The Impact of Economic Sanctions on the Validity of Arbitration Agreements and Arbitrability

Research Article
Open access

The Impact of Economic Sanctions on the Validity of Arbitration Agreements and Arbitrability

Bowen Gao 1*
  • 1 Law School, Beijing Foreign Studies University, Beijing, China    
  • *corresponding author 2068650950@qq.com
LNEP Vol.96
ISSN (Print): 2753-7056
ISSN (Online): 2753-7048
ISBN (Print): 978-1-80590-123-5
ISBN (Online): 978-1-80590-124-2

Abstract

The emergence of the Russia-Ukraine conflict, therefore presents seismic movements in the global politics, leading towards economic sanctions against Russia as a prominent mechanism in the conflict and diplomatic pressure among many. The sanctions would not only restrict economic activities in and out of Russia but also draw attention to the security of international commercial norms and dispute resolution mechanisms. Justifiably, commercial economic sanctions have recently played a growing critical role in transnational trade. The enterprises that come under sanctions face the dilemma of how to fulfill the contracts and agreements while under the sanctions. This paper tries to raise and discuss the issue of the validity of the international commercial arbitration clause and the arbitrability of the disputes in the background of the economic sanction. It will study through a case analysis the disputes related to the validity of the arbitration clause and the arbitrability of disputes under sanctions. A further approach of comparison is used to look into the different stands taken by diverse authorities on these issues. The work finds that though economic sanctions prove some difficulties, the independence of an arbitration clause, as well as the arbitrability principles, still continue to get wide support. In sanction conditions, arbitration is still an effective and proper method of resolving disputes.

Keywords:

International Arbitration, Economic Sanctions, The Validity of the Arbitration Clause, Arbitrability

Gao,B. (2025). The Impact of Economic Sanctions on the Validity of Arbitration Agreements and Arbitrability. Lecture Notes in Education Psychology and Public Media,96,58-64.
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References

[1]. World Bank. GDP (current LCU) - Russian Federation | Data. Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CN?locations=RU&name_desc=true.

[2]. De Brabandere E, Holloway D. Sanctions and international arbitration. In: Research Handbook on UN Sanctions and International Law, 2017: 304-329.

[3]. Karel O, Malskyy M, Rybak I. Public policy against the backdrop of international sanctions regime. Chambers and Partners, 2021. Available at: https://chambers.com/articles/public-policy-against-the-backdrop-of-international-sanctions-regime.

[4]. Rühl G. Die Wirksamkeit von Gerichtstands- und Schiedsvereinbarungen im Lichte der Ingmar-Entscheidung des EuGH. IPRAX, 2007: 294-299.

[5]. BGH. Urteil vom 12 Mar. 1984 -- II ZR 10/83.

[6]. Council Directive 86/653/EEC of 18 Dec. 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents. Official Journal, 1986, L382: 17-21.

[7]. Szabados T. EU economic sanctions in arbitration. Journal of International Arbitration, 2018, 35(4): 444.

[8]. Wei Y. On the Application of Unilateral Economic Sanctions in International Commercial Arbitration. Chinese Yearbook of Private International Law and Comparative Law, 2022, 31(02): 270-285.

[9]. UNSC Res 883. UN Doc S/RES/883, 1993, para 8.

[10]. Burdeau G. Les embargos multilatéraux etunilatéraux et leur incidence sur l'arbitrage commercial international - Les états dans le contentieux économique international, I. Le contentieux arbitral. Revue de l'Arbitrage, 2003, 3: 753-764.

[11]. La Compagnie Nationale Air France v Libyan Arab Airlines. CanLII 35834, 2003 (Cour d'Appel du Québec).

[12]. Fincantieri Cantieri Navali Italiani SpA and OTO Melara Spa v ATF. ICC Award Nr 6719 (Interim Award), 1991. Journal du droit international, 1994.

[13]. Fincantieri Cantieri Navali Italiani SpA et OTO Melara Spa v M et Tribunal Arbitral. ATF 118 II 353, 1992.

