Abstract/Introduction

The Russian invasion of Ukraine disrupted the global energy markets, modified the energy supply chains, caused a transformation of the energy infrastructure, and upended long-term contracts and ongoing projects. The G7 countries reacted to the Russian invasion by imposing a record number of economic sanctions on Russian persons and entities. Russia responded by adopting a wide range of “countermeasures” against the persons and entities associated with “unfriendly” countries. Western energy companies were caught in the crossfire and found themselves either in active disputes or in uncomfortable predicaments.

This article provides an overview of disputes that have already emerged or may emerge in the current geopolitical context. Six categories of disputes have been identified:

1. disputes relating to imposition of “temporary management” bordering on “expropriation” of local subsidiaries of energy companies;
2. disputes over disrupted projects, with competing anti-suit/anti-arbitration injunctions;
3. disputes related to the exit from the shareholding in Russian sanctioned companies;
4. disputes under long-term supply contracts, including disputes over the change of currency;
5. disputes under long-term transportation contracts; and
6. investment claims by Ukrainian energy companies arising from the “annexation” of the Crimea and the occupation of the Eastern regions of Ukraine.

This article analyzes the impact of sanctions and “countermeasures” on substantive and procedural issues in litigation and arbitration. It also discusses jurisdictional conflicts, which take the form of competing anti-suit and anti-arbitration injunctions accompanied by severe penalties and ultimately result in competing judgments and arbitral awards with uncertain enforcement prospects.

This paper will be part of the third 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