Abstract

The increasing use of unilateral economic sanctions, particularly in the wake of global conflicts, has created a complex environment for international arbitration. This article critically examines this intersection between sanctions and international arbitration, focusing on the intricate and oft-ignored challenges posed by these sanctions to the rule of law. Using the sanctions imposed by the UK and EU on Russia as a case study, the article delves into the legal and practical difficulties that arise in the process of arbitration. These include issues in administration of an arbitration, jurisdictional issues, enforcement hurdles, and the broader implications for the arbitrability of disputes. The article also addresses soft considerations such as the ‘sanctions paranoia.’ The frequent amendments and ambiguous nature of sanctions regulations further complicate the process, which may have the effect of eroding the foundational principles of neutrality and fairness in arbitration. The authors also argue that the increasing extraterritorial reach of unilateral sanctions threatens to undermine the core tenets of international arbitration, calling for a nuanced approach to navigate this evolving landscape.

This paper will be part of the second TDM Special Issue on "Sanctions and International Arbitration: Impact on Substantive and Procedural Issues". More information here www.transnational-dispute-management.com/news.asp?key=1960