War damages: Ukrainian space company with new approach to make Russia pay 530 million euros
Vitaly Kucherenko is the managing director of CheZaRa, a Ukrainian space telemetry company that employed 15,000 people. Now he employs barely 300 people and he claims Russia is to blame. However, Kuchurenko has a somewhat novel approach to rebuilding his business. Its story begins in 2014…
Crimea: a turning point
“There was a time when they didn’t have a space industry without us.”
Kucherenko says CheZaRa was once so important to the Russian space industry that after 2014, when employees unanimously decided to stop supplying their technology in light of the illegal annexation of Crimea, the number of accidents surrounding Russian spacecraft launches has increased.
But the move resulted in heavy losses for the Chernihiv-based company, which has been in business for more than six decades: it lost more than 86% of its gross revenue.
But the decisive economic setback came nearly a decade later with Russia’s full-scale invasion of Ukraine.
In April 2022, the Russian army besieged Chernihiv for a month. The New Yorker described the offensive as “an urban death trap”.
“After the airstrikes and the shelling of the factory, most of the buildings were destroyed,” says Kucherenko, who believes that Russia, knowing the potential of his business, aimed to destroy the factory, among other things.
CheZaRa had worked, in the words of Kucharenko, “in all international programs conducted by other states. For example, there were NASA programs. Together with NASA, we worked for the Sea Launch program of the UNITED STATES.” The company manufactured telemetry devices for spacecraft; therefore equipment to produce digital or scientific data.
“Equipment was damaged, all infrastructure, technical networks, power supply… were completely destroyed,” Kucherenko added. “It is almost impossible to work in such a company. Therefore, only the critical professions that ensure the order and preservation of goods are still available.”
Of CheZaRa’s 15,000 employees, only about 300 remain. Kucherenko estimates the losses at 530 million euros, which he believes he can recover in court, despite Russia’s refusal to pay reparations.
A creative legal approach
Kucherenko wants to recover money from Western companies that did business with Russia and are unable to pay their debts to the country due to international sanctions.
“Russia is not ready to pay reparations, it is not ready to pay damages. But there are companies, states that owe Russia money or other things, because it is not prohibited by international law to assign these debts under an assignment agreement. These European companies and states can pay us at the expense of a debt they owe to Russia.”
To achieve this, CheZaRa must first take the case to Ukrainian courts and win. Then, the judgment must be recognized in the countries where the company wants to claim money: Italy, Germany, Poland and France.
Obstacles to overcome
Experts think it’s possible, but there’s a major hurdle: state immunity.
“There is a common misconception that states are equal, so the courts of one state cannot sue another state,” said Holger Hestermeyer, professor of international and European law at King’s College London. , to Euronews.
“This usually means that in cases where another country is sued, that country asserts its immunity and the case is over. Now immunity is no longer absolute.”
CheZaRa lawyers argue that Russia is exempt from immunity because of a UN resolution that says immunity does not apply if a country seriously violates basic freedoms and human rights internationally guaranteed.
Hestermeyer explains that this is not the first case in which an investor has obtained a judgment against Russia and then claimed the money by searching around the world for its business assets.
“None of this will be easy,” he acknowledged. “And there will be incredibly high hurdles along the way. And they’re not necessarily likely to win. But so far, Ukraine has also very carefully crafted a legal strategy. And I wouldn’t say out of hand that there’s no chance at all.”
“CheZaRa has always been a pioneer on many issues,” says Kucherenko. “I think our lawyers will also be on the front line.”
He adds: “If it doesn’t work, we will wait, like everyone else, for Ukraine’s victory… and reparations.”