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An analytical breakdown of the legal mechanisms for relocating sanctions-related disputes to the Russian Federation under the Russian Arbitration Code.

Sanctions-Related Disputes Under Articles 248.1 and 248.2 of the Russian Arbitration Code: Relocating Jurisdiction to Russia and Anti-Suit Injunctions

Sanctions-Related Disputes Under Articles 248.1 and 248.2 of the Russian Arbitration Code: Relocating Jurisdiction to Russia and Anti-Suit Injunctions

 

August 16, 2026

BRACE Law Firm©

 

Unilateral restrictive measures imposed against Russia, as well as its individuals and legal entities, have significantly impacted the dispute resolution landscape. Although international arbitral institutions located in unfriendly states claim to be apolitical, sanctioned individuals face a series of severe challenges when attempting to enforce previously executed arbitration clauses. These challenges impede or practically deprive them of access to justice. The primary challenges include:

  • the inability to initiate proceedings due to the refusal of foreign banks to process transactions for such individuals, rendering the payment of arbitration fees impossible;
  • the refusal of foreign legal counsel to cooperate with Russian individuals;
  • difficulties in appointing arbitrators;
  • arbitrators' adherence to sanctions regulations effective in their respective jurisdictions, among other obstacles.

To resolve these issues, the Russian legislature introduced Articles 248.1 and 248.2 to the Arbitration Procedure Code of the Russian Federation (the “Russian Arbitration Code”, “APC RF”) through Federal Law No. 171-FZ dated June 8, 2020, On Amending the Arbitration Procedure Code of the Russian Federation to Protect the Rights of Individuals and Legal Entities in Connection with Restrictive Measures Introduced by a Foreign State, State Association and (or) Union and (or) State (Interstate) Institution of a Foreign State or State Association and (or) Union (the "Lugovoy Law"). The Lugovoy Law entered into force on June 19, 2020, upon the expiration of 10 days following its official publication (June 8, 2020). This law also introduced related amendments that, together with Articles 248.1 and 248.2 of the APC RF, form a unified mechanism: Item 7.1 of Part 6 of Article 27 of the APC RF (disputes specified in Article 248.1 of the APC RF are considered by arbitration courts regardless of the subject composition of the participants), Item 3 of Part 1 of Article 244 of the APC RF, Part 2 of Article 247, and Part 1 of Article 252 of the APC RF.

Meanwhile, in practice, these norms were initially utilized infrequently. The landscape shifted in 2022 when sanctions were tightened, and their volume increased exponentially. The response to this was the development of a mechanism for transferring disputes to the jurisdiction of Russian courts. As a result, regulations initially viewed as a tool to ensure access to justice for a narrow group of sanctioned individuals evolved into a highly reliable mechanism for relocating cases to the Russian jurisdiction.[1]

Articles 248.1 and 248.2 of the APC RF constitute procedural law norms and are therefore applied by the court regardless of the execution date of the agreement containing the arbitration or prorogation clause, and regardless of the date the disputed legal relationship arose: judicial proceedings in arbitration courts are conducted in accordance with federal laws effective at the time of the case consideration, the performance of a specific procedural action, or the execution of a judicial act (Part 4 of Article 3 of the APC RF). Notably, in the landmark case No. A60-36897/2020 (Uraltransmash JSC v. PESA Bydgoszcz), the contract containing the arbitration clause was executed in 2013, well before the enactment of the provisions under review.[2]

This article analyzes the provisions of these statutes, their application procedures, the current enforcement landscape, and retaliatory measures implemented by unfriendly states.

Legal Framework for Sanctions-Related Disputes

Articles 248.1 and 248.2 of the APC RF grant Russian entities subject to sanctions (and, in cases stipulated by Item 2 of Part 2 of Article 248.1 of the APC RF, foreign legal entities) the right to relocate a dispute from a foreign court or international commercial arbitration to a Russian arbitration court and to enjoin the counterparty from initiating or continuing proceedings abroad.

Pursuant to Article 248.1 of the Russian Arbitration Code, unless otherwise established by an international treaty of the Russian Federation or an agreement of the parties under which the consideration of disputes involving them is referred to the jurisdiction of foreign courts or international commercial arbitrations located outside the territory of the Russian Federation, the exclusive jurisdiction of arbitration courts in the Russian Federation encompasses cases:

  • involving disputes with the participation of individuals and entities subject to restrictive measures by a foreign state, state association and (or) union, and (or) a state (interstate) institution of a foreign state or state association and (or) union (Item 1 of Part 1 of Article 248.1 of the APC RF);
  • involving disputes of one Russian or foreign entity with another Russian or foreign entity, provided that the basis for such disputes constitutes restrictive measures imposed against citizens of the Russian Federation and Russian legal entities (Item 2 of Part 1 of Article 248.1 of the APC RF).

Entities subject to restrictive measures include (Part 2 of Article 248.1 of the APC RF):

  • Russian citizens and legal entities subject to such measures;
  • foreign legal entities subject to restrictive measures, provided that the basis for applying such measures constitutes restrictive measures imposed against citizens of the Russian Federation and Russian legal entities.

Entities specified in Part 2 of Article 248.1 of the Russian Arbitration Code possess the right to (Part 3 of Article 248.1 of the Russian Arbitration Code):

  • apply for dispute resolution to the arbitration court of the constituent entity of the Russian Federation at their location or place of residence, provided that there are no pending proceedings in a foreign court or international commercial arbitration between the same parties, regarding the same subject matter, and on the same grounds;
  • submit an application, in accordance with the procedure established by Article 248.2 of the APC RF, seeking an injunction to prohibit the initiation or continuation of proceedings in a foreign court or international commercial arbitration.

Part 4 of Article 248.1 of the Russian Arbitration Code contains a restriction on the freedom to choose the venue for dispute resolution in foreign trade contracts. There are grounds under which Russian courts may disregard the arbitration agreement executed between the parties and establish their own exclusive jurisdiction to adjudicate the dispute that has arisen between the parties.

Accordingly, the provisions of Article 248.1 of the APC RF also apply upon the concurrent presence of the following two conditions (Part 4 of Article 248.1 of the Russian Arbitration Code):

  • restrictive measures have been imposed against one of the parties involved in the dispute;
  • the arbitration agreement between the parties is unenforceable due to the application of such measures, which create obstacles to accessing justice.

Concurrently, Part 4 of Article 248.1 of the APC RF formulates an additional (independent) ground for the application of the article, rather than a cumulative condition for the emergence of exclusive jurisdiction. The jurisdiction of the Russian arbitration court also arises by virtue of Part 1 of Article 248.1 of the APC RF – that is, inherently due to the participation in the dispute of a party subject to restrictive measures (Item 1 of Part 1), or due to the fact that restrictive measures served as the basis for the dispute (Item 2 of Part 1). This is precisely how these norms are interpreted by the Supreme Court of the Russian Federation: a dispute falls within the jurisdiction of Russian arbitration courts if it arose in connection with the imposition of restrictive measures by a foreign state, or if obstacles to accessing justice are established for one of the parties, including cases where an arbitration clause exists.[3]

The category of unenforceability of an agreement, utilized in Part 4 of Article 248.1 and Item 4 of Part 2 of Article 248.2 of the APC RF, reproduces the conceptual framework familiar to international arbitration law. Pursuant to Item 3 of Article II of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, June 10, 1958; the "New York Convention"), the court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. The identical triad of grounds is reproduced in Item 5 of Part 1 of Article 148 of the APC RF. In other words, formally, the Russian court does not reject the arbitration agreement per se, but confirms the impossibility of its performance under the prevailing circumstances.[4]

The vulnerability of this approach lies elsewhere: unenforceability is derived from a presumption based on the mere fact that restrictive measures have been imposed, whereas foreign courts and arbitrations evaluate the validity and enforceability of the clause under the law applicable to the arbitration agreement and generally do not recognize such a presumption (see the section "Navigating Sanctions-Related Disputes in Foreign Jurisdictions"). Furthermore, Part 1 of Article 248.1 of the APC RF explicitly conditions its application with the formula "unless otherwise established by an international treaty of the Russian Federation", while Part 3 of Article 3 of the APC RF establishes the priority of the rules of an international treaty on judicial proceedings. The correlation of these provisions with Item 3 of Article II of the New York Convention is discussed neither in Thematic Review No. 8/2026 nor in Ruling of the Constitutional Court of the Russian Federation No. 999-O dated April 29, 2025; however, a corresponding argument should be anticipated from the foreign counterparty.

