Russian Supreme Court says International Sanctions are Sufficient to Ignore Dispute Resolution Clause

Is the introduction of international sanctions against a person sufficient to justify a move of the agreed dispute resolution forum to Russia? This has been a hot topic for discussion since June 2020. In JSC Uraltransmash v PESA (case No. А60-36897/2020) the Supreme Court has put an end to this debate.

On 9 December 2021, the Supreme Court issued its judgment where it unequivocally held that if international sanctions are introduced against an entity, the Russian courts will have jurisdiction to hear disputes where such an entity is a party. That will be the case notwithstanding a dispute resolution clause providing for a different forum. It is not necessary for the sanctioned entity to provide any evidence that the agreed dispute resolution clause is unenforceable due to “obstacles to access to justice” caused by sanctions. The mere fact that sanctions have been imposed is deemed sufficient to create obstacles for a sanctioned entity to access to justice: therefore, the sanctioned entity can simply submit to the jurisdiction of the Russian courts…

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