Ukraine Fallout: Russian Law May Weaken International Arbitration Framework

As it was preparing for war, Russia undermined an international pact that has managed global arbitration cases since the height of the Cold War.

With an eye toward the future, U.S. and European Union officials took care this year when imposing sanctions on Russia to leave open an avenue to resolve corporate disputes. Russia, however, is showing no interest in troubleshooting trade conflicts. Instead, the Kremlin has built a barrier that undermines an international pact that has managed global arbitration cases since the height of the Cold War.

The Russian Duma adopted legislation in 2020 amid little fanfare to protect Russian companies subject to international arbitration proceedings. The law, On Introducing Changes to the Arbitration Procedure Code of the Russian Federation (Law No: 171-FZ), creates a potentially damaging precedent for corporate conflict resolution. The threat to international corporate dealmaking has come into sharper focus as the war in Ukraine drags on…

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