Lessons from Russia’s full-scale invasion of Ukraine for sanctions-related litigation

Abstract

In response to Russia’s full-scale invasion of Ukraine, the UK imposed sweeping sanctions on ‘designated persons’. At the time of writing, the conflict continues, many firms hold frozen funds owed to designated persons and will continue to do so for some time. Russian law permits claims to be brought in Russia despite exclusive choice of forum clauses, which gives rise to strategic challenges for international firms with operations and assets in jurisdictions that may be liable to enforcement. In recent cases before the English courts, Western firms have obtained anti-suit injunctions (ASIs) and related declarations in England, only later to have been coerced by Russian anti-ASIs (AASIs) into applying to withdraw that relief. In such cases, this has left firms with no effective legal orders to restrain designated persons from pursuing claims in Russia (although some declarations have been left in place). This paper reflects on tactical considerations for cross-border sanctions-related litigation in the context of the Russia sanctions regime. It seeks to highlight what further steps could be taken by the government to protect and uphold English antisuit and anti-enforcement injunctions when designated persons take matters into their own hands. This paper also suggests that it may be beneficial to update sanctions legislation to reduce the effectiveness of Russian AASIs. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.