Revue - Les Cahiers de l'Arbitrage N°1-2023 - 32

ARTICLES - DEBATES
Introduction
1. Russia's full-scale invasion of Ukraine in February 2022, and the resulting
breakdown of Russia's relations with the West, has profoundly impacted global
commercial and investment activity. It is hardly surprising, therefore, that the
administration of related disputes by international arbitration has felt similar
shockwaves. Amongst these, arbitral institutions have been required to navigate the
effects of fast-changing and far-reaching sanctions against Russia on the conduct
of arbitral proceedings.
2. Sanctions, of course, are not new, nor is the need for arbitral institutions
to comply with them. Restrictive measures that freeze or limit financial flows and
trade have long been employed by states (including via the EU) as an international
policy tool to exert pressure on foreign governments. States may enact measures
to give effect to sanctions regimes imposed by the UN Security Council, 1
or
may impose sanctions autonomously (indeed, Russia's status as a veto-wielding
permanent member of the UN Security Council precludes any realistic prospect of
a UN-backed sanctions regime against it). 2
Arbitral institutions have always needed
to ensure that they follow any applicable laws on sanctions, particularly when
administering payments in arbitral proceedings.
3. Doing so, however, assumed greater relevance and complexity in 2022.
Never before have such far-reaching sanctions targeted a major economy that is
so deeply intertwined with the use of international arbitration. Russian parties have
historically favoured bringing their international commercial disputes to several of
the leading European arbitral institutions, particularly the International Chamber
of Commerce's International Court of Arbitration (ICC) in Paris, the London Court
of International Arbitration (LCIA), and the Stockholm Chamber of Commerce
(SCC). 3
These institutions, therefore, must navigate sanctions regimes that are not
only extensive, but that affect, directly or otherwise, a material portion of their
1. See Chapter VII, Article 41 of the Charter of the United Nations, 1945, 1 UNTS XVI,
which authorises the Security Council to decide on measures that completely or partially interrupt
economic relations in order to maintain or restore international peace and security. There are
currently fifteen active UN sanctions regimes: the Somalia Sanctions Regime; the ISIL (Da'esh)
and Al-Qaida Sanctions Regime; the Iraq Sanctions Regime; the Democratic Republic of the
Congo (DRC) Sanctions Regime; the Sudan Sanctions Regime; the 1636 Sanctions Regime; the
Democratic People's Republic of Korea (DPRK) Sanctions Regime; the Libya Sanctions Regime;
the 1988 Sanctions Regime; the Guinea-Bissau Sanctions Regime; the Central African Republic
(CAR) Sanctions Regime; the Yemen Sanctions Regime; the South Sudan Sanctions Regime; the
Mali Sanctions Regime; and the Haiti Sanctions Regime. See UN Department of Political Affairs,
" Subsidiary Organs of the United Nations Security Council " , November 2022, available here:
https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_
factsheets_06nov22.pdf.
2. See, on a related note, United Nations Security Council draft resolution, S/2022/155
(25 February 2022), denouncing Russia's aggression in Ukraine and calling for the withdrawal of its
military forces, which was vetoed by Russia.
3. See, for example, Russian Arbitration Association, 2016 Russian Arbitration Association Survey:
The Impact of Sanctions on Commercial Arbitration, available here: https://arbitration.ru/upload/
medialibrary/e1e/2016-raa-survey-on-sanctions-and-arbitration.pdf; and Russian Arbitration Association,
2022 Russian Arbitration Association Survey: The Impact of Sanctions on Commercial Arbitration,
available here: https://arbitration.ru/upload/medialibrary/319/rwbwb3rdjvkywize5jo5e6nu12t8c6it/
RAA-2022-Study-on-sanctions_eng.pdf.
30
The Paris Journal of International Arbitration 2023‑1

https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_factsheets_06nov22.pdf https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/subsidiary_organs_factsheets_06nov22.pdf https://arbitration.ru/upload/medialibrary/e1e/2016-raa-survey-on-sanctions-and-arbitration.pdf https://arbitration.ru/upload/medialibrary/e1e/2016-raa-survey-on-sanctions-and-arbitration.pdf https://arbitration.ru/upload/medialibrary/319/rwbwb3rdjvkywize5jo5e6nu12t8c6it/RAA-2022-Study-on-sanctions_eng.pdf https://arbitration.ru/upload/medialibrary/319/rwbwb3rdjvkywize5jo5e6nu12t8c6it/RAA-2022-Study-on-sanctions_eng.pdf

Revue - Les Cahiers de l'Arbitrage N°1-2023

Table des matières de la publication Revue - Les Cahiers de l'Arbitrage N°1-2023