Paving the Way for Justice: Arbitration and EU Sanctions Against Russia

Abstract

Prior to 2022, the European Union’s sanctions against Russia targeted a limited number of individuals and entities, and had limited effect on the day-to-day administration of arbitrations for most arbitrators and European arbitral institutions. However, the legal landscape in Europe experienced a seismic shift soon after the Russian invasion of Ukraine in February 2022. Instant termination of direct investments and international trade with Russia, coupled with the rapid expansion of the list of individuals and entities subject to sanctions, created a new legal reality with profound implications for international arbitration.
Sanctions pose a critical dilemma for the regulator of effectively reconciling the core principles of access to justice, the right to efficient remedy, and the right to legal advice with the overarching objectives of sanctions. Arbitration, the sole effective legal remedy within the realm of international trade, currently finds itself in a precarious position. On the one hand, judicial proceedings and the arbitral process are exempted from sanctions. On the other hand, as demonstrated below, the arbitral process is not entirely treated equal to judicial proceedings.