Journal of International Dispute Settlement, 2024, 15, 144–171

https://doi.org/10.1093/jnlids/idad022
Advance access publication 10 November 2023
Current Developments

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International sanctions enacted against
Russia as overriding mandatory rules—on
which foot should international
arbitrators stand?
Maxime Chevalier *

ABSTRACT
Over the last decades, the role of international arbitrators has evolved from dealing with purely
private interests to promoting the rule of law worldwide and safeguarding the interests of the
international community. Following the armed conflict in Ukraine, a plurality of States has enacted
international sanctions against Russia, which are currently impacting the performance of many inter-
national contracts. This article analyses the enforcement of international sanctions by international
arbitrators as a matter of overriding mandatory public policy rules. This article also draws a new per-
spective on the subject, by analysing it from two different yet complementary approaches. First, be-
cause national courts have supervisory powers at the post-award stage, the reasoning of international
arbitrators may depend on whether such international sanctions are regarded as public policy rules
within relevant national legal orders. Secondly, because international arbitral tribunals have no fo-
rum, their decision regarding the enforcement of international sanctions will depend on the existing
legal theories of international arbitration. After comparing the different results under the territorial,
multilocal, and transnational approaches, the author advocates for the enforcement of international
sanctions against Russia as part of transnational public policy rules.

INTRODUCTION
A philosopher would probably contend that true wisdom comes to us, as international arbi-
tration practitioners, when we realize how little we consider the intrinsic bond between the
legal theories of international arbitration and the enforcement of lois de police by international
arbitrators. This holds even truer when it comes to international sanctions. Despite being an

*Maxime Chevalier, Assistant Professor in law, O.P. Jindal Global University (India); Associate lawyer at Curtis, Mallet-Prevost,
Colt & Mosle LLP; Dual-qualified lawyer in France & Mexico; LL.M. (Stockholm University). Email: mchevalier@curtis.com.
The views expressed in this article are the author’s and do not necessarily reflect those of Curtis or its clients. The author thanks
Ana Toimil, Associate at Von Wobeser y Sierra SC (Mexico), for her valuable advice on the subject, and his Research Assistant,
Aswath Srinivasan, a law student at O.P. Jindal Global University (India) for his assistance.

C The Author(s) 2023. Published by Oxford University Press. All rights reserved.
V
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 International sanctions enacted against Russia as overriding mandatory rules  145

independent and private transnational system of justice, international commercial arbitration

is not immune from political conflicts between legal orders. Since the last year, the interna-

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tional community decided to stand against Russia regarding the war in Ukraine. While the
United Nations has not imposed sanctions against Russia, due to the latter being a perma-
nent member of the Security Council, many States reacted at the regional or national level
by imposing international sanctions.
At the regional level, the European Union (EU) has adopted a large set of sanctions
against Russia. More specifically, Regulation (EU) 2022/428 of 15 March 2022 amending
Regulation (EU) 833/2014 ‘concerning restrictive measures in view of Russia’s actions desta-
bilising the situation in Ukraine’, provides for various trade restrictions against Russia, such
as the prohibition to sell, supply, transport or export certain goods or technologies, and pro-
vide certain services to Russian individuals or entities.1 Other restrictions may include a price
cap for the importation of crude oil and petroleum products from Russia2; the freezing of fi-
nancial assets belonging to targeted Russian person or entities,3 etc. Interestingly, Regulation
(EU) 833/2014 and Regulation (EU) 269/2014 explicitly prohibit the satisfaction of claims
pertaining to a contract affected by EU Sanctions:

1. No claims in connection with any contract or transaction the performance of which has
been affected, directly or indirectly, in whole or in part, by the measures imposed under
this Regulation, including claims for indemnity or any other claim of this type, such as a
claim for compensation or a claim under a guarantee, notably a claim for extension or pay-
ment of a bond, guarantee or indemnity, particularly a financial guarantee or financial in-
demnity, of whatever form, shall be satisfied.4

As a result, many international contracts pertaining to the sale of certain goods or furniture
of certain services are now prohibited by these sanctions, and no claim relating to such con-
tracts shall be satisfied. More importantly, Article 1(a)(v) of the Regulation (EU) 269/2014
explicitly targets arbitration by providing that:

