Appeal court orders Russia to pay Azovmash around US$20m for loss of assets and profit
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 loss and damage, overturning a first-instance ruling that had dismissed the company's claim against Russia.
Source: the court 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 was for 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 caused the company to lose property and profits amounting to US$19.5 million.
The Kyiv Commercial Court had dismissed Azovmash's claim against Russia, noting that the company, which traded Azovmash Group products in Mariupol, had failed to provide sufficient evidence to substantiate the losses claimed.
The company subsequently lodged an appeal, seeking to prove that it could and should have earned the income in question and that Russia's military actions were the sole and entire reason for its inability to generate the lost revenue.
The appeal court judges disagreed with the local commercial court's conclusions that, based on the evidence provided, it was impossible to establish the actual amount of loss and damage caused by Russia's armed aggression against Ukraine for which compensation was sought.
Specifically, the Northern Commercial Court of Appeal followed the guidance laid down for determining loss and damage that had been approved by a joint order of the Ministry of Economy and the State Property Fund, and also took into account the results of the commodity and valuation sections of a comprehensive expert examination.
It concluded that Azovmash has suffered total losses in the form of lost or devalued assets and lost profits amounting to UAH 713.61 million (about US$19.5 million), of which UAH 434.63 million (US$10 million) represents lost profits.
Accordingly, the appeal court overturned the ruling of the Kyiv Commercial Court and ordered Russia to pay UAH 713.61 million (US$19.5 million) in compensation.
The ruling, which took immediate effect, can be appealed at the Supreme Court.
According to the online company verification service YouControl, Azovmash LLC is currently registered in Kyiv and owned by the Cypriot company Kivirama Limited, with Monaco resident Taras Polishchuk listed as the beneficial owner.
Background: The Eastern Commercial Court of Appeal previously ruled in favour of Alchevsk Coke and Chemical Plant PJSC, 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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