THE AUTHORS:<\/strong> On Tuesday, 24 March 2026, as part of the 2026 edition of Paris Arbitration Week,\u00a0Clyde & Co<\/a>\u00a0hosted a conference entitled \u201cSanctions and Counteractions: The New Arbitration Battlefield.\u201d The panel included Mr\u00a0Ivan Urzhumov<\/strong><\/a> (Partner at\u00a0Clyde & Co)<\/strong>\u00a0and Ms\u00a0Sophie Bayrou<\/strong><\/a>\u00a0(Counsel at\u00a0Clyde & Co<\/strong>), alongside guest speakers Prof.\u00a0R\u00e9gis Bismuth<\/strong><\/a> (Professor of Law at\u00a0Sciences Po Law School<\/strong>), Mr\u00a0Aakash Brahmachari<\/strong>\u00a0(Managing Director \u2013 Head of Intelligence & Asset Tracing at\u00a0Ankura<\/a>), and Mr\u00a0Arnaud Douville<\/strong>\u00a0(Deputy Group General Counsel & Chief Compliance Officer). The event brought together academic rigor and front-line professional experience, offering the audience a rich and layered perspective on one of the most pressing issues currently facing the arbitration community.<\/p>\n\n\n\n Ms Bayrou opened with a remark that drew laughter from the room. The H\u00f4tel de Crillon, she noted, overlooks the very square where Louis XVI and Marie Antoinette lost their heads, and the Declaration of the Rights of Man once hung from its facade. It seemed, she suggested, a fitting venue to discuss what happens when the law is used as a weapon. Particularly, in a world of rising geopolitical tensions, sanctions have truly ceased to be a matter of public law and foreign policy alone. They now permeate commercial arbitration at every level, operating as a jurisdictional weapon in parallel to the physical violence of military operations.<\/p>\n\n\n\n Since Russia\u2019s invasion of Ukraine in 2022, the EU has adopted sixteen packages of restrictive measures against Russia, affecting all stages of international arbitration – from access to counsel and funding, through procedural conduct, to the enforceability of awards and asset recovery. Multi-jurisdictional disputes have become inherently entangled with sanctions.<\/p>\n\n\n\n Yet, as Ms Bayrou noted, there is a striking contradiction at the heart of the matter: sanctions serve a dual role. They are simultaneously barriers to justice and generators of disputes, triggering claims of unlawful expropriation or breach of treaty obligations. Investment arbitration, in particular, has become a tool for counterattacking sanctions, with sanctioned states or state-linked entities using BIT claims to challenge the legality of measures taken against them.<\/p>\n\n\n\n The real question, then, is how sanctions and counteractions shape the form, substance, and legitimacy of arbitration proceedings.<\/p>\n\n\n\n Prof. Bismuth followed elegantly with an in-depth analysis of the \u201cno-claims clause\u201d (\u201cNCC\u201d) under Article 11 of EU Regulation No. 833\/2014. He explained that this provision prohibits the satisfaction of certain claims brought by Russian entities where contractual performance has been affected by sanctions. His analysis focused in particular on the case NV Reibel v. JSC VO Stankoimport<\/em>,<\/a> currently pending before the Court of Justice of the European Union.<\/p>\n\n\n\n According to the Advocate General, disputes involving sanctions remain arbitrable; however, arbitral tribunals cannot grant claims that are prohibited under EU law. This creates a disconnect between the ability to hear a case and the possibility of enforcing a favorable award. The speaker further stressed that the NCC forms part of EU public policy, requiring national courts to conduct ex officio review of arbitral awards. This development introduces tension with the traditional principle of limited judicial review in arbitration and raises concerns about inconsistent application across EU member states, even being contrary to the European public order. Additionally, the NCC has implications for the choice of arbitral seat: EU seats, subject to stricter scrutiny, risk becoming less attractive compared to non-EU seats that are free to grant compensation irrespective of sanctions regimes.<\/p>\n\n\n\n Mr Urzhumov then addressed Russian countermeasures, identifying two main categories. The first concerns measures relating to the transfer of control over foreign assets from companies operating in Russia. More specifically, the Presidential Decree No. 302 (25 April 2023) allowed the Russian state to place foreign-owned companies under \u201ctemporary administration\u201d managed by the Federal Agency for State Property Management. These measures have triggered a wave of investment arbitration proceedings from expropriated foreign investors.