The provisions of Article 248.1 of the APC RF (Part 5) do not preclude the recognition and enforcement of a foreign court judgment or a foreign arbitral award rendered in an action brought by the entities specified in the article, or if the entity did not object to the consideration of the dispute involving it by a foreign court or international commercial arbitration, including instances where it did not apply for an injunction to prohibit the initiation or continuation of the proceedings.

This rule corresponds to Item 3 of Part 1 of Article 244 of the APC RF (as amended by Federal Law No. 171-FZ dated June 8, 2020), which stipulates that a violation of the exclusive jurisdiction of a court in the Russian Federation constitutes grounds for refusing to recognize and enforce a foreign court judgment, except in cases specified in Part 5 of Article 248.1 of the APC RF. In practice, this allows a sanctioned Russian entity that independently initiated proceedings abroad to seek the enforcement of the foreign judgment it obtained in Russia. For example, the Resolution of the Arbitration Court of the Moscow District dated July 29, 2025, No. F05-8539/25 in case No. A40-221290/2023 upheld the ruling recognizing and enforcing an arbitral award rendered in Switzerland in an action brought by Channel One JSC – an entity included in sanctions lists and therefore qualifying as an entity specified in Part 2 of Article 248.1 of the Russian Arbitration Code.[5]

Applications for Anti-Suit Injunctions Against Foreign Litigation and Arbitration

An entity against which proceedings have been initiated in a foreign court or international commercial arbitration located outside the territory of the Russian Federation concerning disputes specified in Article 248.1 of the APC RF, or if evidence exists that such proceedings will be initiated, possesses the right to apply to the arbitration court of the constituent entity of the Russian Federation at its location or place of residence for an injunction to prohibit the initiation or continuation of such proceedings (Part 1 of Article 248.2 of the Russian Arbitration Code).

The application must specify:

  • the name of the arbitration court to which the application is submitted;
  • the applicant's name, their address or place of residence, as well as the name of the entity against which the injunction is sought, its address, or place of residence;
  • details regarding the claims that may be or have already been filed in a foreign court or international commercial arbitration;
  • circumstances confirming the exclusive jurisdiction of the Russian arbitration courts to hear the dispute, including facts (if any) establishing that the agreement of the parties, according to which the consideration of the dispute involving them is referred to the jurisdiction of a foreign court or international commercial arbitration, cannot be enforced by a party to the dispute;
  • the applicant's demand to enjoin the initiation or continuation of the proceedings;
  • a list of attached documents.

The application may also include the telephone numbers, fax numbers, and email addresses of the applicant and the entities that may initiate or have initiated proceedings in a foreign court or international commercial arbitration, as well as their representatives.

The following are attached to the application (Part 4 of Article 248.2 of the Russian Arbitration Code):

  • copies of documents confirming the intent to initiate proceedings in a foreign court or international commercial arbitration, or the fact that such proceedings have commenced, including demands, claims, lawsuits, and other documents;
  • copies of documents confirming the exclusive jurisdiction of the Russian arbitration courts to adjudicate the dispute;
  • other documents specified in Article 126 of the APC RF (including a document confirming the payment of the state duty or the right to an exemption, documents confirming the dispatch to other persons participating in the case of copies of the application and attached documents, and for a foreign entity – documents confirming its legal status and the right to engage in entrepreneurial and other economic activities).

The judge reviews the application sitting alone under the rules for hearing a case by an arbitration court of the first instance, subject to the specifics established by Part 5 of Article 248.2 of the Russian Arbitration Code.

Notification of Parties and Review of Anti-Suit Injunction Applications

The arbitration court notifies the persons participating in the case of the time and place of the court hearing. The failure of these persons, duly notified of the time and place of the court hearing, to appear does not prevent the consideration of the application.

The procedure for notifying a foreign entity located outside the Russian Federation bears significant practical importance: such an entity is notified by a ruling of the arbitration court via forwarding a letter of request to the justice institution or other competent authority of the foreign state, while the term for hearing the case is extended by the period established by the legal assistance treaty, or in the absence of such a term in the treaty or the absence of a treaty – by no more than one year (Part 3 of Article 253 of the Russian Arbitration Code).

The applicable procedure depends on the state where the addressee is located. This may involve bilateral legal assistance treaties, for instance, the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (The Hague, November 15, 1965), the Agreement on the Procedure for Resolving Disputes Related to Economic Activities dated March 20, 1992 (the Kyiv Agreement), the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters (Minsk, January 22, 1993), and the Convention on Civil Procedure (The Hague, March 1, 1954); concurrently, the court applies the treaty that ensures the most expeditious and least formalized interaction between competent authorities.[6]

Since the injunction provided for by Article 248.2 of the Russian Arbitration Code possesses a preventive nature, the timing factor is critical. A clarification that assists in reducing the timeframe establishes that if a foreign entity has a representative in the Russian Federation authorized to receive notifications of judicial proceedings and other judicial documents, the documents are sent to the address of such representative under the general procedure (Articles 121, 123 of the APC RF), and sending judicial documents to the party's address in the foreign state is not required. Following the service to the foreign entity of a copy of the initial judicial act pursuant to Part 3 of Article 253 of the Russian Arbitration Code, such entity is considered duly notified during the consideration of the case by higher courts, provided the court publishes case progression information on its official website.[7]

Based on the review of the application, the arbitration court issues a ruling under the rules established by Chapter 20 of the Russian Arbitration Code for rendering judgments (Part 7 of Article 248.2 of the APC RF). The ruling on issuing the injunction or refusing the injunction must contain (Part 8 of Article 248.2 of the Russian Arbitration Code):

  • the names of the applicant and the entity against which the injunction is issued;
  • details regarding the claims that may be filed in a foreign court or international commercial arbitration, or details regarding the specific proceedings in respect of which the injunction is established;
  • an indication of the satisfaction of the application to enjoin the entity from initiating or continuing the proceedings, or the refusal to satisfy such application.

The arbitration court's ruling in a case concerning an injunction to prohibit the initiation or continuation of proceedings may be appealed in cassation to the district arbitration court within one month from the date the ruling is issued (Part 9 of Article 248.2 of the APC RF). The law does not provide for an appellate review of such a ruling, and the one-month period is calculated from the date the ruling is issued (rather than from the date it is drafted in full), which demands careful attention when planning procedural steps.

Imposing Judicial Penalties for Non-Compliance with Anti-Suit Injunctions

The arbitration court, based on the principles of fairness, proportionality, and the inadmissibility of extracting benefit from illegal or bad-faith conduct, possesses the right, upon the applicant's demand, to award a monetary sum in their favor, to be recovered from the entity against which the injunction to prohibit the initiation or continuation of proceedings in a foreign court or international commercial arbitration was issued, in the event of their failure to comply with the judicial act.