‘claim’ means any claim, whether asserted by legal proceedings or not, made before or after
17 March 2014, under or in connection with a contract of transaction and includes in
particular [. . .] a claim for the recognition or enforcement, including by the procedure of
exequatur, of a judgment, an arbitration award or an equivalent decision, wherever made or
given.5 (emphasis added)

1
Council Regulation (EU) 2022/428 of 15 March 2022 amending Regulation (EU) No 833/2014 concerning restrictive
measures in view of Russia’s actions destabilizing the situation in Ukraine [2022] OJ L87.
2
Council Decision (CFSP) 2022/2369 of 3 December 2022 amending Decision 2014/512/CFSP concerning restrictive
measures in view of Russia’s actions destabilising the situation in Ukraine [2022] OJ L311I.
3
Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions under-
mining or threatening the territorial integrity, sovereignty and independence of Ukraine in its consolidated version of 14
November 2022 [2014] OJ L78.
4
art 11 of Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions desta-
bilizing the situation in Ukraine; art 11 of Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in
respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ
L229.
5
art 1(a)(v), Council Regulation (EU) No 269/2014 of March, 2014 concerning restrictive measures in respect of actions
undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine, 2014 OJ (L 78/6).
146  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

Similar sanctions against Russia have been enacted by many other States, such as the UK,6
Canada,7 Singapore,8 and the USA.9 Because of the extraterritorial reach of US sanctions, it

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is considered that these sanctions are likely to impact arbitration proceedings even when
they are neither seated in the USA nor involve US parties.10
On the contrary, many other States have refused to take a stand and have remained neu-
tral toward the war in Ukraine to preserve their diplomatic and trade relations with Russia.
For example in November 2022, Russia surpassed Saudi Arabia and Iraq to become India’s
largest supplier of oil,11 which explains why India has refused to commit to the G7 price gap
on Russian oil.12 Furthermore, China has refused to condemn Russia and has expressed criti-
cism of unilateral sanctions on multiple occasions.13 In this diplomatic conflict between the
Western world, which has enacted international sanctions to condemn the war in Ukraine,
and the Asian and Eastern worlds, which have remained neutral, international arbitrators will,
more than ever, have a role to play when adjudicating international disputes impacted by
such sanctions. Put otherwise, international sanctions currently divide the world. As a result,
for international arbitrators, to enforce, or not to enforce sanctions, that is the question.
In fact, these international sanctions are likely to affect many international contracts providing
for international commercial arbitration as a dispute resolution method.14 In most cases, interna-
tional sanctions will either affect the validity of the contract or render its performance legally im-
possible (including that of any payment obligation).15 International sanctions might be invoked
as a force majeure event allowing a party to be excused for non-performance.16 International arbi-
tration practitioners will therefore face this inevitable question: are these sanctions mandatorily
applicable to the merits of the case at hand?