<\/p>\n\n\n\n The second category involves mechanisms designed to shield Russian entities from foreign sanctions, notably thanks to the \u201cLugovoy Law\u2019\u2019 (Federal Law 171-FZ, June 2020) which amended Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code: the former grants exclusive jurisdiction to Russian commercial courts over disputes involving sanctioned Russian persons or entities, irrespective of any valid arbitration clause; the latter empowers Russian courts to issue anti-suit injunctions prohibiting foreign counterparties from initiating or continuing proceedings abroad, backed by fines equal to the full amount of the claim in foreign proceedings. The largest reported fine to date is EUR fourteen point three billion (Gazprom Export v. Uniper\/Metha<\/a> <\/em>). In 2024 alone, Russian courts invoked Article 248 more than two hundred times. Mr Urzhumov highlighted the resulting jurisdictional conflicts and contradictory decisions, as well as the responses of Western courts, including counter anti-suit injunctions.<\/p>\n\n\n\n Mr Douville turned to the practical implications of sanctions for businesses, emphasizing the need for a proactive approach to contract drafting. EU Regulation 833\/2014, for instance, imposes heavy constraints by limiting transactions with designated Russian banks and forcing companies to switch to alternative currencies such as euros or yuan, while the war in Ukraine and Russia\u2019s dominant role in global nickel production have triggered supply chain disruptions and price spikes, leaving companies tied to contracts that are economically unviable rather than impossible, thereby complicating force majeure claims. In this environment, sanctions create major operational challenges across payments, supply chains, and currency management, making contractual drafting a crucial risk management tool: parties should precisely define \u201cbest efforts\u201d obligations (e.g., obtaining licences, sourcing nickel from alternative suppliers, or rerouting logistics), provide clear termination triggers linked to sanctions with appropriate notice mechanisms, adapt or suspend penalty clauses, include robust remedies for sanctions-related non-performance, and comply with any applicable reporting obligations.<\/p>\n\n\n\n The conference ultimately closed on a note of sober realism, highlighting how enforcement has become the true fault line of sanctions-affected arbitration. As Mr Brahmachari underscored, a defining paradox now prevails: creditors may be fully aware that substantial assets exist, yet remain unable to access them due to state-imposed freezes, while increasing opacity renders asset identification ever more complex. In this \u201cfrozen landscape,\u201d traditional enforcement techniques have lost much of their effectiveness, forcing practitioners to rethink their approach: success now depends on combining precise intelligence on where assets lie with the ability to establish a clear legal link between the debtor and those assets, often in the face of deliberately obscured information. Consequently, enforcement strategies have shifted toward more creative and pragmatic solutions, including targeting non-traditional or indirect assets, mapping supply chains and commercial relationships, and pursuing recovery in third jurisdictions such as India or the United Arab Emirates, where business activity continues despite sanctions. Above all, the growing reliance on human intelligence and sector-specific expertise marks a profound evolution of the field.<\/p>\n\n\n\n This article was originally published in PBA Bulletin on 17 April 2026, as part of a special edition curated by Paris Baby Arbitration (PBA)<\/a>, in collaboration with Jus Mundi <\/a>and Jus Connect<\/a>.<\/p>\n\n\n\n
Jihane Bensaid<\/strong>, Apprentice at Group RICARDO<\/strong>
M<\/strong>atias Muniz Mariategui, Bachelor of Laws Candidate at University of Paris Panth\u00e9on-Assas<\/strong><\/p>\n\n\n\n
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As part of Paris Arbitration Week 2026, Paris Baby Arbitration (PBA)<\/a><\/strong>, in collaboration with Daily Jus<\/a><\/strong> and Jus Mundi<\/a><\/strong>, brings together contributions in a special edition of PBA Bulletin<\/a>,<\/strong> sharing reflections and perspectives from across this year\u2019s events.<\/em><\/h4>\n<\/blockquote>\n\n\n\n
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