Learn Finnish: Mikäli vahinko ei ollut korvattava, sopimus raukesi. - In the event that the damage was not compensable, the contract became void.

Yes, you absolutely could. Mikäli means "if" or "in the event that", just like jos, but it is more formal and often used in legal, official, or written contexts. It fits perfectly here because the sentence discusses a formal matter involving contracts and compensation.

Why is there no conditional mood (like olisi ollut) in a sentence that uses a conditional conjunction?

Because this sentence is stating a past fact, not a hypothetical scenario. It describes a situation that actually happened: it was determined the damage wasn't compensable, so the contract fell through. If it were a hypothetical situation ("If the damage were not compensable..."), then you would use the conditional mood.

What form of the verb is korvattava, and how does it translate to "compensable"?

It is the present passive participle of the verb korvata (to compensate or replace). While it literally means "to be compensated", this participle form is very often used in Finnish as an adjective that translates to English words ending in "-able", such as "compensable", "payable", or "replaceable".

I don't recognize the base form of the verb raukesi. What is it and why does it change so much?