6
For eg, see The Russia (Sanctions) (EU Exit) Regulation 2019, as amended by The Russia (Sanctions) (EU Exit)
(Amendment) (No 14) Regulations 2022 dated 18 July 2022 (UK).
7
Special Economic Measures (Russia) Regulations, SOR/2014-58, Special Economic Measures Act 1992, ss 4(1), 4(2),
and 4(3), as amended on 29 September 2022 (Canada).
8
The sanctions against Russian enacted in Singapore include ‘the ban on the transfer to Russia of: (a) all items in the
Military Goods List and (b) all items in the “Electronics,” “Computers,” and “Telecommunications and Information Security”
categories of the Dual-Use Goods List of the Strategic Goods (Control) Order 2021 and financial measures targeted at desig-
nated Russian banks, entities and activities in Russia, and fund-raising activities benefiting the Russian government’. See
‘Sanctions and Restrictions Against Russia in Response to its Invasion of Ukraine’ 5 March 2022, Ministry of Foreign Affairs of
Singapore <https://www.mfa.gov.sg/Newsroom/Press-Statements-Transcripts-and-Photos/2022/03/20220305-sanctions>
accessed 10 August 2023.
9
US sanctions are certainly one of the most developed arsenal of sanctions targeting Russia. The USA has adopted
‘Blocking sanctions’ prohibiting transactions with entities or individuals listed on a Specially Designated Nationals and Blocked
Persons List (SDN List) and ‘Sectoral sanctions’ which prohibit US and non-US citizens (secondary sanctions) to provide or
export of certain services or goods (see eg, Executive Order 14065, 23 February 2022 and Executive Order 13662—Sectoral
Sanctions Identifications List).
10
Tom Cornell, ‘Sanctions and Arbitration: The Impact of Sanctions on English Law-Governed Contracts and English-
Seated Arbitrations’ in Gregory R Fullelove and others (eds), International Arbitration in England: Perspectives in Times of
Change (Kluwer Law International 2022) 273.
11
Sanjeev Choudhary, ‘Russia becomes the No. 1 Oil Supplier India in October’ The Economic Times (2 November 2022)
<https://economictimes.indiatimes.com/news/india/russia-becomes-the-no-1-oil-supplier-for-india-in-october/articleshow/
95240329.cms?from=mdr> accessed 3 January 2022.
12
ANI, ‘Russia Welcomes India’s Decision to Not Support G7’s Price Cap on Russian Oil’ (Asian News International,
11 December, 2022) <https://www.aninews.in/news/world/others/russia-welcomes-indias-decision-to-not-support-g7s-price-
cap-on-russian-oil20221211054634/> accessed 3 January 2022).
13
Reuters, ‘China will not Join Sanctions on Russia, Banking Regulator Says’ (Reuters, 2 March 2022) <https://www.reu
ters.com/markets/europe/china-banking-regulator-sees-limited-impact-sanctions-russia-2022-03-02/> accessed 3 January
2022.
14
For a global analysis of the legal effect of sanctions under contract law in case of non-performance, including illegality
clauses, force majeure, and frustration, see Milo Molfa, M Lus and A Grant, ‘The Effects of Sanctions on International
Arbitration’ (2021) XXXV Dir Com Intl 393.
15
For a detailed analysis of the impact of international sanctions on contractual relations, see Andrey Kotelnikov,
‘Contracts Affected by Economic Sanctions: Russian and International Perspectives’ (2020) TDM 1 Eurasia—CIS, 13, 23.
16
For example, in the Sensor case decided in 1982 in the Netherlands, a Dutch court considered that a US embargo on the
export of Oil and Gas equipment to the URSS could not legally bind a European company due to the lack of jurisdiction of the
USA to impose extraterritorial sanctions. The force majeure claim was therefore rejected by the Court (Compagnie Europeenne
Des Petroles SA v Sensor Nederland BV, September 17, 1982, 22 International Legal Materials 66 [1983]).
 International sanctions enacted against Russia as overriding mandatory rules  147

This article will attempt to put into perspective whether international sanctions enacted
by a plurality of legal orders should be enforced by international arbitral tribunals when adju-

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dicating the merits of a given case concerned by such sanctions. For example, if commercial
parties conclude or seek to enforce a contract in violation of international trade sanctions
enacted by country A, should an international arbitral tribunal sitting in country B consider
such sanctions when deciding on the merits of the dispute? Should the Tribunal ignore the
sanctions and give effect to the contract, or protect the interests of country A by upholding
such sanctions?
When assessing the applicability of international sanctions to a given case, international ar-
bitral tribunals will usually take into account various sets of laws including—the lex causae,
the lex arbitri, the laws of the award enforcement forums, and more generally, any set of laws
connected to the dispute.17 Nowadays, it is accepted that arbitrators should not solely con-
sider the law chosen by the parties to govern their contract, but might also have to take into
account other laws.18 While the law chosen by the parties will necessarily play a role regard-
ing the applicability of international sanctions, the author contends that taking the law appli-
cable to the merits of the case (the so-called lex causae) as the cardinal point of the tribunal’s
decision is a mistake. Since the parties are free to choose the law governing their legal rela-
tion, it would be very easy for them to bypass and contravene the fundamental values of a
given legal order by subjecting their legal relationship to the substantive law of a neutral
State.19 Similarly, because arbitral tribunals enjoy great freedom on conflict of laws methods
in the absence of parties’ agreement on the matter,20 they could deny the legal effect of sanc-
tions by choosing to apply the law of a sanction-neutral State.21 Parties could also, in con-
tract, exclude the applicability of any international sanction to their legal relationship.
Conversely, focusing the analysis depending solely on the law of the seat of arbitration (the
so-called lex arbitri) is a similar mistake because parties could easily bypass international
sanctions by choosing a sanction-neutral seat of arbitration. In the author’s opinion, the cor-
rect approach lies in the applicability of international sanctions as a matter of overriding man-
datory public policy rules.
Likewise, States have enacted conditions under which, in the interest of other legal orders,
they are ready to enforce international mandatory rules belonging to other legal systems, re-
ferred to as lois de police or public policy rules.22 P Mayer defines mandatory rules as ‘an im-
perative provision of law which must be applied in an international relationship irrespective
of the law that governs that relationship’.23 While domestic courts usually refrain from
reviewing arbitrators’ decisions on the merits of the case due to the absence de révision au

