Ukraine’s Investor-State Arbitration and Recent ICSID Cases
Introduction
Since Russia’s full-scale invasion in 2022, Ukraine has experienced a significant rise in investor-state dispute settlement (ISDS) claims. ISDS permits foreign investors to bring claims directly against states under international investment treaties, most commonly bilateral investment treaties (BITs), where states consent to arbitration in exchange for providing certain protections to foreign investments. These protections typically include fair and equitable treatment (FET), protection against unlawful expropriation, and non-discrimination.¹
While ISDS claims are not unusual for states undergoing political or economic upheaval, Ukraine’s situation is exceptional in scale and context. The combination of armed conflict, emergency economic regulation, sanctions, and nationalisations has generated a surge of disputes brought by foreign investors challenging state conduct adopted during wartime. These claims highlight the tension between a state’s sovereign right to act in the interests of national security and public policy, and its continuing obligations under international investment law.
Key Legal Framework and Why These Claims Arise
ISDS claims against Ukraine arise primarily under BITs, which establish substantive standards of investor protection and provide consent to arbitration, often under the auspices of the International Centre for Settlement of Investment Disputes (ICSID).² Once a claim is registered at ICSID, it is heard by an arbitral tribunal which grants binding and internationally enforceable awards.
The most frequently invoked treaty protections in claims against Ukraine are protection against expropriation and the obligation to accord FET. Expropriation may be direct, involving formal seizure or transfer of ownership, or indirect, where state measures substantially deprive an investor of the use, value, or control of its investment without formal confiscation.³ The FET standard requires states to act transparently, predictably, and in good faith, and prohibits conduct that is arbitrary, discriminatory, or disproportionate.⁴
Wartime economic and regulatory measures have been a central driver of recent claims. Sanctions imposed on individuals and entities, asset freezes, and nationalisations adopted in response to security concerns have exposed Ukraine to allegations that such measures breached treaty protections. A particularly significant feature of investment treaty law is that protections attach primarily to corporate entities rather than individual shareholders. As a result, a company linked to a sanctioned individual may still qualify as a protected investor if it satisfies the treaty’s nationality and ownership requirements.⁵ This legal framework explains why claims continue to be brought even where the underlying measures were adopted for legitimate public policy or national security reasons.
Recent Claims Against Ukraine
Ukraine has accumulated substantial experience as a respondent state in investor-state arbitration. Publicly available data indicates that, as of late 2025, Ukraine had been involved in 47 investor-state cases, including at least nine pending ICSID proceedings.⁶
In January 2026, Ukraine announced that it had appointed Clifford Chance to defend two ICSID arbitration claims brought by entities linked to a sanctioned Ukrainian oligarch.⁷ The firm was selected through a competitive tender process, reflecting Ukraine’s strategic approach to managing its arbitration exposure. Although the government has not disclosed the identity of the claimants, the applicable treaties, or the amounts claimed, the disputes concern measures adopted in the context of wartime sanctions and regulation.
These cases form part of a broader pattern. In AEROC Investment Deutschland GmbH v Ukraine, a German investor alleges that the nationalisation of its Ukrainian concrete plant subsidiary, following sanctions, constituted unlawful expropriation.⁸ Similarly, in EMIS Finance BV v Ukraine, a Dutch investor challenges the nationalisation of a Ukrainian bank under the Netherlands-Ukraine BIT.⁹ Another prominent dispute, ABH Holdings SA v Ukraine, involves a Luxembourg-based investor seeking over USD 1 billion in compensation for the alleged unlawful nationalisation of a bank, relying on the Belgium-Luxembourg-Ukraine BIT.¹⁰
Across these cases, claimants raise similar arguments, contending that state measures adopted in response to sanctions or security concerns unlawfully interfered with their investments. Tribunals are therefore required to assess whether such measures amount to direct or indirect expropriation, whether they complied with the FET standard, and whether the claimants qualify as protected investors under the relevant treaties, notwithstanding links to sanctioned individuals.
Conclusion
Ukraine’s recent ICSID cases illustrate the complex legal challenges that arise when states adopt emergency measures during wartime. These disputes demonstrate how investment tribunals scrutinise sanctions, nationalisations, and regulatory interventions through the lens of treaty protections, even where such measures are motivated by national security or public policy objectives.
The cases also underscore broader implications for international investment law. They highlight the continuing exposure of states to ISDS claims during crises, the importance of corporate nationality and ownership structures in determining investor protection, and the financial and policy risks associated with large-scale arbitration proceedings. More broadly, these disputes contribute to the evolving jurisprudence on how tribunals balance sovereign regulatory authority against investor rights in extraordinary circumstances. Their outcomes are likely to influence how future tribunals assess crisis-driven state action, shaping the relationship between public policy, national security, and investor protection under international law.
Footnotes
¹ Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012).
² Convention on the Settlement of Investment Disputes between States and Nationals of Other States (opened for signature 18 March 1965, entered into force 14 October 1966) 575 UNTS 159.
³ Zachary Douglas, The International Law of Investment Claims (CUP 2009).
⁴ Rudolf Dolzer, ‘Fair and Equitable Treatment: Today’s Contours’ (2014) 12 Santa Clara Journal of International Law 7.
⁵ Zachary Douglas, The International Law of Investment Claims (CUP 2009).
⁶ UNCTAD, Investment Dispute Settlement Navigator (accessed 2025).
⁷ Global Arbitration Review, ‘Clifford Chance wins tender for Ukraine ICSID cases’ (2026).
⁸ AEROC Investment Deutschland GmbH v Ukraine (ICSID Case No ARB/23/XX).
⁹ EMIS Finance BV v Ukraine (ICSID Case No ARB/22/XX).
¹⁰ ABH Holdings SA v Ukraine (ICSID Case No ARB/23/XX).
Bibliography
Treaties
Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965).
Germany-Ukraine Bilateral Investment Treaty (1993).
Netherlands-Ukraine Bilateral Investment Treaty (1994).
Belgium-Luxembourg Economic Union-Ukraine Bilateral Investment Treaty (1997).
Cases
AEROC Investment Deutschland GmbH v Ukraine (ICSID Case No ARB/23/XX).
EMIS Finance BV v Ukraine (ICSID Case No ARB/22/XX).
ABH Holdings SA v Ukraine (ICSID Case No ARB/23/XX).
Books
Dolzer R and Schreuer C, Principles of International Investment Law (2nd edn, OUP 2012).
Douglas Z, The International Law of Investment Claims (CUP 2009).
Schreuer C et al, The ICSID Convention: A Commentary (2nd edn, CUP 2009).
Reports and Databases
UNCTAD, Investment Dispute Settlement Navigator.
Global Arbitration Review, Ukraine arbitration coverage (2025-2026).
Image Credits
Glib Albovsky on Unsplash <https://unsplash.com/photos/a-view-of-a-city-with-a-statue-in-the-middle-sbPI02mZqxs>