The amount of the monetary sum awarded by the arbitration court must not exceed the amount of the claims filed in the foreign court or international commercial arbitration, alongside the legal expenses incurred by the disputing party (Part 10 of Article 248.2 of the APC RF). The Supreme Court of the Russian Federation confirmed the permissibility of such a judicial penalty, indicating that it functions as a mechanism to deter actions in unfriendly jurisdictions that effectively deprive sanctioned Russian entities of the ability to protect their rights, and its amount is determined by the court considering the circumstances of each case, capped by the amount of claims filed in the foreign court or arbitration.[8]

The monetary amounts awarded pursuant to Part 10 of Article 248.2 of the Russian Arbitration Code in practice generally correspond to the amount of claims brought against the Russian entity abroad and can reach substantial figures. For instance, in case No. A56-16212/2024, the Arbitration Court of the City of St. Petersburg and the Leningrad Region in March 2024 enjoined Uniper Global Commodities SE and METHA-Methanhandel GmbH from continuing proceedings in an ad hoc arbitration administered by the Permanent Court of Arbitration, awarding LLC Gazprom Export 14.3 billion euros jointly and severally in the event of a violation of the injunction – the exact amount of the foreign companies' claims in the arbitration.[9]

Constitutional Review and Validity of Articles 248.1 and 248.2 of the APC RF

By Ruling of the Constitutional Court of the Russian Federation dated April 29, 2025, No. 999-O, the court refused to accept for consideration the complaint of the company OWH SE i.L. regarding Articles 248.1 and 248.2 of the Russian Arbitration Code. The Constitutional Court of the Russian Federation indicated that the contested provisions cannot be deemed to violate the constitutional rights of the applicant in the specified aspect; however, the constitutionality of these norms was not reviewed on the merits, as the complaint was deemed inadmissible.

Concurrently, the Constitutional Court of the Russian Federation emphasized the dispositive nature of the mechanism provided by the reviewed articles. The mere imposition of restrictive measures against an entity does not trigger the automatic application of the exclusive jurisdiction of Russian courts – the entity has the right to decide independently whether to utilize this mechanism by contesting the jurisdiction of the foreign court (arbitration), or not to object to the consideration of the dispute involving it by a foreign court or international commercial arbitration, thereby accepting the associated risks.[10]

The catalyst for issuing the aforementioned ruling was the dispute between VTB Bank (PJSC) and VTB Bank (Europe) SE, subsequently renamed OWH SE i.L. The parties executed an agreement on the termination of transactions and the settlement of accounts, which contained, inter alia, an arbitration clause mandating the resolution of any disputes and claims of the parties arising from and in connection with it at the Hong Kong International Arbitration Centre (HKIAC).

As a result of the debt arising under the agreement, the bank filed a lawsuit with the arbitration court against VTB Bank (Europe) SE for its recovery (case No. A56-84760/2023). Furthermore, the bank applied to the same court seeking to establish injunctions against VTB Bank (Europe) SE, deriving from the mandates of Article 248.2 of the APC RF, and to award the bank a monetary sum equivalent to the aforementioned claim amount in the event these injunctions were violated (case No. A56-103943/2023). By a ruling of the arbitration court, affirmed by higher appellate courts, the bank's application to establish the specified injunctions was satisfied.

VTB Bank (Europe) SE requested to declare Articles 248.1 and 248.2 of the Russian Arbitration Code unconstitutional, to the extent that these provisions permit Russian courts to assert exclusive jurisdiction over a dispute referred by the parties' agreement to an international commercial arbitration on the territory of a friendly foreign state, and to enjoin the initiation or continuation of proceedings in an international commercial arbitration or foreign court concerning such a dispute.

The court refused to accept the complaint, stating the following:

  • the contested provisions do not violate the applicant's constitutional rights;
  • the legislation provides for exceptions from the exclusive jurisdiction of Russian courts;
  • arbitration courts must comprehensively examine the circumstances of each case;
  • guarantees for the observance of the procedural rights of all participants are established;
  • in the specific case, the courts obtained and evaluated evidence of the unenforceability of the agreement to hear the dispute in a foreign arbitration.[11]

Strategic Guidelines from the Supreme Court of the Russian Federation: Thematic Review No. 8/2026

On June 17, 2026, the Presidium of the Supreme Court of the Russian Federation approved Thematic Review No. 8/2026, a significant portion of which is dedicated to the application of Articles 248.1 and 248.2 of the Russian Arbitration Code.[12] The following positions hold significant practical value:

  • An application to enjoin the initiation or continuation of proceedings (Article 248.2 of the Russian Arbitration Code) cannot be left without consideration based on Items 1 and 6 of Part 1 of Article 148 of the APC RF by referencing an arbitration clause: such demands differ from substantive claims, are reviewed exclusively by a state arbitration court at the applicant's location, and the basis for their review is the question of the invalidity of the clause (Item 15 of the review).
  • The suspension of visa issuance to citizens of the Russian Federation by an unfriendly state, preventing participation in a foreign court hearing, may be qualified as a restrictive measure regardless of the presence of personal sanctions against the applicant (Item 16 of the review).
  • A dispute falls within the jurisdiction of Russian arbitration courts if it arose in connection with the imposition of restrictive measures by a foreign state, or if obstacles to accessing justice are established for one of the parties, including cases where an arbitration clause exists. Furthermore, obstacles may manifest not only in an absolute inability to protect a right but also in the burdensomeness of resolving the dispute under the initially agreed terms: difficulty in paying the arbitration fee, lack of practical ability to retain foreign counsel, restrictions on crossing state borders, etc. (Item 17 of the review).
  • When determining jurisdiction for disputes complicated by a foreign element, courts must consider the actual place of contract performance (Item 3 of Part 1 and Item 10 of Part 1 of Article 247 of the APC RF, Item 15 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2017, No. 23) (Item 18 of the review).
  • When reviewing an application for the recognition and enforcement of an arbitral award rendered on the territory of an unfriendly state, the court examines it for compliance with the public policy of the Russian Federation; when a dispute is heard by a panel of arbitrators consisting of representatives from unfriendly states, a lack of impartiality and objectivity is presumed until proven otherwise (Item 19 of the review).
  • Enforcing an arbitral award in favor of an organization under the jurisdiction of an unfriendly state may be classified as a violation of the public policy of the Russian Federation, particularly taking into account the temporary procedure for fulfilling obligations and the requirements for the creditor's account details (Item 20 of the review).
  • The imposition of a judicial penalty for violating an injunction to prohibit the initiation or continuation of proceedings in a foreign court is a permissible measure; its amount is determined considering the circumstances of the case and is capped by the amount of the claims filed abroad (Part 10 of Article 248.2 of the APC RF) (Item 21 of the review).

Enforcement Landscape and Case Law Regarding Articles 248.1 and 248.2 of the Russian Arbitration Code

Courts actively adjudicate cases concerning the exclusive jurisdiction of Russian courts over disputes involving entities subject to restrictive measures, as well as the application of injunctions against hearing disputes involving such entities in a foreign court or international commercial arbitration.

