On 16 December 2024, the EU adopted the 15th package of sanctions against Russia. In addition to imposing the first comprehensive sanctions against Chinese parties over the war in Ukraine (and more), this latest package introduces new protective measures to further safeguard European parties from legal actions in Russia. The new measures complement those adopted by the EU as part of the previous sanctions package of June 2024 (see our previous blog post here) and include in particular the following:
- Enforcement ban against Russian anti-suit injunctions. EU Members States are prohibited from recognising or enforcing Russian court decisions, including anti-suit injunctions, issued under the Russian anti-arbitration legislation.
- Protection against penalties for non-compliance with Russian anti-suit injunctions. EU Members States are prohibited from giving effect to penalties, or from providing assistance in criminal proceedings, based on violations of Russian court decisions issued under the anti-arbitration legislation.
The New EU Protective Measures
Background
The Russian court practice concerning sanctioned Russian parties relies heavily on the anti-arbitration provisions in Article 248 of the Russian Arbitrazh (Commercial) Procedure Code (APC). The effect of this amendment to the law, adopted in 2020, is essentially twofold:
- Article 248(1) APC establishes the exclusive jurisdiction of Russian courts over disputes involving sanctioned Russian entities, where sanctions hinder access to justice. This allows Russian state courts to assume jurisdiction even if this conflicts with a valid arbitration agreement or forum selection clause. Article 248(1) is now routinely invoked by Russian companies against their erstwhile business partners in Europe, with the Russian courts simply assuming that sanctions will hinder access to justice in the contractual forum.
- Under Article 248(2) APC, Russian parties may obtain anti-suit injunctions from Russian courts to restrain foreign arbitral or court proceedings where the Russian courts have been seized or could be seized under Article 248(1). Such injunctions can be backed by draconian fines up to the amount in dispute.
With the previous 14th sanctions package, the EU sought to respond by imposing a transaction ban on Russian parties who use Article 248 APC and introducing a new compensation mechanism for affected European operators (for further details on these measures, see our previous blog post here).
Despite these measures, Russian parties have continued to turn to their domestic courts to obtain anti-suit injunctions against EU counterparties. In 2024 alone, the Russian courts assumed exclusive jurisdiction or granted anti-arbitration injunctions under Article 248 more than 200 times. For example, on 5 December 2024 the Commercial Court of St. Petersburg and Leningrad issued anti-suit injunctions against Germany’s Commerzbank, prohibiting it from pursuing an ICC claim against Gazprom affiliate RusChemAlliance, with a penalty for non-compliance of €95 million.
With the newly introduced 15th sanctions package, the EU explicitly seeks to provide further protection to EU businesses from anti-suit injunctions issued by Russian courts. To this end, the new sanctions package includes the two supplementary measures.
a) Enforcement ban against Russian anti-arbitration court decisions
The first measure is a prohibition against recognising or enforcing in the EU any decision (such as judgments and injunctions) issued on the basis of Article 248 APC or equivalent Russian legislation. This ban thus captures both:
- Russian judgments issued in breach of an arbitration agreement under Article 248(1) APC; and
- Russian anti-arbitration or anti-suit injunctions with accompanying fines under Article 248(2) APC.
The EU has also voiced its unequivocal opposition to the manner in which Russian courts issue anti-suit injunctions and fines, characterizing these actions as a “clear violation of established international principles and long-standing practices in the resolution of international business disputes” (Recital (8) of Regulation 2024/3192).
b) Protection against non-compliance with Russian anti-suit injunctions
EU operators subject to Russian anti-suit injunctions face draconian fines and criminal charges in case of non-compliance. To protect EU operators from these risks, the new sanctions package provides that no request for assistance in criminal proceedings, punishment or other sanctions based on alleged violations of Russian anti-arbitration decisions under Article 248(2) APC (or equivalent legislation) shall be recognized, given effect to, or enforced within the EU.
Takeaways
The newly introduced provisions confirm the EU’s commitment to adapting its protective measures. Their practical relevance remains to be seen, particularly since it was already highly unlikely that a court in the EU would have given effect to a Russian decision under Article 248, which would in any event run afoul of the New York Convention. The effectiveness of the new package in protecting EU parties will also depend on how these measures work in conjunction with previously introduced ones. For instance, this new instrument will not protect the assets of EU operators located outside the EU if a Russian court or courts in ‘Russia-friendly’ or ‘Russia-neutral’ states (eg China, India and the Gulf countries) enforce a penalty against such assets. In that scenario, EU companies would need to rely on the new compensation mechanism introduced in the EU’s 14th sanctions package.
The German courts have recently ventured a step further than the EU in this regard (see our previous blog post here), granting declaratory anti-suit relief in aid of arbitration to counter Russian court proceedings initiated in breach of an arbitration agreement. Other EU jurisdictions have not yet adopted a similar approach. The new sanctions package will therefore provide clarity within the EU by establishing a clear legal basis for rejecting the recognition and enforcement of such anti-arbitration decisions. This guidance will be particularly valuable for the courts of EU Member States, such as Hungary and Bulgaria, which still have bilateral agreements with Russia on the mutual recognition and enforcement of judgments.
