Commercial Arbitration

When sanctions collide with arbitration: can a Russian judgment travel?

What happens when a party participates in an ICC arbitration for three years, files a counterclaim, and then turns to the Russian courts after an unfavourable development in parallel litigation?

The Bombay High Court has provided an interesting answer.

In Limited Liability Company EuroChem North-West-2 v Tecnimont S.p.A. (29 October 2026, 2026:BHC-OS:23757), the Court dismissed EuroChem's appeal against the refusal to freeze Tecnimont's assets in India on the basis of a Russian judgment exceeding RUB 171 billion, obtained under Article 248.1 of the Russian Arbitrazh Procedure Code – the so-called Lugovoy Law.

The underlying contracts provided for ICC arbitration seated in London. EuroChem had participated in the proceedings for approximately three years, appointed an arbitrator and brought a counterclaim. It subsequently invoked the Russian sanctions legislation to argue that the arbitration agreement had become unenforceable and that the Russian courts had exclusive jurisdiction.

The Bombay High Court was unconvinced.

Its analysis of Article 248.1 is particularly noteworthy. The imposition of restrictive measures does not, by itself, establish that an agreed foreign forum has become inaccessible. The party invoking the provision must demonstrate actual obstacles to accessing justice.

Equally interesting is the Court's treatment of Sections 13 and 14 of the Indian Code of Civil Procedure. The statutory presumption that a foreign judgment was delivered by a court of competent jurisdiction is rebuttable, and may be displaced even at the interim stage. A court considering interim relief need not wait until trial to examine whether the foreign judgment is capable of recognition.

The Court also considered the procedural fairness of the Russian proceedings, including the late submission of approximately 20,000 pages of documents and the refusal to grant the opposing party additional time to respond. These circumstances were sufficient to raise a serious question under the natural justice exception.

There is an important qualification: the Bombay High Court was deciding an appeal concerning interim relief, not the final recognition or enforceability of the Russian judgment in India. The underlying suit remains pending.

Still, the decision makes an important point for international arbitration practitioners: the consequences of sanctions-related attempts to circumvent arbitration agreements do not necessarily stop at the seat of arbitration. They may follow the resulting judgment into the jurisdictions where enforcement is sought.

For arbitration counsel, the enforcement strategy may therefore begin long before an award is rendered – and may have to account for judgments obtained in parallel proceedings.

The judgment is well worth reading.

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You Can't Have the Benefit Without the Burden: The UK Supreme Court on Third Parties and Arbitration Agreements

Can an Arbitration Agreement Be Unilateral? The English High Court Says Yes

An “OK 🙏” is not necessarily an agreement to arbitrate.

When Enforcement Gets Expensive: The Court of Appeal Says Enough