With the introduction of Articles 248.1 and 248.2 into the Russian Arbitration Code, judicial practice developed such that the mere fact of imposing restrictive measures (sanctions) against a Russian entity was deemed sufficient to conclude that such entity's access to justice was restricted in proceedings before a foreign court or commercial arbitration outside Russia, justifying the relocation of the dispute to the jurisdiction of a Russian court. As a corollary, applicants are relieved from the burden of proving the existence of factual impediments to exercising their right to access justice, at least in the jurisdiction that enacted the corresponding restrictive measures.[13] However, this operates strictly as a presumption ("is presumed sufficient"), which may be rebutted by evidence demonstrating the genuine accessibility of justice in the respective jurisdiction (see cases No. A19-10204/2022, No. A55-24707/2022, No. A56-39502/2024 detailed below).

For example, in the previously mentioned case No. A60-36897/2020 (Uraltransmash JSC v. PESA Bydgoszcz), the Supreme Court of the Russian Federation formulated a position subsequently integrated into Thematic Review No. 8/2026: from a systematic interpretation of Item 1 of Part 2 and Item 1 of Part 3 of Article 248.1 of the APC RF, and considering legislative intent, it follows that "the mere fact of imposing restrictive measures against a Russian entity is presumed sufficient to conclude that such entity's access to justice in a foreign state is restricted".[14]

According to the Supreme Court of the Russian Federation, restrictive measures possess "firstly, a personal nature, meaning they are addressed to a specific individual personally, and secondly, a public nature, meaning they are universally binding and founded on the force and authority of public state power. The imposition of restrictive measures (bans and personal sanctions) by foreign states against Russian entities compromises their rights, at a minimum reputationally, thereby inherently placing them at a disadvantage compared to other entities." Doubts arise as to whether impartiality will be maintained and guarantees of a fair trial observed in a dispute involving an entity located in a state that applied restrictive measures, when heard on the territory of a foreign state that also applied restrictive measures.[15]

Nevertheless, in the same case No. A60-36897/2020, the application by Uraltransmash JSC for an injunction was not satisfied. Overturning the decisions of the lower courts, the Judicial Collegium refused to grant the application because, by the time the cassation appeals were heard, the proceedings at the Stockholm arbitration had concluded, and there were no grounds to believe that the arbitration dispute was continuing or that the entity against whom the injunction was sought was in a position to take any actions to execute it. This conclusion carries distinct practical significance: the injunction provided by Article 248.2 of the APC RF is preventive in nature and must be sought before the foreign proceedings conclude.[16]

In the Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated October 8, 2025, No. 305-ES24-22418 in case No. A40-194447/2023 involving a lawsuit by Sovcombank PJSC (procedural successor – LLC Assistance to International Settlements) against J.P. Morgan Securities PLC and LLC CB J.P. Morgan Bank International for the joint recovery of damages, the Judicial Collegium affirmed the lower courts' conclusion regarding the jurisdiction of the Russian court based on Article 248.1 of the APC RF. The court noted that "international sanctions are in effect against Sovcombank PJSC, and the dispute itself arose due to them and is aimed at achieving an effect contrary to the sanctions pressure from unfriendly states, raising doubts about the impartial and independent consideration of the dispute by a foreign court." Arguments regarding the existence of an arbitration clause were dismissed because the dispute arose from the foreign debtor company's compliance with the sanctions mandates of the state where the respective arbitration institution was located. The Collegium emphasized that a party's compliance with the sanctions restrictions of an unfriendly state violates the public policy of the Russian Federation, and the mechanism for unblocking funds forms part of the sanctions regime of an unfriendly state, which cannot abridge a Russian entity's right to judicial protection in national jurisdiction. However, the contested judicial acts were overturned, and the case was remanded for a new trial to the Arbitration Court of the City of Moscow (Part 1 of Article 291.14 of the APC RF). The Judicial Collegium concluded that the lower courts failed to establish all legally significant facts, including those concerning the assessment of the feasibility of returning "frozen" funds out of court, and directed the court to address the issue of joining the Bank of Russia in the proceedings.[17] It should be noted that the primary reason for overturning the judgments was not the issue of jurisdiction, but the limits of joint liability: the courts' conclusions regarding joint harm caused by the foreign company and its Russian affiliate were made without fully establishing case facts, including the group's corporate structure, the specifics of foreign banks operating within the Russian Federation, and the corporate group's manipulation of asset independence to evade obligations.

In case No. A73-15265/2022, the Arbitration Court of the Far Eastern District, affirming the jurisdiction of the arbitration courts of the Russian Federation to adjudicate the dispute despite the presence of a clause referring the dispute to the International Chamber of Commerce (ICC) Arbitration, ruled that "considering the widely known fact, which requires no proof, of the imposition of restrictive sanctions against the Russian Federation by foreign states, including members of the European Union (including France), which directly impedes access to justice for its residents, the commercial dispute initiated by a legal entity falling within the scope of sanctions impact was subject to the jurisdiction of Russian arbitration courts".[18]

An alternative approach presumes the necessity for Russian courts to examine the circumstances of each specific case. The entity subject to restrictive measures must prove that such measures genuinely restrict its access to justice – i.e., create obstacles to exercising the right to judicial protection in a foreign court or commercial arbitration. When determining the application of the provisions under review, the genuine presence or absence of the respective entity's access to justice must be evaluated. Such decisions are significantly less common in practice, yet they are not entirely excluded.[19]

Please note that for the purposes of applying Articles 248.1 and 248.2 of the Russian Arbitration Code, the general guidelines from the highest judicial instances on cross-border disputes remain relevant. These include the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2017, No. 23, "On the Consideration by Arbitration Courts of Cases Involving Economic Disputes Arising from Relationships Complicated by a Foreign Element" (specifically, Item 4 – verification of exclusive jurisdiction when deciding whether to accept a statement of claim; Item 15 – criteria for a close connection of the disputed legal relationship with the territory of the Russian Federation); the Resolution of the Plenum of the Supreme Court of the Russian Federation dated December 10, 2019, No. 53, "On the Performance by the Courts of the Russian Federation of the Functions of Assistance and Control in Relation to Arbitral Proceedings and International Commercial Arbitration"; and the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated June 11, 1999, No. 8 (as amended on June 27, 2017), "On the Operation of International Treaties of the Russian Federation Concerning Issues of Arbitration Procedure". When assessing the consequences of foreign proceedings, the clarifications contained in the practice reviews of the Presidium of the Supreme Arbitration Court of the Russian Federation must be considered: on the application of interim measures (Information Letter dated July 7, 2004, No. 78); on the recognition and enforcement of foreign court judgments, the challenging of arbitral awards, and the issuance of writs of execution for the compulsory enforcement of arbitral awards (Information Letter dated December 22, 2005, No. 96); on the application of the public policy clause as a ground for refusing recognition and enforcement of foreign judicial and arbitral awards (Information Letter dated February 26, 2013, No. 156); and on the hearing of cases involving foreign entities (Information Letter dated July 9, 2013, No. 158).

It is critical to note that the Information Letters of the Presidium of the SAC RF (No. 78 dated July 7, 2004, No. 96 dated December 22, 2005, No. 156 dated February 26, 2013, No. 158 dated July 9, 2013) and the Resolution of the Plenum of the SAC RF No. 8 dated June 11, 1999, were adopted prior to the introduction of Articles 248.1 and 248.2 into the APC RF and do not directly govern special exclusive jurisdiction. However, they should be referenced to establish the general procedural context, particularly regarding issues of public policy, the recognition and enforcement of foreign judgments, and interim measures.