17
Steve Ngo and Steven Walker, ‘Impact and Effects of International Economic Sanctions on International Arbitration’
(2022) 88 Intl J Arb Med Disp Man 394.
18
Phillipe Fouchard and Berthold Goldman, Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer
Law International 1999) 849.
19
A relevant example can be found in the Final Award of SCC Case No 158/2011 where the arbitrator applied French
mandatory rules even if the parties had chosen Swedish law as lex causae, reasoning that ‘its [the French mandatory rules] ap-
plicability cannot be displaced by the parties’ agreement to submit the contractual relationship to Swedish law’ and that ‘it is
generally acknowledged that arbitrators have a duty to apply the overriding mandatory rules of the laws having a significant
connection to the dispute, regardless of the governing law of the relevant relationship’ (SCC Case No 158/2011, van den Berg
(ed), ICCA Yearbook Commercial Arbitration 2013 (2013) vol XXXVIII, 269–270).
20
It is important to underline that international arbitral tribunals enjoy great freedom about the conflict of law approach.
For example, art 28(2) of the UNCITRAL Model Law on International Commercial Arbitration provides that ‘failing any des-
ignation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers
applicable’.
21
Kotelnikov (n 15) 5.
22
Emmanuel Gaillard, Legal Theory of International Arbitration (Martinus Nijhoff 2010) 114; Pierre Mayer, ‘Effect of
International Public Policy in International Arbitration’ in Julian DM Lew and Loukas A Mistelis (eds), Pervasive Problems in
International Arbitration (Kluwer Law International 2006) 61.
23
Pierre Mayer, ‘Mandatory Rules of Law in International Arbitration’ (1986) 2 Arb Intl 275.
148  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

fond,24 the violation of public policy rules is an exception to the latter principle, which might
lead to the annulment or refusal to enforce arbitral awards.25