[14]. Fincantieri-Cantieri Navali Italiani SpA v Iraq. Riv. Dell'arb 4, 1994.

[15]. Su C. On the Counter-Sanction Function of Exclusive Jurisdiction: A Study on Russia's "Countersanction" Exclusive Jurisdiction Legislation and Judicial Practice. Journal of Gansu University of Political Science and Law, 2023, (05): 95-112.

[16]. The New York Convention, Article 5.

[17]. Shanghai Financial Court. Civil Ruling No. 1 of Hu 74 Xie Wai Ren, 2021.

Cite this article

Gao,B. (2025). The Impact of Economic Sanctions on the Validity of Arbitration Agreements and Arbitrability. Lecture Notes in Education Psychology and Public Media,96,58-64.

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About volume

Volume title: Proceeding of ICGPSH 2025 Symposium: International Relations and Global Governance

ISBN：978-1-80590-123-5(Print) / 978-1-80590-124-2(Online)
Editor：Enrique Mallen, Ifa Khan
Conference website: https://www.icgpsh.org/Boston.html
Conference date: 18 May 2025
Series: Lecture Notes in Education Psychology and Public Media
Volume number: Vol.96
ISSN：2753-7048(Print) / 2753-7056(Online)

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References

[1]. World Bank. GDP (current LCU) - Russian Federation | Data. Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CN?locations=RU&name_desc=true.

[2]. De Brabandere E, Holloway D. Sanctions and international arbitration. In: Research Handbook on UN Sanctions and International Law, 2017: 304-329.

[3]. Karel O, Malskyy M, Rybak I. Public policy against the backdrop of international sanctions regime. Chambers and Partners, 2021. Available at: https://chambers.com/articles/public-policy-against-the-backdrop-of-international-sanctions-regime.

[4]. Rühl G. Die Wirksamkeit von Gerichtstands- und Schiedsvereinbarungen im Lichte der Ingmar-Entscheidung des EuGH. IPRAX, 2007: 294-299.

[5]. BGH. Urteil vom 12 Mar. 1984 -- II ZR 10/83.

[6]. Council Directive 86/653/EEC of 18 Dec. 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents. Official Journal, 1986, L382: 17-21.

[7]. Szabados T. EU economic sanctions in arbitration. Journal of International Arbitration, 2018, 35(4): 444.

[8]. Wei Y. On the Application of Unilateral Economic Sanctions in International Commercial Arbitration. Chinese Yearbook of Private International Law and Comparative Law, 2022, 31(02): 270-285.

[9]. UNSC Res 883. UN Doc S/RES/883, 1993, para 8.

[10]. Burdeau G. Les embargos multilatéraux etunilatéraux et leur incidence sur l'arbitrage commercial international - Les états dans le contentieux économique international, I. Le contentieux arbitral. Revue de l'Arbitrage, 2003, 3: 753-764.

[11]. La Compagnie Nationale Air France v Libyan Arab Airlines. CanLII 35834, 2003 (Cour d'Appel du Québec).

[12]. Fincantieri Cantieri Navali Italiani SpA and OTO Melara Spa v ATF. ICC Award Nr 6719 (Interim Award), 1991. Journal du droit international, 1994.

[13]. Fincantieri Cantieri Navali Italiani SpA et OTO Melara Spa v M et Tribunal Arbitral. ATF 118 II 353, 1992.

[14]. Fincantieri-Cantieri Navali Italiani SpA v Iraq. Riv. Dell'arb 4, 1994.

[15]. Su C. On the Counter-Sanction Function of Exclusive Jurisdiction: A Study on Russia's "Countersanction" Exclusive Jurisdiction Legislation and Judicial Practice. Journal of Gansu University of Political Science and Law, 2023, (05): 95-112.

[16]. The New York Convention, Article 5.

[17]. Shanghai Financial Court. Civil Ruling No. 1 of Hu 74 Xie Wai Ren, 2021.

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