The interplay between general and specific regulations concerning the consequences of an arbitration clause warrants particular attention. Generally, if there is an agreement between the parties to submit the dispute to an arbitral tribunal and a timely objection from any party, the court leaves the statement of claim without consideration, unless it determines that the agreement is invalid, inoperative, or incapable of being performed (Item 5 of Part 1 of Article 148 of the APC RF; Item 16 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated December 10, 2019, No. 53). However, concerning applications filed pursuant to Article 248.2 of the APC RF, the Supreme Court of the Russian Federation clarified that the rules of Items 1 and 6 of Part 1 of Article 148 of the APC RF do not apply: this category of cases is heard exclusively by a state arbitration court at the applicant's location, regardless of the existence of an arbitration clause and the parties' actions to execute it (Item 15 of Thematic Review No. 8/2026). Thus, a foreign counterparty's reliance on an arbitration agreement does not inherently constitute a procedural obstacle to hearing an application for an injunction; the fate of the clause is resolved when reviewing the application on its merits, not under the procedure of Article 148 of the Russian Arbitration Code.[20]

In case No. A19-10204/2022, the cassation court noted that the plaintiff failed to provide evidence of "restrictive measures specifically imposed against it by the states where the defendant is located (the Italian Republic) or where the arbitration institution is situated (the Kingdom of Sweden)". Furthermore, as the court noted, the Arbitration Institute of the Stockholm Chamber of Commerce (the Kingdom of Sweden) guaranteed on its website the impartiality and independence of the proceedings for Russian parties. Under these conditions, for Russian economic entities, "compliance with the guarantees of a fair trial is presumed".[21]

In case No. A55-24707/2022, the court was not presented with evidence demonstrating the impossibility of paying the arbitration fee at the Arbitration Institute of the Stockholm Chamber of Commerce, and the plaintiff's position was based on "assumptions regarding the biased attitude of the arbitrators against the plaintiff".[22]

In case No. A40-243946/2024, the court refused to satisfy the application to enjoin the initiation of proceedings under Article 248.2 of the Russian Arbitration Code. The court indicated that "the applicant provided no evidence that any proceedings have been initiated or are intended to be initiated against it in a foreign court. In violation of the requirements of Article 248.2 of the APC RF, the applicant failed to identify any existing proceeding in a court abroad concerning which the Russian court should issue an injunction. Furthermore, no evidence was provided to demonstrate a real risk of such proceedings being initiated in the future".[23]

Despite the imposed sanctions, a party's access to justice often remains viable due to a series of mitigating circumstances:

  • sanctions restrictions on banking transfers do not cover all credit organizations. This allows the Russian party to utilize the financial services of non-sanctioned banks;
  • when selecting arbitrators, the parties are not exclusively bound by the roster provided by the arbitration institution. They possess the right to appoint professionals from among arbitrators representing neutral states or states friendly to Russia;
  • many arbitration institutions located in countries Russia considers unfriendly have adapted their rules for dealing with sanctioned entities. For example, the London Court of International Arbitration (LCIA), located in the UK. On October 17, 2022, it received General Licence INT/2022/1552576 issued by the UK Office of Financial Sanctions Implementation (OFSI), which allowed it to administer disputes involving sanctioned entities, including accepting payments from them. Such a licence enables the LCIA to fulfill its obligations regarding mandatory arbitration clauses in order to uphold the rule of law.[24] Note that this licence was revoked on March 28, 2025.[25] In its place, OFSI issued a General Licence covering arbitration costs INT/2025/5787748 (dated March 28, 2025, with no expiration date), applicable broadly to arbitration institutions and arbitrators.[26] Crucially, this licence permits payments to arbitration institutions and arbitrators for their fees and expenses up to a limit of 500,000 pounds sterling per arbitration proceeding; expenses exceeding this cap require an individual licence.

In case No. A56-39502/2024, the court pointed out that no sanctions had been imposed against the plaintiff itself, meaning Article 248.1 of the APC RF was inapplicable. The claim was subject to the jurisdiction of a Swiss court due to an existing prorogation agreement between the plaintiff and the defendant assigning dispute resolution to the courts of Zurich (Switzerland). The court also cited an opinion from a Swiss law firm stating that "sanctions imposed by Switzerland against Russia do not prevent Russian entities (even if they fall directly under sanctions) from seeking judicial protection in Swiss state courts and receiving necessary legal services in Switzerland. Furthermore, this opinion confirms that Russian legal entities (including those subjected to sanctions by Switzerland) actively participate in litigation in Swiss courts".[27]

Nonetheless, sanctions can indeed pose a barrier to an entity's access to justice. For instance, in case No. A56-57238/2020, the courts determined that US and Ukrainian sanctions imposed against the plaintiff mandated the blocking of its assets. This restricts the plaintiff's right to utilize and dispose of them, as well as to conduct trading operations. Because Russian and foreign banks refuse to process transactions using its funds, the plaintiff cannot pay the registration fee. Absent this fee, initiating proceedings in the arbitration tribunal chosen by the parties is impossible. As a result, the agreed-upon arbitration clause creates a preferential position for the defendant, whereas the plaintiff, due to the active sanctions regime, is deprived of the ability to defend its violated rights in the designated arbitration institution.[28]

Navigating Sanctions-Related Disputes in Foreign Jurisdictions

Filing lawsuits in Russian courts pursuant to Articles 248.1 and 248.2 of the APC RF may trigger retaliatory actions from foreign counterparties. In many instances, foreign counterparties seek anti-suit injunctions within their home jurisdictions or in third countries. For example, English courts may enjoin a Russian party from transferring a dispute to Russian jurisdiction if the parties have agreed to an arbitration clause and selected English law as the governing law of the contract.

For instance, the Supreme Court of the United Kingdom dismissed an appeal by RusChemAlliance LLC ("RusChem") regarding a lawsuit against the German bank UniCredit Bank GmbH ("UniCredit").

In 2021, RusChem entered into construction contracts with two German contractors to build liquefied natural gas production and gas processing plants in Russia. The total contract value was approximately 10 billion euros, of which 2 billion euros were paid as an advance. The contractors' obligations were partially secured by on-demand bonds issued by UniCredit: four performance bonds and three advance payment bonds. Each guarantee was governed by English law and contained an arbitration clause stipulating dispute resolution at the International Chamber of Commerce (ICC) arbitration seated in Paris. After the contractors invoked EU sanctions to declare their inability to perform the contracts and return the advance payments, RusChem demanded payment under the guarantees. However, UniCredit refused to pay, citing Article 11 of Regulation (EU) No 833/2014. On August 5, 2023, RusChem filed a lawsuit against UniCredit in the Arbitration Court of the City of St. Petersburg and the Leningrad Region to recover 448 million euros under the guarantees, grounding the Russian court's jurisdiction on Article 248.1 of the APC RF.[29] In response, UniCredit petitioned the English court, demanding an injunction to prohibit RusChem from litigating in Russia, asserting that under the contract, disputes were mandated to be resolved via arbitration in Paris.

