The Impact of Unilateral Sanctions onInstitutional Arbitration

Abstract

Unilateral restrictive measures (URM) are economic measures that are imposed by one sovereign state or a group of sovereign states against another state and/or its national(s), to achieve a specific foreign policy or national security objective. Commonly, URM have the express purpose of changing the policy of a foreign state by making it difficult for a specially designated national of that state (SDN) to trade with the nationals of the state which imposed URM.
        An avalanche of national URM programs introduced by some states against the nationals of other states as well as counter-URM laws negatively affect global trade, and consequently, international commercial arbitration. Accordingly, to pursue its case in an international arbitration, an SDN must master an ultimate obstacle course of legal restrictions and commercial limitations, which quite often become an insurmountable impediment to “having one’s day in court.” 
          Difficulties may arise at each stage when an SDN:

(a) instructs the service providers (legal counsel, expert witness, support services);
(b) initiates arbitration proceedings and pays arbitration fees; 
(c) constitutes an arbitral tribunal; 
(d) deals with the effect of URM on an underlying commercial contract;
(e) deals with the setting aside of an arbitral award;
(f) pursues the recognition and enforcement of the arbitral award.

Although this list is not exhaustive, the above are probably quite common for most SDNs, irrespective of which national URM program they are designated by.