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More than providing a perspective, this article suggests a legal method to answer the fol-
lowing fundamental issue: when hearing a dispute, to what extent, under which parameters
and on which legal basis should international arbitrators apply, as a matter of overriding man-
datory rules, the various sets of international sanctions that have recently been enacted
against Russia by a plurality of legal orders? As the reader will understand, the answer will
vary according to the interaction of many factual, legal, and theoretical considerations.
First, the application of public policy rules by international arbitrators highly depends on the
Damocles sword of domestic courts, which will enforce public policy considerations at the post-
award control, either through award annulment or award enforcement proceedings. It is usually
because a given rule is a part of the public order of one or more legal orders that are relevant to
the dispute at hand that international arbitral tribunals will recognize such rule as being an over-
riding mandatory public policy rule. Thus, the first reflex consists of assessing whether domestic
courts having supervisory power over the arbitral award would consider international sanctions,
including sanctions enacted by other foreign legal orders, under their notion of public policy.
Relevant domestic courts include the national courts of the seat of arbitration (primary jurisdic-
tion) and the national courts of the various forums where the award may be presented for en-
forcement purposes (secondary jurisdiction).
Secondly, having clarity about the application of these sanctions by domestic courts as manda-
tory public policy rules is only the first part of the answer. It remains necessary to understand un-
der what conditions an international arbitral tribunal, which has no forum,26 should feel bound to
enforce the public policy rules of a given legal order. In other words, why would an international
arbitral tribunal sitting in country A, and thus subject to the primary supervisory jurisdiction of
the national courts of country A, feel bound to apply overriding mandatory rules of country B
(eg, the country where enforcement could be sought)? This practical issue hides a very theoreti-
cal debate. The answer will highly depend on the legal representation of international arbitration
embraced by the arbitral tribunal. Relying on the existing legal representations of international ar-
bitration, the author suggests a three-dimensional approach regarding the enforcement of interna-
tional sanctions by international arbitral tribunals.
Naturally, ICSID awards are excluded from the scope of the present discussion.
Indeed, ICSID awards are not seated in any national legal order and are
automatically enforced by domestic courts,27 the discussion being limited solely to their
24
For an explanation of such principle, see eg Maxime Chevalier, ‘French Wine in New Bottles: Revirement de
Jurisprudence in French Consumer Arbitration Law’ 88 (2022) Intl J Arb Med Disp Man 422; ICCA, ICCA’s Guide to the
Interpretation of the 1958 New York Convention: A Handbook for Judges (International Council for Commercial Arbitration
2011) 68–111; Jean Paul Beraudo, ‘Egregious Error of Law as Grounds for Setting Aside an Arbitral Award’ (2006) 23 J Intl
Arb 351.
25
See eg, arts 34(1)(b)(i) and 36(1)(b)(ii), UNCITRAL Model Law on International Commercial Arbitration; art
V(2)(b) New York Convention.
26
Mercedeh A da Silveira, ‘Trade Sanctions and International Sales: An Inquiry into International Arbitration and
Commercial Litigation’ (2015) 32 J Intl Arb 98 (‘the State of the seat of the arbitration is not a forum. It is the State whose ar-
bitration law (lex arbitri) most often governs the conduct of the arbitral proceedings’). For an explanation of the well-known
expression that the arbitrator ‘has no forum’, see Phillip Landolt, Modernised EC Competition Law in International Arbitration
(Kluwer Law International 2006) 128 (‘what is chiefly meant by this, in this context, is that, virtually without exception in arbi-
tration statutes, arbitrators, unlike judges, are placed under no particular obligation to apply the mandatory laws of the country
of the arbitral seat. An arbitral seat is not a forum. Accordingly, they are under no obligation to give particular regard to the
mandatory norms of the State where they are seated, and no fuller regard than to mandatory norms of other States. Unlike
judges, arbitrators are privately appointed, and have no official commission to apply the laws of the forum as the State sponsor-
ing them requires’).
27
art 54(1) of the ICSID Convention imposes on national courts an obligation to enforce ICSID awards, without any pos-
sibility to control the latter based on a violation of public policy rules (art 54(1) provides that ‘each Contracting State shall rec-
ognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award
within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may
 International sanctions enacted against Russia as overriding mandatory rules  149

execution.28 It follows that there is, thus, no interaction between ICSID arbitral tribunals
and domestic courts on the notion of public policy rules. Of course, because interna-

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tional law is the lex fori of ICSID arbitration, it is suggested that ICSID arbitrators should
enforce international public policy rules only.29 Therefore, the scope of this article will
be limited to international commercial arbitration.
The first step of the suggested legal method consists in assessing whether domestic courts
would, as supervisory jurisdictions during award annulment or award enforcement proceed-
ings, consider international sanctions enacted against Russia as overriding mandatory rules
under their respective standards of public policy (‘Enforcement of international sanctions as
mandatory public policy rules by domestic courts at the post-award scrutiny process’ sec-
tion). Since international sanctions will mostly involve Russian entities, the perspective of
Russian courts, which might still be willing to enforce annulled awards, should also be added
to the picture (‘Annulment of arbitral awards by western courts and enforcement retaliation
from Russian courts’ section). Once the comparative perspective from the domestic courts of
various legal orders is established, the second step consists in assessing the application of in-
ternational sanctions as overriding mandatory rules by international arbitral tribunals under
the existing legal theories of international arbitration depending on the weight to be given to
the position of national courts (‘Application of international sanctions by international arbi-
trators as overriding mandatory rules: a three dimensions perspective’ section).

