Associate Kayla Auza has published an article in the Virginia Journal of International Law titled “The Bear in the Room: Addressing the Challenges that Sanctions Impose on Russian Parties in International Arbitraton.” The article discusses the procedural difficulties faced by sanctioned parties during arbitration due to the events occurring in Ukraine since February 2022.
Issues faced by Russian parties include:
- Legal counsel of choice – Some exceptions exist, but there are no guarantees that Western attorneys can or will represent sanctioned parties.
- Financial payments – Sanctions in place prevent U.S. and European banks and their foreign affiliates from handling dollar-to-euro transactions on behalf of Russian entities.
- Travel restrictions – Sanctions can potentially prevent sanctioned Russian parties, their witnesses or experts from taking part in in-person arbitration proceedings.
- Due process and the impartiality of proceedings – Reputational consequences can lead others to view the party with suspicion as a sanctioned party.
Auza offers solutions to address these issues, with the conclusion that sanctions should not be viewed as threats to international arbitration, but as a way to emphasize the procedure’s neutrality and fairness.