Revue - Les Cahiers de l'Arbitrage N°1-2023 - 36

ARTICLES - DEBATES
12. Upon the receipt of a Request for Arbitration, arbitral institutions must
perform several checks to ensure their compliance with applicable sanctions
laws. Some arbitral institutions even specifically provide for this process in their
rules. For instance, Article 24A of the LCIA Arbitration Rules (2020) states that
the LCIA " may take any action it considers appropriate to comply with any
applicable obligations relating to [trade sanctions] " and that the parties " agree to
provide the LCIA with any information and/or documents reasonably requested
by the LCIA for the purpose of compliance with laws " . 23
Section 20 of the LCIA
Notes for Parties also states that when the LCIA first writes to parties, it will
request that all parties and their representatives (irrespective of nationality)
inform the LCIA of any issues of which they are aware that " might impact the
ability of any party to pay deposits when directed or otherwise to participate
in the arbitration " . 24
Similarly, the Vienna International Arbitration Centre
(VIAC) conducts sanctions checks and compliance verifications at the outset
of proceedings against all parties irrespective of party nationality, requesting
information on the identity of all parties, related entities, and information on
ultimate beneficial ownership. 25
13. In addition to these initial standard compliance checks, many of the
arbitration institution representatives interviewed confirmed that their institution
had introduced heightened procedures for screening cases with a Russian nexus
to ensure compliance with the EU and UK sanctions regimes since 2022. 26
Several interviewed representatives pointed to the fact that fee payments are
often made by law firms on behalf of their clients, which can make it difficult
to ascertain ownership structures and associated parties without detailed further
enquiries.
14. Once such information is obtained, it must be cross-checked against the
relevant lists of listed persons. Given that both the UK and the EU have frequently
updated these lists, such checks must be applied on an ongoing basis in order to
ascertain whether a party, or an associated person to a party, becomes a listed
person at any point during the course of the arbitration. This is particularly critical
before payments are made or received, as is discussed further below. 27
potential-impact-of-the-EU-sanctions-against-Russia-on-international-arbitration-administered-by-EUbased-institutions.pdf;
ICC, Note to Parties and Arbitral Tribunals on ICC Compliance, 29 September
2017, available here: https://iccwbo.org/content/uploads/sites/3/2017/11/note-to-parties-and-arbitraltribunals-on-icc-compliance-english.pdf;
SCC, " General information for parties covered by the EU
Sanctions " , 11 March 2022, available here: https://sccarbitrationinstitute.se/sites/default/files/202211/general-information-to-listed-parties-11-march-2022.pdf;
and SCC, " Q&A on the EU sanctions
against Russia " , March 2022, available here: https://sccarbitrationinstitute.se/sites/default/files/202211/sanctions-q-and-a-march-2022.pdf.
23.
LCIA Arbitration Rules (2020), Article 24.11.
24. LCIA Notes for Parties, Section 20, para. 108.
25. VIAC, " Sanctions & Arbitration - how do the two get along? " , available here: https://www.
viac.eu/en/arbitration/content/sanctions-arbitration-how-do-the-two-get-along.
26. See also SCC, " Q&A on the EU sanctions against Russia, March 2022 " , available here:
https://sccarbitrationinstitute.se/en/resource-library/eu-sanctions.
27. See, for example, ICC, Note to Parties and Arbitral Tribunals on ICC Compliance, 29 September
2017, para. 7, available here: https://iccwbo.org/content/uploads/sites/3/2017/11/note-to-parties-andarbitral-tribunals-on-icc-compliance-english.pdf;
and VIAC, " Sanctions & Arbitration - how do the two
get along? " , available here: https://www.viac.eu/en/arbitration/content/sanctions-arbitration-how-dothe-two-get-along.
34
The
Paris Journal of International Arbitration 2023‑1

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

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