Appeal court orders Russia to pay Azovmash about US$20 million for lost assets and foregone profits
The Northern Commercial Court of Appeal in Kyiv has ordered the Russian Federation to pay US$19.5 million (UAH 713.61 million) in compensation to Azovmash, a machine-building plant in Mariupol, for damages caused, and has overturned the first-instance ruling that rejected the company's claim against Russia.
Source: the court's ruling dated 23 December
Details: In October 2024, Azovmash filed a lawsuit with the Kyiv Commercial Court against Russia, represented by the Russian Embassy in Ukraine, seeking damages of US$19.5 million.
The claim concerned losses suffered as a result of the Russian Federation's full-scale military aggression against Ukraine, accompanied by hostilities in the city of Mariupol, which led the company to lose property assets and forego profits amounting to US$19.5 million.
The Kyiv Commercial Court dismissed Azovmash's claim against Russia, noting that the company, which traded products of the Azovmash group's companies in Mariupol, had failed to provide sufficient evidence to substantiate the claimed losses.
The company subsequently lodged an appeal, seeking to prove that it could and should have received the income in question and that Russia's military actions were the sole and sufficient reason depriving it of the opportunity to make a profit.
The panel of judges of the court of appeal disagreed with the conclusions of the local commercial court that, based on the evidence provided, it was impossible to establish the actual amount of damage caused by Russia's armed aggression against Ukraine for which compensation was sought in the case.
In particular, the Northern Commercial Court of Appeal took into account the general approaches set out in the methodology for determining damage and losses, approved by a joint order of the Ministry of Economy and the State Property Fund, as well as the results of the commodity and valuation components of a comprehensive expert examination.
It concluded that the total amount of damage suffered by Azovmash in the form of lost or devalued assets and lost profits amounts to US$19.5 million, or UAH 713.61 million hryvnias, of which UAH 434.63 million hryvnias (about US$10 million) represent lost profits.
As a result, the appellate court overturned the ruling of the Kyiv Commercial Court and ordered Russia to pay UAH 713.61 million (US$19.5 million) in compensation for damages.
The ruling enters into force on the day it is issued and may be appealed to the Supreme Court.
According to YouControl, Azovmash LLC is currently registered in Kyiv and owned by the Cypriot company Kivirama Limited, with Taras Polishchuk (Monaco) listed as the beneficial owner.
Background: The Eastern Commercial Court of Appeal previously ruled in favour of PJSC Alchevsk Coke and Chemical Plant, ordering the Russian Federation to pay more than UAH 927.5 million (US$21.4 million) in compensation for the destruction of critically important company documentation.
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