Ukraine approves procedure for compensation of losses by Russian invasion for ships calling at its ports.
Up to UAH 20 billion has been earmarked for this purpose by the Ukrainian government.
The introduction of the compensation mechanism will allow charterers and shipowners to continue to secure calls in the country´s ports.
The procedure will apply for damage suffered by charterers, operators and owners of sea and inland waterway vessels as a result of the war. This applies to vessels flying Ukrainian and foreign flags, except for russia and Belarus, according to a government statement.
According to the procedure, compensation will be provided to the shipowner who has been denied compensation in writing by the insurer for damage caused by the war.
Only shipowners who have concluded an insurance contract or P&I (Protection and Indemnity) policy in accordance with the procedure established by the legislation of Ukraine or another state are entitled to compensation.
The damage to be compensated includes losses incurred by the vessel due to irreparable loss or destruction, the cost of repairing structural damage to the vessel which has rendered it unseaworthy, losses due to loss of or damage to cargo, expenses relating to damage to the health or life of a passenger or crew member.
As the Ukrainian government states, the shipowner may submit a set of documents to the Ministry for Communities, Territories and Infrastructure Development no later than 90 calendar days from the date of receipt of the insurer’s refusal to provide insurance compensation.
Oleksandr Kubrakov, Deputy Prime Minister for Restoration of Ukraine and Minister for Communities, Territories and Infrastructure Development said:
“The introduction of the compensation mechanism will allow charterers and shipowners to continue to secure calls at our ports regardless of whether the grain deal works or not. As a country that has ratified international conventions, Ukraine has the right to free commercial navigation. And we, for our part, are doing everything we can to find solutions that will open traffic to and from our ports and not depend on the aggressor country, which has been blocking traffic for more than seven months, even within the framework of the grain initiative.”
The Verkhovna Rada of Ukraine approved amendments in February 2023 to the Law of Ukraine “On the State Budget of Ukraine for 2023”, which provide charterers, operators and owners of sea and inland waterway vessels with guarantees of compensation for damage caused by the war.