New York Arbitration Week (NYAW) 2025

THE AUTHOR:
Kate Ekaterina Ursul, Law Clerk, Isakulov Law Group

In the panel discussion titled “Tariffs, Trade, and Arbitration: Navigating Cross-Border Disputes in a Shifting U.S. Regulatory Landscape” hosted by JAMS during New York Arbitration Week (“NYAW”) 2025, the Brazil Branch of Ciarb (The Chartered Institute of Arbitrators) convened leading practitioners from the United States, Asia, Europe, and Latin America to examine recent shifts in trade policies and their projected effects on arbitration disputes in the coming years. These reforms have disrupted the established foundations of the global trading system, creating a volatile environment poised to reshape the landscape of international arbitration.

The event featured a roundtable discussion moderated by former Ambassador David Huebner, International Arbitrator at JAMS, and with the participation of legal professionals serving in diverse roles across multiple jurisdictions, including:

Ms. Meg Utterback (Partner, King & Wood Mallesons), with extensive experience in China since 1985;
Ms. Sophie Lamb KC (Partner, Latham & Watkins, UK/Europe), who specializes in energy sector matters;
Ms. Binsy Susan (Partner, Shardul Amarchand Mangaldas);
Mr. Cesar Pereira (Partner, Justen, Pereira, Oliveira & Talamini), a WTO and CISG-focused arbitrator; and
Mr. Alberto Fortun (Partner, Cuatrecasas), with expertise in infrastructure, finance contracts, and the impact of sanctions.

The panel discussed multiple effects of tariffs and sanctions on trade, as well as the most effective mechanisms of protecting clients’ interests while addressing these fast-paced changes.

Contract Clauses Implicated

The panel began with a discussion about contracts, emphasizing how nowadays contracts have to be actively managed, not passively rubber-stamped by legal teams. Force majeure clauses must cover far more possible events than before, including sanctions, pandemics, and export bans, and they consequently require precise drafting to define triggering events and suspension periods.

The discussion touched upon different examples of the importance of force majeure clauses, including:

The MUR Shipping BV v. RTI Ltd. (UK) case. In this case, U.S. sanctions were imposed on RTI, preventing it from remitting payment in US dollars. The force majeure clause in the contract was defined as “events that cannot be overcome by reasonable endeavors.” MUR invoked the force majeure clause on the basis that it could not accept payment because RTI was unable to pay in U.S. dollars as required under the contract. Although RTI offered to make payment in euros, MUR refused to accept the alternative currency and suspended performance under the contract. Even though MUR invoked the force majeure clause, the arbitral tribunal (2020) and then the England and Wales Court of Appeal (2022) decided that the force majeure clause did not apply due to the reasonable offer from RTI that could overcome the sanctions. Later, the UK Supreme Court in 2024 changed the outcome of the decision of the tribunal finding that the party is not obligated to accept non-contractual performance, and, as a result, MUR could invoke the force majeure clause and suspend the performance.
Also, panelists noted withdrawals from joint ventures in Southeast Asia and Mexico due to the global supply chain being reorganized, as well as the nearshoring (the companies moving their products close to their home markets) and retreat from JV investment triggering multiple disputes. Since JVs are contractually designed for multiple years, when one party would like to exit JV early it results in disputes.
Currently, sanctions on Russian banks prohibit USD transactions. Many companies have invoked force majeure clauses to suspend supply without breaching contracts.

The panel then touched upon the importance of negotiation clauses which, though weakly enforced in common law, remain useful tools for structuring dialogue between parties. Even though in the theory of international arbitration the party can choose the seat of the arbitration and the procedures, in practice, sanctions can limit the ability of the arbitrators to get paid, and therefore parties have less freedom in their choices if sanctions are placed. Contracts in energy and natural resources sectors commonly include hardship and fairness clauses, and these clauses usually require renegotiation when facing severe cost shifts. Mediation is also a recommended avenue when renegotiating contractual terms.

The speakers, then, illustrated how Delaware common law now provides guidance for interpreting Material Adverse Change/Effect (“MAC/MAE”) clauses. Under Delaware law, MAC/MAE clauses allocate extraordinary, long-term, company-specific risks to the seller. A landmark decision, Akorn v. Fresenius (2018), established that a MAE must cause a lasting effect, and the impact must be material when assessed from a reasonable buyer’s long-term perspective. As a result, Fresenius could terminate its merger with Akorn. In general, Delaware courts apply a high threshold before recognizing a MAE.

Clauses invoking impossibility, impracticability, or frustration of purpose are narrowly applied, but they still influence risk allocation in supply contracts. In English law, similar doctrines are applied with nuance in limited cases. Change in law clauses can be solved with remedies such as price re-opener to termination events. Lawyers are advised to employ consistent templates for force majeure, hardship, and cost-sharing clauses to reduce litigation risk.

Sanctions, Tariffs, and Arbitration

The panel then turned to discussing the key updates on the subject of tariffs as well as the tools that a lawyer will need to navigate this situation. In today’s world of constant change, unpredictable litigation, and evolving tariffs, lawyers must equip themselves with precise strategies to safeguard client interests. Recent tariff adjustments, implemented with little or no prior notice, have disrupted global supply chains and fueled disputes. Companies now face heightened contract breaches, non-performance, or unforeseen, high costs.