ENFORCEMENT OF INTERNATIONAL SANCTIONS AS

MANDATORY PUBLIC POLICY RULES BY DOMESTIC COURTS AT
THE POST-AWARD SCRUTINY PROCESS
While this article aims at discussing the impact of international sanctions before international
arbitral tribunals, it is essential to have a clear perspective of the position adopted by national
courts on the subject. Indeed, as notoriously stated by Lord Justice Kerr, international arbi-
tration does not operate ‘floating in the transnational firmament, unconnected with any mu-
nicipal system of law’.30 Much on the contrary, after the award has been rendered by the
arbitral tribunal, the national courts of the seat of arbitration and the national courts of the
forums of enforcement will have a say on the annulment or enforcement of the arbitral
award, especially with regard to the public policy exception. For example, Article
34(2)(b)(ii) of the United Nations Commission on International Trade Law (UNCITRAL)
Model Law on International Commercial Arbitration (Model Law) provides that an arbitral
award may be annulled ‘if the court finds that [. . .] the award is in conflict with the public
policy of this State’. Similarly, Article V(2)(b) of the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York Convention)31 and Article 36(1)(b)(ii)
of the Model Law,32 also refer to public policy as a ground to deny recognition and
enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final
judgment of the courts of a constituent state’ without any exception based on public policy rules).
28
On the difference between ‘enforcement’ and ‘execution’ under the ICSID Convention, see generally, Ylli Dautaj and
Maxime Chevalier, ‘A Liberal Push and a Sovereign Pull: Recognition, Enforcement and Execution in the ICSID Convention’
(2022) 32 Am Rev Intl Arb 281.
29
Christophe H Schreuer, The ICSID Convention: A Commentary (2nd edn, CUP 2009) 566.
30
Lord Justice Kerr in Bank Mellat v Helleniki Techniki [1984] SA I QB 291, 301 (Eng.) rejecting the idea of international
arbitration as a transnational, independent system of justice.
31
art V(2)(b) of the New York Convention provides that ‘[r]ecognition and enforcement of an arbitral award may also be
refused if the competent authority in the country where recognition and enforcement is sought finds that [. . .] [t]he recogni-
tion or enforcement of the award would be contrary to the public policy of that country’.
32
art 36(1)(b)(ii) of the Model Law provides that ‘[r]ecognition or enforcement of an arbitral award, irrespective of the
country in which it was made, may be refused only [. . .] (b) if the court finds that [. . .] (ii) the recognition or enforcement of
the award would be contrary to the public policy of this State’.
150  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

enforcement of arbitral awards. An arbitral award violating or ignoring international sanctions

may thus be annulled or denied recognition and enforcement by national courts if they later

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consider that such international sanctions are constitutive of mandatory rules under their no-
tion of public policy. This is the main reason why the perspective from national courts is
very relevant when international arbitrators and the parties discuss the applicability of public
policy rules as overriding mandatory rules to the dispute at stake.
Interestingly, various instruments, such as the Model Law or the New York Convention,
cited above refer to the public policy of ‘this State’ (the jurisdiction where the award is being
challenged) without giving any clarity about public policy rules, such as international sanc-
tions, enacted by other, foreign, States. Indeed, the State of the seat of a given arbitration dis-
pute may have not enacted sanctions, but yet be willing to enforce sanctions enacted by
other legal orders. In this regard, when controlling arbitral awards, domestic courts have
adopted diverging views about the protection of foreign public policy rules under their con-
ception of public order. Be it a charm or a curse, international arbitration has not yet man-
aged to break free from its complexity. Some legal orders accept to protect public policy
rules enacted by other legal orders, while other legal systems only protect their own domestic
public policy rules, at the exclusion of foreign mandatory rules.
In order to contrast the various positions adopted in legal systems that conflict in many
respects, the author will compare, first, the French control of the violation of the international
public order (section 2(A)) to, secondly, the Indian control based on a purely national public
order (section 2(B)). Aiming at finding if there is consensus on the mandatory nature of in-
ternational sanctions, the author will also discuss the different positions adopted by other
jurisdictions, namely the USA, Germany, England, Canada, and Singapore (section 2(C)).

