Sanctions Related Disputes

Sanctions Related Disputes

Lodging a complaint on actions (inactions) of a governmental customer and other persons in the controlling body according to the Law No 44-FZ

In the context of ever new imposed sanctions, the emergence of disputable situations becomes inevitable in the business environment. Sanctions are also imposed on specific industries, companies or citizens, who, among other things, may be the founders or heads of certain companies, which may also affect the work of a particular company as a whole. For the latest time almost all types of businesses have been affected by the sanctions, which inevitably led to disputes between the participants. The reasons for the emergence of disputes may be different, but the key issue is often the rapidly changing economic and political situation, as well as the rules of law governing this branch of activity.

As a rule, controversial issues within the framework of sanctions law arise for the following reasons:

  1. Inability to fulfill the terms of the concluded contract due to the sanctions prohibition.
  2. Inability to continue cooperation with a particular company due to its activities or its beneficiaries and management being subject to sanctions or counter-sanctions.
  3. Refusal by one of the parties to the contract to comply with its terms due to the imposition of sanctions or counter-sanctions.
  4. Penalties from partners under the contract due to non-fulfillment of the terms of the contract, etc.

It should be noted that in 2020, in connection with the restrictive measures being introduced by foreign states and organizations, two articles 248.1 and 248.2 were introduced into the Arbitration Procedural Code of the Russian Federation, which reflected the exclusive competence of arbitration courts and the possibility of a ban on initiating or continuing proceedings on disputes involving persons subject to restrictive measures, respectively. In accordance with Article 248.1 of the Arbitration Procedural Code of the Russian Federation, the exclusive competence of arbitration courts in the Russian Federation includes cases:

  1. On disputes involving persons subject to restrictive measures by a foreign state, state association and (or) union and (or) state (interstate) institution of a foreign state or state association and (or) union.
  2. On disputes of one Russian or foreign person with another Russian or foreign person, if the basis for such disputes are 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 in relation to citizens of the Russian Federation and Russian legal entities.

The norms of law introduced into the legislation do not reflect the types of sanctions and do not limit the sanctions disputes under consideration by nature, subject or grounds. Considering that the introduced rules of law are relatively new, the practice of their application is still developing and does not have a uniform approach. At the same time, this is due not only to the innovations of the legislation, but also to the ever new restrictive measures being introduced, which also lead to controversial issues between entrepreneurs. With all this, it is also important to reflect that the result of the consideration of a dispute that arose within the framework of sanctions restrictions may also depend on the decision of the competent court.

However, it should be noted that disputes that arise in business relations are not always resolved in the arbitration court of the Russian Federation, as a rule, this state of affairs is not beneficial for representatives of foreign businesses and this is due to a significant difference in the applicable law. In this regard, such emerging disputes are considered in the International Commercial Arbitration Court, which is a supranational court and considers disputes in accordance with international rules. It should be noted that the arising dispute in the ICAC at the Chamber of Commerce and Industry of the Russian Federation should be resolved only if the parties are ready to execute its decisions.

Taking into account the fact that sanctions disputes are a relatively new area not only for business, but also for practicing lawyers, if it is impossible to resolve a sanctions dispute through negotiations between participants in business legal relations, it is preferable to involve a qualified and experienced lawyer to represent and resolve the dispute, who not only will advise on issues of sanctions law, but will also become a representative in such a dispute, and will also help to competently draw up the necessary documentation. The participation of a qualified lawyer when considering a sanctions dispute allows entrepreneurs to solve the following tasks:

  1. Represents the interests of a specific entrepreneur in a sanctions dispute.
  2. Saves time to resolve the sanctions dispute.
  3. Reduces the possibility of an unfavorable outcome for a particular entrepreneur when considering a sanctions dispute.
  4. Allows the entrepreneur not to delve into all the subtleties of the sanctions law and the dispute that has arisen from the point of view of the law.
  5. The representative involved to participate in the dispute undertakes the execution of all necessary documents.

Engaging a qualified lawyer at an early stage when resolving a sanctions dispute allows you to successfully solve all of the above tasks with minimal risks and costs for business, and taking into account the introduction of more and more new sanctions, it also allows you to resolve further interaction with counterparties, already taking into account restrictive measures and with the benefit of both parties entrepreneurial activity.

Legal services

  1. Advising clients on the sanctions being imposed and the optimal resolution of the dispute that has arisen
  2. Legal support and representation in disputes related to sanctions
  3. Legal support of the company’s activities under sanctions restrictions
  4. Preparation of necessary documents for participation and settlement of disputes related to sanctions

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