Russian Supreme Court allows sanctioned parties to avoid arbitration agreements with a seat in a state imposing sanctions

Dechert on Point. 2021.

Shlenchakova T., Brank L., Annacker C., Batalova M.

In June 2020, the Russian Arbitrazh Procedure Code was amended to vest exclusive competence in the Russian arbitrazh (commercial) courts over disputes involving Russian (and certain foreign) persons who are subject to foreign sanctions, irrespective of whether such persons have concluded a forum selection or arbitration agreement. If a sanctioned party has agreed to submit a dispute to an arbitral tribunal seated in a foreign jurisdiction, the Arbitrazh Courts may nonetheless have exclusive competence over the dispute if the arbitration agreement cannot be performed due to the imposition of sanctions, impeding access to justice for the sanctioned party. In the recent case Russian Supreme Court allows sanctioned parties to avoid arbitration agreements with a seat in a state imposing sanctions.

Keywords: arbitration, Anti-Russian sanctions., exclusive jurisdiction, ad hoc arbitration, complex multijurisdictional disputes