbitral awards against an aggressor state, particularly through the attachment of its assets abroad.

Key words: investment arbitration, sovereign immunity, New York Convention, Washington Convention, enforcement of arbitral awards, public-law dispute, commercial character, international law, russian federation, countermeasures.

References

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