Abstract

Recent geopolitical developments, including Russia’s invasion of Ukraine in 2022, have revitalised discussions on economic sanctions and their interplay with international arbitration. Sanctions regimes, although not unprecedented, have rapidly expanded, raising unique challenges at every stage of the arbitration process. This article examines how sanctions affect jurisdiction, the procedural conduct of arbitrations, and the enforcement of arbitral awards. Divergent national responses - such as Russian courts asserting exclusive jurisdiction vs pro-arbitration stances in the UK and Hong Kong - create uncertainty for parties. Substantively, sanctions may excuse contractual non-performance, but outcomes vary widely by jurisdiction and contract terms. The article offers guidance on mitigating these risks, emphasising careful contract drafting (including dedicated sanctions clauses), strategic forum selection, and proactive regulatory compliance. Ultimately, while sanctions complicate cross-border disputes, thoughtful planning can preserve the efficacy of arbitration as a neutral dispute resolution mechanism.

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