When sanctions are involved, Russian courts can now assert jurisdiction over disputes that parties intended to resolve in international arbitration. This article explains what the latest Russian Supreme Court rulings mean for Asian businesses.
Before 2020, most high-profile disputes involving Russian entities and individuals were resolved abroad. The London Court of International Arbitration served as the preeminent hub, favoured for its sophisticated arbitration framework. The International Chamber of Commerce and Stockholm Chamber of Commerce were also preferred venues. The use of Asian arbitral institutions, such as CIETAC, HKIAC and SIAC, was limited by Russian parties. But in 2020, amendments to the Russian Commercial Procedure Code conferred exclusive jurisdiction of Russian courts over disputes involving sanctioned Russian individuals and legal entities.
Under the CPC, exclusive jurisdiction of Russian Arbitrazhcourts covers disputes involving parties subject to Russia-related sanctions; or arising from such sanctions and involving Russian and/or foreign parties (even if no party is sanctioned). Such parties may apply to the Russian court for resolution of the dispute on its merits and/or an anti-suit injunction. The key provision for Asian companies is that these remedies may be used despite any arbitration agreements if sanctions make recourse to a foreign forum – whether CIETAC, HKIAC, SHIAC or SIAC – 'impossible to perform'. Russian courts interpret this broadly.
Our experts Georgy Daneliya, Natalia Kozyrenko and Igor Sokolov have prepared a comprehensive overview for the eminent legal magazine – Asia Business Law Journal.