Dismissing RusChem's appeal, the Supreme Court of the United Kingdom noted the following:

  • the guarantees, including the arbitration agreements contained within them, are governed by English law;
  • disputes are subject to resolution via ICC arbitration with the seat of arbitration in Paris;
  • the Russian party attempted to circumvent these terms by exploiting new Russian legislation (Article 248.1 of the APC RF).
  • the English court has jurisdiction over UniCredit's claims; consequently, the anti-suit injunction order issued by the Court of Appeal of England and Wales on January 29, 2024, was upheld (notably, the High Court of first instance had previously ruled that the English court lacked jurisdiction; the Supreme Court of the United Kingdom resolved solely the issue of the English court's jurisdiction).[30]

Concurrently, in retaliation to the issuance of the English anti-suit injunction, RusChem appealed to the Russian court, which ordered UniCredit to terminate the proceedings in England. By an Order of the Arbitration Court of the City of St. Petersburg and the Leningrad Region dated December 28, 2024, in case No. A56-90977/2024, UniCredit was enjoined from:

  • initiating proceedings against RusChem in the International Court of Arbitration of the International Chamber of Commerce arising from and in connection with the guarantees;
  • continuing any proceedings against RusChem in the state courts of Great Britain regarding disputes arising from and in connection with the guarantees in violation of the exclusive jurisdiction of the Russian courts, including the proceedings in the High Court of Justice of England and Wales (Case No. CA-2023-001933) under UniCredit's claim seeking to enjoin RusChem from continuing proceedings in the courts of Russia;
  • initiating new arbitral and judicial proceedings against RusChem outside the Russian Federation, except for proceedings in competent Russian courts, in violation of the exclusive jurisdiction of the Russian courts over disputes arising from and in connection with the guarantees, including any proceedings seeking anti-suit injunctions against RusChem in any state courts or arbitrations, other than Russian courts;
  • obtaining and enforcing in any state any arbitral awards or any other judicial decisions against RusChem arising from and in connection with the Guarantees, except for judgments of Russian courts, obtained in violation of the exclusive jurisdiction of the Russian courts.

Additionally, UniCredit was mandated to take all measures within its control (including filing an application for annulment and other steps) within two weeks from the date the court order entered into legal force to vacate the order of the Court of Appeal of England and Wales dated January 29, 2024, in case No. CA-2023-001933. Furthermore, the court awarded a judicial penalty of 250 million euros in rubles at the Bank of Russia exchange rate on the date of payment to be recovered from UniCredit in favor of RusChem in the event UniCredit violates any of the specified injunctions.[31]

On February 11, 2025, following a petition from UniCredit itself, the Court of Appeal of England and Wales modified its order from January 29, 2024, vacating the injunctive portion of the order; the findings concerning the English court's jurisdiction, which were supported by the Supreme Court of the United Kingdom, remained intact. The Court reasoned that "it would be unfair and wrong to force UniCredit to run the risk of huge penalties in Russia, which might be avoided if the Court of Appeal order is discharged or varied".[32] Parallel proceedings involving RusChem and Deutsche Bank AG (where the High Court permitted the bank to withdraw its claim and vacated the previously granted interim anti-suit injunction) and Commerzbank AG progressed along a similar trajectory. It is noteworthy that the Court of Appeal explicitly referenced the European Union's ban on recognizing and enforcing judgments rendered pursuant to Article 248 of the APC RF, indicating its inapplicability to the United Kingdom.

On June 24, 2024, as part of its 14th sanctions package, the European Union imposed measures against Russian plaintiffs who filed claims in Russian courts against EU defendants on the basis of Articles 248.1 and 248.2 of the APC RF (Council Decision (CFSP) 2024/1744 and Council Regulation (EU) 2024/1745, which amended Decision 2014/512/CFSP and Regulation (EU) No 833/2014, respectively).[33]

The EU introduced significant restrictive measures targeting Russian individuals, companies, and authorities who have brought or will bring claims under these articles. For example, EU entities are prohibited from directly or indirectly engaging in any transactions with such plaintiffs if they are listed in the relevant annex to the regulation (Article 5ab of Regulation (EU) No 833/2014), except in the following cases:

  • when the claim does not directly or indirectly concern contracts covered by the European sanctions regime (specifically, Council Decision 2024/1744, Decision 2014/145/CFSP, Regulations 833/2014 or 269/2014). For instance, if the plaintiff utilized sanctions imposed by the US, the UK, or other restrictions that do not fall under the EU sanctions regime to justify Russian jurisdiction;
  • when such transactions are necessary for purchasing, importing, or transporting pharmaceutical, medical, agricultural, or food products permitted by EU decisions and regulations;
  • when such transactions are strictly necessary to ensure access to judicial, administrative, or arbitral proceedings in EU member states, or to recognize or enforce a court judgment or arbitral award rendered in an EU member state;
  • when transactions with the plaintiff are strictly necessary for EU entities to recover damages related to contracts covered by the respective European sanctions regime or in connection with the imposition of temporary administration over the assets of EU entities in Russia.

EU entities possess the right to apply to the competent court of an EU member state seeking damages caused to them by the filing of claims in the courts of third countries (including Russian courts based on Articles 248.1 and 248.2 of the APC RF) in connection with contracts and transactions affected by the EU sanctions regime (Article 11a of Regulation (EU) No 833/2014; a corresponding provision is incorporated into Regulation (EU) No 269/2014). A separate basis is provided to recover damages caused by the imposition of temporary administration in Russia over the assets of EU entities (Article 11b of Regulation (EU) No 833/2014). This right is available if Russian entities violate the European sanctions regime and the EU entity lacks effective access to legal remedies in the relevant jurisdiction. Consequently, if an EU entity incurs damages (including legal expenses) due to lawsuits filed in third countries relating to contracts covered by the respective European sanctions regime, the European defendant can sue in the competent court of the EU state to recover the funds obtained by the Russian plaintiff. It is explicitly stipulated that judicial and arbitral awards holding these countries liable for such damages recovery, including those obtained through commercial arbitration, will not be recognized or enforced in EU countries.[34]

The EU decision dictates that the right to recover damages arises only if the EU entity lacks effective access to legal remedies in the relevant jurisdiction. From a practical perspective, EU entities will likely be required to furnish evidence demonstrating their lack of access to legal protection in Russia. It should also be emphasized that the regulation does not outline a procedure for adjudicating such claims in the courts of EU states, nor does it specify the exact court (in terms of territorial and subject-matter jurisdiction) where the claim for damages must be filed. Under these circumstances, the procedure will be governed by the national procedural rules of the EU member states.[35]

The retaliatory measures by the EU did not cease there. On December 16, 2024, through Council Regulation (EU) 2024/3192 (the 15th sanctions package), Regulation (EU) No 833/2014 was supplemented with Article 11c, stipulating that no decision to grant an injunction, an order, a safeguard, a judgment, or any other court decision rendered on the basis of or derived from Article 248 of the Arbitration Procedure Code of the Russian Federation or equivalent Russian legislation shall be recognized or rendered enforceable or executed in a Member State.[36] The Court of Appeal of England and Wales referenced this exact provision in the UniCredit case, noting its inapplicability to the United Kingdom.

On April 23, 2026, as part of the 20th sanctions package, Council Regulation (EU) 2026/506 added Article 11ca to Regulation (EU) No 833/2014, granting the affected EU entity the right to demand from a competent court of an EU Member State a judicial act affirming the validity of the prorogation or arbitration clause and compelling the Russian party to terminate the proceedings in the Russian court, along with the potential imposition of monetary penalties for non-compliance with such an act, commensurate with the potential losses of the EU entity. The same regulation expanded the jurisdiction of the "forum of necessity" (forum necessitatis, Article 11d) and introduced Article 5aj; concurrently, Council Regulation (EU) 2026/511 added Article 5c to Regulation (EU) No 269/2014, permitting the unblocking of frozen funds to cover awarded arbitration costs.[37]

For a comprehensive overview, the 18th sanctions package should also be mentioned. Council Regulation (EU) 2025/1494 dated July 18, 2025, supplemented Regulation (EU) No 833/2014 with provisions restricting designated Russian entities' ability to initiate and conduct investment treaty arbitrations (investor-state dispute settlement) outside the EU in connection with sanctions measures and mandating EU Member States to object to the recognition and enforcement of awards rendered in such disputes; the jurisdiction of the "forum of necessity" (Article 11d) was extended to these claims as well. These measures do not directly target Articles 248.1 and 248.2 of the APC RF, but they cultivate a broader landscape of the European Union rejecting the outcomes of proceedings initiated by sanctioned entities outside the EU.[38]

Consequently, by mid-2026, the jurisdictional conflict escalated into a phase of reciprocal anti-suit injunctions: both Russian arbitration courts (Article 248.2 of the APC RF) and the courts of EU Member States (Article 11ca of Regulation (EU) No 833/2014) possess the authority to enjoin proceedings in a foreign jurisdiction and impose monetary penalties for violating such injunctions. For a Russian entity contemplating invoking Articles 248.1 and 248.2 of the APC RF, this translates into the necessity to preemptively assess the risk of being listed in the annex to the regulation (transaction ban), the risk of counterclaims for damages, and the risk that the obtained Russian judicial act will be denied recognition and enforcement within the EU.

