Recent Arbitration Developments — Europe
THE AUTHOR:
Miljana Bigović, Managing Associate at DLA Piper
Introduction
The European Union’s sanctions regime has undergone a profound transformation over the past decade, evolving from a framework largely oriented toward asset freeze into a complex regulatory system with direct implications for private law, dispute resolution, and enforcement. This evolution has reached a critical inflection point with the adoption of the EU’s 20th sanctions package against Russia in April 2026, which introduces measures explicitly engaging with arbitration agreements, arbitral claims, and the enforcement of awards.
While Council Regulation (EU) No 269/2014 remains the doctrinal cornerstone of the EU’s designation-based sanctions regime, recent amendments demonstrate a deliberate policy choice to address procedural and jurisdictional vulnerabilities that have emerged in arbitration and cross-border litigation.
Arbitration is no longer treated as a neutral forum external to sanctions policy. Instead, it appears to have become a regulatory focal point through which the EU seeks to safeguard the effectiveness of restrictive measures.
Regulation 269/2014 and the Traditional Sanctions-Arbitration Interface
Regulation 269/2014 was not originally designed with arbitration in mind. The core mechanisms of this instrument, such as asset freezes and prohibitions on making funds or economic resources available to designated persons, operate at the level of performance and execution rather than dispute resolution. The Regulation preserves the validity of underlying contractual obligations while conditioning their performance on compliance with sanctions.
Historically, arbitral tribunals have treated sanctions primarily as issues of supervening illegality, force majeure, or impossibility, often deferring questions of enforceability to national courts at the post-award stage. This division reflected a traditional understanding of arbitration as insulated from public-law constraints until enforcement.
Recent EU sanctions developments, however, challenge this paradigm by introducing measures that operate upstream, affecting not only enforcement but also the admissibility of claims and, arguably, the integrity of arbitration agreements themselves.
The 20th EU Sanctions Package and the Expansion of the “No-Claims” Clause
One of the most consequential features of the 20th sanctions package is the expansion of the “no-claims” clause, which now shields EU operators from claims brought not only by designated persons, but also by entities facilitating prohibited transactions, including those established in third countries.
This development carries significant implications for arbitration. The clause operates irrespective of the chosen forum, so that even where parties have agreed to arbitrate, certain claims may be rendered legally non-actionable under EU law. It therefore functions as a potential bar to admissibility rather than a defence on the merits.
The expanded provision raises difficult questions at the intersection of jurisdiction and admissibility. While tribunals may retain jurisdiction under the arbitration agreement, claims falling within the clause may nonetheless be inadmissible as a matter of overriding EU public policy.
From a systemic perspective, the EU’s approach signals a willingness to prioritise sanctions effectiveness over the procedural autonomy of arbitration, marking a departure from the historically arbitration-friendly posture of European legal systems.
Sanctions and the Enforcement of Arbitral Awards
Perhaps the most acute tension between sanctions law and arbitration arises at the enforcement stage. European practice increasingly confirms that sanctions compliance may bar the enforcement of arbitral awards in favour of a designated entity, even where those awards are final and binding under the law of the seat.
The logic is straightforward: enforcing an award that requires payment to a sanctioned or barred entity may constitute an unlawful making available of funds or economic resources. Sanctions thus function as a public-law override, suspending enforceability without annulling the underlying obligation.
The 20th sanctions package goes further by addressing enforcement risks beyond the EU. It introduces protections allowing EU parties to resist, and in some cases seek damages for, the enforcement in third countries of judgments or awards arising from claims barred under EU sanctions law.
This represents a significant escalation. Enforcement is no longer merely constrained within the EU; it is actively contested as a matter of EU public order in transnational contexts. Arbitral awards, traditionally prized for their portability under the New York Convention, now face a fragmented enforcement landscape shaped by sanctions compliance.
Anti-Suit Injunctions and the Procedural Defence of Arbitration Agreements
Another notable innovation in the 20th sanctions package is the explicit introduction of EU anti-suit injunction mechanisms. These provisions empower the competent courts within the EU to restrain foreign proceedings initiated in breach of arbitration or exclusive jurisdiction clauses, particularly where such proceedings seek to undermine EU restrictive measures. Financial penalties may be imposed for non-compliance.
From an arbitration perspective, this development has a dual character. On one hand, it strengthens the protection of arbitration agreements against parallel proceedings in jurisdictions unsympathetic to EU sanctions. On the other, it embeds arbitration within a broader public-law enforcement strategy, subordinating party autonomy to regulatory objectives.
Moreover, the availability of financial penalties for non-compliance underscores the EU’s intention to treat sanctions-compliant arbitration agreements as instruments deserving active judicial support.
Recalibrating Arbitral Autonomy in a Sanctions-Driven Legal Order
Taken together, the adoption of the 20th package points to a more fundamental recalibration of arbitral autonomy within the European legal order. Arbitration remains a central mechanism for resolving cross-border disputes, but it no longer operates on a self-contained plane. Instead, it is increasingly shaped by the imperatives of sanctions compliance at every stage of the process.
The impact is systemic. Sanctions influence not only enforcement outcomes but also the viability of claims, the scope of relief, and the procedural framework within which arbitration operates. Matters traditionally regarded as internal to the arbitral process are increasingly assessed through the lens of EU public policy. Although tribunals may retain formal jurisdiction, the exercise of party autonomy is becoming progressively constrained by external regulatory requirements.
At the same time, the EU’s approach reflects a more assertive use of arbitration as part of its broader legal response to geopolitical conflict. Rather than merely limiting arbitration, sanctions rules are being deployed to discipline how arbitration is used, protect it from proceedings designed to undermine EU measures, and align it with regulatory objectives.
Conclusion
The EU’s 20th Russia sanctions package marks a decisive shift: international arbitration is no longer peripheral to sanctions policy but firmly embedded within it. Regulation 269/2014, once centred on asset freezes and economic measures, now operates within a framework that directly shapes arbitral claims, proceedings, and enforcement.
The implications are far-reaching. Sanctions considerations now permeate the entire arbitral lifecycle, from contract design and forum selection to admissibility, remedies, and enforcement. Arbitral autonomy endures, but within an increasingly interventionist legal order that elevates sanctions compliance to a matter of overriding public policy.
In this context, arbitration remains viable but no longer self-contained. It operates within a sanctions-driven landscape in which outcomes are shaped as much by regulatory constraints as by party agreement.
The practical consequence is clear: arbitration strategy must be fully sanctions-literate. Decisions on seat, governing law, institutional framework, and contractual drafting can no longer be made in isolation, but must be calibrated against a fragmented and evolving enforcement environment in which sanctions compliance is not incidental, but decisive.
ABOUT THE AUTHOR
Miljana Bigović is a managing associate in DLA Piper’s international arbitration practice in Sweden and a qualified attorney in Serbia. She works on complex cross border disputes spanning multiple jurisdictions and institutional rules, drawing on her experience in London and Paris. Miljana frequently lectures on international arbitration at universities across Europe and Asia and regularly speaks at international conferences. She also publishes on procedural and comparative issues in arbitration. Miljana holds LL.M. degrees from Stockholm University and the University of Novi Sad, as well as Harvard Law School.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
