Moscow, Russia

Sanctions as a threat for access to foreign arbitration

By Ksenia Deeva, Nektorov, Saveliev & Partners

The Supreme Court of Russia issued a ruling1 that challenged all arbitration clauses concluded with Russian sanctioned companies. The main point is the following: Russian courts have the right to establish its exclusive competence due to the sanctions.

In this case, the claim of the Russian sanctioned respondent was aimed at prohibiting the Polish claimant from carrying out certain actions, to continue the proceedings in international commercial arbitration (anti-suit injunction), located out of Russia. The Russian company justified this demand with the sanctions imposed on it by the European Union. The court of first instance noted that 1) the parties concluded the arbitration agreement, 2) the fact of imposed sanctions is not suffcient for exclusive competence of Russian courts and 3) the sanctioned person needs to explain the diffculties it encountered during arbitration proceedings. The court of cassation supported these conclusions.

However, the Supreme Court concluded that restrictive measures themselves are a barrier to access to justice. Thus, in order to refuse foreign arbitration and submit the dispute to a Russian court, a request from a Russian sanctioned person is enough.

The company shall not prove the effect of sanctions on the enforceability of the arbitration clause. The fact that sanctions are adopted is enough to consider access to justice as restricted.

This position has extremely negative consequences for the institution of arbitration in general. The current situation is as follows. The Russian person, without proving any obstacles to justice in the agreed neutral place of arbitration, is entitled to unilaterally transfer the dispute to Russian court, thereby depriving the foreign person of the opportunity to participate equally in the proceedings with impartial arbitrators.

The opinion of the Supreme Court challenged the validity and enforceability of arbitration clauses concluded between Russian and foreign parties.

1) Dated 9th December 2021 (Case No. A60-36897/2020, Pojazdy Szynowe PESA Bydgoszcz SA v UralTransMash).


Ksenia Deeva

Ksenia Deeva

GGI member firm
Nektorov, Saveliev & Partners
Law Firm Services
Moscow, Russia
T: +7 495 646 81 76
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Nektorov, Saveliev & Partners is a law firm established in 2006 in Moscow, Russia, focussed on providing comprehensive legal solutions to corporate and private clients under Russian and English law. Their main practice areas are public-private partnership, tax, corporate and M&A, arbitration and litigation, banking and finance, investments, and real estate. They provide legal support to clients in Russia, CIS countries (Belarus, Kazakhstan, Ukraine), and worldwide.

Ksenia Deeva specialises in supporting disputes in arbitration courts and in courts of general jurisdiction, including ones with the participation of foreign entities, as well as on corporate law. Ksenia graduated from the Moscow State Institute of International Relations under the Ministry of Foreign Affairs of the Russian Federation (MGIMO) and Kutafin Moscow State Law University (MSAL).


Published: Litigation & Dispute Resolution Newsletter, No. 16, Summer 2022 l Photo: scaliger - stock.adobe.com

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