Strategic Considerations Prior to Invoking Articles 248.1 and 248.2 of the Russian Arbitration Code

The framework established by Articles 248.1 and 248.2 of the APC RF offers the Russian party a powerful procedural mechanism; however, its implementation entails specific risks that warrant preemptive evaluation – especially for entities engaged in cross-border operations and possessing assets or commercial interests abroad. The primary factors necessitating assessment are detailed below.

The Risk of Inclusion in the Sanctions Lists of the European Union (Transaction Ban). A Russian entity’s recourse to a Russian court under Articles 248.1 and 248.2 of the Russian Arbitration Code may trigger its inclusion by a Council of the EU decision into the corresponding annex of Regulation (EU) No 833/2014 (Annex XLIII), subjecting it to a transaction ban by EU entities (Article 5ab of the regulation, introduced in the 14th sanctions package). Concurrently, as indicated by the Council of the EU, the application of corresponding measures is unaffected by the specific decision the Russian court renders on the Russian party's application. Prior to filing an application, it is advisable to assess whether the applicant maintains significant business ties with EU counterparties, the severance of which would inflict material harm.[39]

The Risk of Counterclaims for Damages in a Court of an EU Member State. An EU entity that sustains damages (including legal expenses) resulting from proceedings initiated by the Russian party under Articles 248.1 and 248.2 of the Russian Arbitration Code concerning contracts affected by the EU sanctions regime retains the right to recover such damages in a competent court of an EU Member State (Articles 11a and 11b of Regulation (EU) No 833/2014), including through leveraging the jurisdiction of the "forum of necessity" (forum necessitatis, Article 11d). The probability must be considered that amounts awarded by a Russian court, including judicial penalties (Part 10 of Article 248.2 of the APC RF), will be reciprocally recovered from the applicant through its assets located in the European jurisdiction.[40]

The Impossibility of Recognizing and Enforcing a Russian Judicial Act within the EU. A judicial act rendered on the basis of Article 248 of the Russian Arbitration Code (encompassing anti-suit injunctions and awarded judicial penalties) is not subject to recognition, execution, or enforcement in EU Member States (Article 11c of Regulation (EU) No 833/2014). As a result, absent defendant assets in Russia, the obtained judicial act may prove unenforceable, thus constraining the mechanism's efficacy strictly to the boundaries of the Russian and potentially allied jurisdictions.[41]

The Risk of Reciprocal Anti-Suit Injunctions and Monetary Penalties Imposed by EU Courts. Effective April 23, 2026, an EU entity is empowered to obtain from a court of an EU Member State a judicial act validating the prorogation or arbitration clause and compelling the Russian party to terminate proceedings in a Russian court, paired with proportional monetary penalties for non-compliance (Article 11ca of Regulation (EU) No 833/2014). Jurisdictional conflicts are poised to morph into a dynamic of reciprocal injunctions and penalties, driving up costs and legal ambiguity for all parties; the anticipated retaliatory tactics of the counterparty must be forecasted preemptively.[42]

The Availability of Defendant Assets within the Territory of the Russian Federation. The tangible utility of both the primary judgment and the awarded judicial penalty (Part 10 of Article 248.2 of the APC RF) hinges entirely upon the existence of defendant assets within the Russian Federation subject to foreclosure. Before initiating proceedings, the composition and location of the defendant's assets must be evaluated: if none exist in Russia, the judicial act may serve predominantly a deterrent rather than a restorative function.

The Impact on Future Disputes and the Recognition of Russian Judgments in Third Countries. The recognition and enforcement of a Russian judicial act in third-party nations is dictated by the laws of the respective jurisdiction, the presence of an international treaty, and the principle of reciprocity; without a treaty, enforcement may be arduous or unachievable. Moreover, executing the mechanism of Articles 248.1 and 248.2 of the Russian Arbitration Code in a specific dispute does not inherently predetermine the assessment of the arbitration (prorogation) clause's enforceability regarding other, including future, disputes between the parties, which is evaluated against the factual matrix of each dispute. The defense strategy should be architected accounting for the entirety of the parties' legal relations.

The Timing Factor and the Preventive Nature of Injunctions. The injunction provided by Article 248.2 of the Russian Arbitration Code is rendered practically devoid of utility if the foreign proceeding concludes prior to the review of the application (see the outcome of case No. A60-36897/2020). Concurrently, notifying a foreign entity located outside the Russian Federation can extend the case review timeline by the period established by the legal assistance treaty, or without such a treaty – by up to a year (Part 3 of Article 253 of the APC RF). Before submitting an application, it is advisable to benchmark the procedural schedule of the foreign proceeding against notification timelines and to verify whether the counterparty possesses an authorized representative, branch, or representative office in the Russian Federation, which enables service via standard procedures.[43]

The preceding list is not exhaustive: the specific spectrum of risks and mitigation measures hinges upon the factual circumstances of the dispute, the composition of the parties, the content of contractual terms, and the asset architecture, as well as the contemporary state of sanctions regulations, which must be verified at the time procedural actions are executed.

Initiating claims against foreign entities from unfriendly states in Russia was historically associated with legal risks for Russian parties. However, the advent of Articles 248.1 and 248.2 of the APC RF and the filing of claims based on them amplify the legal exposure, primarily for Russian entities engaged in business intersecting with unfriendly states. An excessively broad application of the discussed norms breeds uncertainty for foreign counterparties, complicating contractual relations and provoking the imposition of stringent conditions on their interactions with Russian parties (including the demand for additional collateral to secure obligations). In these circumstances, the option to transfer a dispute to international arbitration serves as an essential safeguard for protecting their rights. Simultaneously, the adverse impacts reverberate back onto Russian counterparties, triggering a substantial escalation in their transaction costs.

