In 2024, national court intervention in arbitration continued to intensify, particularly in relation to disputes with sanctioned Russian companies. The UK, Hong Kong, and Germany saw an increase in anti-suit injunctions and declaratory relief supporting arbitration. Simultaneously, Russian courts litigated disputes subject to foreign arbitration with unprecedented frequency, issuing anti-arbitration and anti-anti-suit injunctions. This trend is expected to continue into 2025.
By Noah Rubins KC, Nathalie Colin, Maxim Pyrkov, Leane Meyer, Florence Fruehling, and Dinara Mustafina
Russian courts show no signs of softening their anti-arbitration approach when it comes to disputes with Russian sanctioned parties. Under Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code (introduced in 2020), local courts can claim exclusive jurisdiction over disputes involving sanctioned parties if sanctions are deemed to impede access to justice in the contractual forum. Worse still, court practice is simply to assume that sanctions will prevent Russian companies from getting a fair decision in arbitration abroad. Article 248.2 enables the Russian courts to grant anti-suit and anti-arbitration injunctions prohibiting foreign partners from pursuing claims outside Russia. Such injunctions can be backed by draconian fines as much as the amount in dispute. The largest reported fine to date amounts to €14.3bn.
In 2024, Russian courts invoked Article 248 over 200 times to assume exclusive jurisdiction or issue anti-arbitration injunctions.
Court intervention is expected to remain a prominent trend in 2025. As a result, certain points should be kept in mind. When drafting arbitration agreements, it is crucial to consider that the arbitration seat typically determines the competent supervisory courts. This choice influences the availability of anti-suit and anti-enforcement relief, among other factors. While some courts will award extra-territorial relief in aid of arbitrations seated abroad, this remains largely untested.
In an era of heightened court involvement, understanding your opponent’s global assets is essential. Where the opposing party conducts business outside Russia, European counterparties may increasingly consider offensive steps to pressure parties breaching the arbitration agreement.
Noah Rubins KC
Partner
Jurisdictions where both parties hold assets continue to be a critical factor in shaping strategy. For instance, if the Russian party has no assets outside Russia and its counterparty has sufficient assets to satisfy the adverse Russian judgment issued in breach of the arbitration clause, pursuing substantive claims or commencing contempt proceedings in England in response to the Russian litigation may offer limited practical benefits. Conversely, if the Russian party conducts business outside Russia or its non-Russian counterparty has assets in jurisdictions considered to be neutral or friendly to Russia, a combination of defensive and offensive steps can mitigate the risk of international enforcement of an adverse Russian judgment.
Our team has deep expertise in navigating complex Russia-related disputes. Please get in touch if you would like to discuss strategies for your business.