Notably, the discussion emphasized that the process of enforcement is not just about picking a seat in London or Singapore, but actively managing the arbitration with local enforcement realitie. Secondary sanctions, for instance, can jeopardize contract performance even if payments in U.S. dollars or other sanctioned currencies are not involved. The panel highlighted the rising importance of compliance enforcement across multiple jurisdictions. Issues may arise if contract payments are blocked due to newly issued sanctions. Tracking internal compliance metrics closely and monitoring entities subject to sanctions are essential, not optional. Ring-fencing high-risk operations under U.S. and EU laws prevents more than 50% ownership from triggering sanction liability, isolating operations in standalone entities to limit financial and legal exposure. In evaluating enforcement, Chevron v. Ecuador demonstrates the importance of assessing local courts’ receptiveness and political environments. The Ecuadorian judgment of enforcement against Chevron failed in multiple jurisdictions, such as the USA, Canada, Brazil, and Argentina, for multiple reasons, including corruption and public policy. This case illustrates that even a multiple billion-dollar judgement is not effective if it can not be enforced. Legal teams must ensure that final judgments will be enforceable and that local courts are reliable.

Export Controls and Supply Chain Rerouting

The panel explored recent export controls to encompass hardware, software, cloud services, and high-end chips. In connection with these controls, the panel noted the rerouting of trade to China and South Asia. Initially, offshoring had moved to Thailand and Mexico due to tariff cycles, but subsequent changes in tariffs neutralized these benefits, complicating commodity trade. For example, when U.S. supply to China is restricted, companies such as Intel and Apple may reroute supply chains to countries like Vietnam, India, or Malaysia. Legal counsel must anticipate such shifts proactively, incorporating provisions for supplier changes, customs delays, and cost adjustments. Auditing supply chains and revising the definition of controlled items in contracts were recommended as key steps.

Navigating Sanctions, Tariffs, and Export Controls

The panel then discussed that in matters of sanctions, tariffs, and export controls, ex parte orders may be sought, but cultural and jurisdictional factors should be carefully evaluated. Enforcement of such orders is often limited. Court orders may be useful for urgent shipment issues, though political tensions may affect the choice of arbitration seat. Panelists emphasized that social media disclosure is increasingly relevant, particularly in emergency arbitrations. Other points provided during the panel were that, in some cases, awards were not enforced because local authorities and port officials refused to release containers. Enforcement then proceeded through local courts, highlighting the need for lawyers to devise strategies that integrate arbitration proceedings with local enforcement mechanisms. Under the New York Convention (“NY Convention”), enforceability of interim orders varies; while Article 7 of the NY Convention (“most favorable rights”) can assist, bespoke mechanisms and standby procedures should be incorporated into contracts to address urgent situations.

The panel cautioned that lawyers must monitor tariffs, sanctions, licenses, and export bans in real time. Cost-sharing arrangements can mitigate the impact of tariff increases. In light of significant tariff increases, contracts should include cost-sharing arrangements. For instance, a contract may specify that a buyer bears the cost of a 7–10% tariff increase, while increases above 20% trigger mandatory renegotiation. Lawyers should monitor 50% ownership thresholds in subsidiaries to avoid liability exposure. Templates for force majeure, change-in-law, and hardship clauses are recommended. Arbitration should involve experts in sanctions and WTO law, and mediation protocols should be prepared. Panelists observed that for corporate structures, ring-fencing, subsidiary separation, and ownership thresholds can mitigate risk for the clients. Alternative supplier clauses and detailed renegotiation mechanisms with strict timelines should be included. Arbitration seats should be neutral and supportive of interim measures.

International Trade Law Considerations

WTO proceedings continue to enforce rule-based persistence, though some bilateral deals bypass the WTO framework, raising concerns about consistency and fairness. Arbitration benefits from including WTO-experienced arbitrators and allowing amicus submissions for broader context.

In addition, under the United Nations Convention on Contracts for the International Sale of Goods (1980) (“CISG”) Article 79, exemptions exist for impediments, including hardship, based on foreseeability and unreasonableness of measures required to overcome the obstacle. However, in practice, parties often exclude the CISG, so its applicability must be confirmed before reliance.

Conclusion

The session concluded with a range of actionable advice and perspectives, making it a must‑hear for practitioners and students alike. Force majeure clauses should explicitly reference sanctions, payment blocking, and export license denials. Hardship clauses prevent enforcement when contracts become uneconomical, with thresholds such as a 15% cost increase with the increase in the tariffs of the other fees. Change-in-law clauses should require immediate notice from both parties and a joint mitigation plan. Alternative supplier clauses should designate pre-approved backup vendors. Arbitration seats with strong support for interim measures—London, Singapore, and Geneva—are recommended.

By implementing structured corporate and contractual safeguards, legal teams can:

Navigate complex global trade;
Minimize litigation risk and;
Ensure enforceability of awards across multiple jurisdictions.

The key takeaway from the session is that lawyers have to be strategic in drafting, proactive in risk monitoring, deliberate in subsidiary setup, and rigorous in ensuring enforceability.

ABOUT THE AUTHOR

Kate Ekaterina Ursul is a legal professional with experience in international arbitration, regulatory research, commercial disputes, and finance. She has worked at global law firms including White & Case, Dechert, and Kobre & Kim, and is currently a Law Clerk at Isakulov Law Group P.C. Kate also gained finance experience through Goldman Sachs’ integration program and holds an LL.M. from Georgetown Law. She has completed leading dispute-resolution training, including the Basel Winter Arbitration School, the London Summer Arbitration School, and the Young ITA Mentorship Program. She brings a multidisciplinary background in law and accounting and is fluent in English and Russian.

*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.