__________________________

References

  1. From the Broad Application of the "Lugovoy Law" to the Bankruptcy of Foreigners: How Sanctions Have Impacted Disputes. June 10, 2026. "PRAVO.RU" Website. URL: https://pravo.ru/story/263923/.
  2. Part 4 of Article 3 of the APC RF; Rulings of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated December 9, 2021, No. 309-ES21-6955(1-3) in case No. A60-36897/2020.
  3. Thematic Review of the Supreme Court of the Russian Federation No. 8/2026, On the Application by Arbitration Courts of Legislation on Special Economic Measures Provided to Protect the National Interests of the Russian Federation (approved by the Resolution of the Presidium of the Supreme Court of the Russian Federation dated June 17, 2026, No. 11A/2026), Item 17.
  4. Item 3 of Article II of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, June 10, 1958); Item 5 of Part 1 of Article 148 of the APC RF. The quote is provided according to the Russian text of the Convention and is subject to verification against the official publication.
  5. Resolution of the Arbitration Court of the Moscow District dated July 29, 2025, No. F05-8539/25 in case No. A40-221290/2023.
  6. Part 3 of Article 253 of the APC RF; Items 28 and 29 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2017, No. 23, On the Consideration by Arbitration Courts of Cases Involving Economic Disputes Arising from Relationships Complicated by a Foreign Element.
  7. Items 32 and 37 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2017, No. 23.
  8. Thematic Review of the Supreme Court of the Russian Federation No. 8/2026, Item 21.
  9. Ruling of the Arbitration Court of the City of St. Petersburg and the Leningrad Region dated March 15, 2024, in case No. A56-16212/2024.
  10. Ruling of the Constitutional Court of the Russian Federation dated April 29, 2025, No. 999-O, On Refusing to Accept for Consideration the Complaint of the Company "OWH SE i.L." Regarding the Violation of Its Constitutional Rights by Articles 248.1 and 248.2 of the Arbitration Procedure Code of the Russian Federation.
  11. Thematic Review of the Supreme Court of the Russian Federation No. 8/2026, On the Application by Arbitration Courts of Legislation on Special Economic Measures Provided to Protect the National Interests of the Russian Federation (approved by the Resolution of the Presidium of the Supreme Court of the Russian Federation dated June 17, 2026, No. 11A/2026), Items 15–21.
  12. A. Pashkova, "The Mechanism of Articles 248.1 and 248.2 of the APC RF as a Means of Protecting the Russian Party in Arbitration Disputes Under Sanctions Restrictions", Journal "Law and State: Theory and Practice", 2024, No. 8(236).
  13. The formulation is cited from the text of the Thematic Review of the Supreme Court of the Russian Federation No. 8/2026 (Items 18, 21). The position was originally formulated in the Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated December 9, 2021, No. 309-ES21-6955(1-3) in case No. A60-36897/2020.
  14. Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated December 9, 2021, No. 309-ES21-6955(1-3) in case No. A60-36897/2020.
  15. Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated December 9, 2021, No. 309-ES21-6955(1-3) in case No. A60-36897/2020. The grounds for refusal are outlined according to the annotation of the official publication of the ruling (PRIME feed, GARANT) and reports from professional publications; subject to verification against the text of the ruling.
  16. Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated October 8, 2025, No. 305-ES24-22418 in case No. A40-194447/2023.
  17. Resolution of the Arbitration Court of the Far Eastern District dated December 26, 2022, in case No. A73-15265/2022.
  18. L. Galperin, "Jurisdictional Conflicts: Procedural Mechanisms Available to Russian Courts", Commentary on the amendments introduced to the APC RF by Federal Law No. 171-FZ dated June 8, 2020, Journal "Bulletin of Economic Justice of the Russian Federation", 2021, No. 1.
  19. Item 16 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated December 10, 2019, No. 53, On the Performance by the Courts of the Russian Federation of the Functions of Assistance and Control in Relation to Arbitral Proceedings and International Commercial Arbitration; Item 15 of the Thematic Review of the Supreme Court of the Russian Federation No. 8/2026.
  20. Resolution of the Arbitration Court of the East Siberian District dated July 19, 2023, in case No. A19-10204/2022.
  21. Ruling of the Arbitration Court of the Samara Region dated August 24, 2022, in case No. A55-24707/2022.
  22. Ruling of the Arbitration Court of the City of Moscow dated March 17, 2025, in case No. A40-243946/2024.
  23. The LCIA procures a comprehensive, LCIA specific, general licence regarding the Belarus and Russia (Sanctions) (EU Exit) Regulations 2019. URL: https://www.lcia.org/News/lcia-procuresa-comprehensive-lcia-specific-general-licence-re.aspx.
  24. OFSI General licence INT/2022/1552576 Publication notice. URL: https://assets.publishing.service.gov.uk/media/67e6b7b64a226ab6c41b2043/LCIA_Costs_GL_-INT-2022-1552576-PN-_28_March_2025.pdf.
  25. OFSI General licence INT/2025/5787748 Publication notice. URL: https://assets.publishing.service.gov.uk/media/67e6b62e085277e9961b203c/Arbitration_Costs-INT-2025-5787748-PN-28_March_2025.pdf.
  26. Resolution of the Thirteenth Arbitration Appellate Court dated December 28, 2024, in case No. A56-39502/2024.
  27. Resolution of the Arbitration Court of the North-Western District dated March 23, 2022, in case No. A56-57238/2020.
  28. UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, paragraphs 2, 5, 6. The claim amount filed by RusChem in the Russian court, as indicated in the judgment, is 448 million euros; the aggregate nominal value of the seven guarantees is estimated in open sources at approximately 420 million euros.
  29. UniCredit Bank GmbH v. RusChemAlliance LLC [2024] UKSC 30 (Order of the Supreme Court of the United Kingdom dated April 23, 2024; reasoning issued on September 18, 2024).
  30. Resolution of the Arbitration Court of the North-Western District dated April 4, 2025, in case No. A56-90977/2024.
  31. UniCredit Bank GmbH v RusChemAlliance LLC [2025] EWCA Civ 99 (Judgment dated February 11, 2025, Case No. CA-2023-001933), paragraphs 37, 43(iv). The quote is provided in an unofficial translation.
  32. The EU Has Prohibited Transactions with Firms Utilizing the Anti-Suit Mechanism. June 26, 2024. "PRAVO.RU" Website. URL: https://pravo.ru/news/253752/.
  33. The Battle of Jurisdictions: The EU's Response to the Lugovoy Law. June 24, 2024. "Melling, Voitishkin and Partners" Website. URL: https://mv.legal/upload/datastore/20240626%20TG.pdf .
  34. Council Regulation (EU) 2024/3192 of 16 December 2024 amending Regulation (EU) No 833/2014 (Article 1(5); new Article 11c of Regulation (EU) No 833/2014). URL: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32024R3192.
  35. Council Regulation (EU) 2026/506 and Council Regulation (EU) 2026/511 dated April 23, 2026 (20th EU sanctions package).
  36. Council Regulation (EU) No 2025/1494 dated July 18, 2025 (18th EU sanctions package), which amended Regulation (EU) No 833/2014 (including Articles 11e, 11f, and an amendment to Article 11d). Outlined based on secondary sources (client alerts from international law firms); subject to verification against the consolidated text of Regulation (EU) No 833/2014 on EUR-Lex.
  37. Council Regulation (EU) No 2024/1745 dated June 24, 2024 (14th EU sanctions package; Article 5ab and Annex XLIII to Regulation (EU) No 833/2014). See also: The EU Has Prohibited Transactions with Firms Utilizing the Anti-Suit Mechanism. June 26, 2024. "PRAVO.RU" Website.
  38. Articles 11a, 11b, and 11d of Regulation (EU) No 833/2014 (introduced (amended) by Council Regulation (EU) No 2024/1745 dated June 24, 2024).
  39. Article 11c of Regulation (EU) No 833/2014 (introduced by Council Regulation (EU) No 2024/3192 dated December 16, 2024, 15th EU sanctions package).
  40. Article 11ca of Regulation (EU) No 833/2014 (introduced by Council Regulation (EU) No 2026/506 dated April 23, 2026, 20th EU sanctions package).
  41. Part 3 of Article 253 of the APC RF; Item 32 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2017, No. 23; Ruling of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated December 9, 2021, No. 309-ES21-6955(1-3) in case No. A60-36897/2020.

 

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