The perspective of French courts: the consideration of transnational public policy rules
when controlling the violation of the Ordre Public International
If an arbitral award is challenged before the French courts due to it being allegedly rendered
in violation of international sanctions enacted against Russia, for example by giving effect to
a transaction prohibited by such sanctions, French courts would probably consider such sanc-
tions as overriding mandatory rules that must be respected, even if they have been enacted
by legal orders others than France or the EU. Thus, an arbitral award violating international
sanctions against Russia is likely to be annulled or denied recognition and enforcement by
French courts.
To start with, the Cour de cassation has expressly empowered French judges to give effect
to foreign public policy rules, for example in terms of the embargo.33 However, when it
comes to international arbitration, it is not enough for foreign public policy rules to be recog-
nized as mandatory rules; they must be part of the French notion of international public or-
der. French courts are willing to enforce public policy rules enacted by other legal orders
provided that they fall within the French conception of the international public order. Unlike
the Model Law which refers to the public policy ‘of this State’,34 as a ground to challenge an
arbitral award, French international arbitration law has taken a more liberal stand, referring
to the violation of the ‘international public order’. Indeed, Article 1520 5 of the French
Code of Civil Procedure,35 provides as follows:

33
Cass Com, 16 March 2010, no 08-21.511.
34
See arts 34(2)(b)(ii) and 36(1)(b)(ii) of the UNCITRAL Model Law on international commercial arbitration.
35
Also applicable to the appeal against the Judicial Order granting exequatur to a foreign arbitral award, by virtue of art
1525 of the French Code of Civil Procedure.
 International sanctions enacted against Russia as overriding mandatory rules  151

The action for annulment is available only if. . .5 The recognition and enforcement of the
award is contrary to international public policy.36

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More precisely, it is the French notion of international public order that will be assessed by
French courts during post-award control proceedings,37 defined as all the rules and values
that the French legal system cannot ignore, even in international situations.38 Furthermore,
French judges will consider that the international public order has been violated only if such
violation is caractérisée (material).39
In fact, besides universal principles such as money laundering40 or corruption,41 French
courts have already accepted to enforce foreign public policy rules as part of the French no-
tion of international public order. For example, in Société MK Group v SARL Onix, the Paris
Court of Appeals considered that Laos’ public policy rules pertaining to Laos’ sovereignty
over its natural resources were part of the French notion of the international public order be-
cause these foreign public policy rules reflect rules and values which the French legal system
cannot ignore, even in an international context.42
However, the French notion of international public order does not necessarily include all
foreign public policy rules.43 Foreign public policy rules will fall under the scope of the
French notion of international public order only if certain conditions are satisfied. As a mat-
ter of fact, the Paris Court of Appeals constantly considers that:

[. . .] mere disregard of a foreign public policy law cannot in itself lead to the setting aside
of an arbitral award. It can only lead to the annulment of an award if this overriding statute
protects a value or a principle whose disregard would not be tolerated by the French public
order itself, even in an international context. It is only to this extent that foreign public pol-
icy laws can be considered to be part of French international public policy.44

Consequently, from the French perspective, the real challenge about the various sets of inter-
national sanctions enacted against Russia by other legal orders is to assess whether these
sanctions, as foreign public policy rules, can integrate within the French notion of interna-
tional public order. In the Sofregaze v Natural Gas Storage Company, when deciding whether
international sanctions enacted by the USA against Iran applied to the challenge of an arbitral
award rendered in Paris, the Paris Court of Appeals stated that:

36
art 1525 of the French Code of Civil Procedure: Le recours en annulation n’est ouvert que si :. . .5 La reconnaissance ou
l’exécution de la sentence est contraire à l’ordre public international.
37
Christophe Seraglini, ‘Le contrôle par le juge de l’absence de contrariété de la sentence à l’ordre public international : le
passé, le présent, le futur’ (2020) 2 Rev Arb 349.
38
Paris Court of Appeals, 16 May 2017, République du Congo v société Customs & Tax Consultancy, D, 2017.2054
39
French courts have recently modified the terminology of the standard of appreciation, from a ‘blatant, effective and con-
crete’ violation (caractère flagrant, effectif et concret) of the French conception of the international public order (see eg, Cass 1re
Civ, 4 June 2008, no 06-15 320; Cass 1re Civ, 11 March 2009, no 08-12 149; Cass 1re Civ, 29 June 2011, no 10-16 680) to a
‘material breach’ (violation caractérisée) (see eg, Paris Court of Appeals, 5 April 2022, no 20/03242; Cass 1re Civ, 23 March
2022, no 17-17.981). However, according to the French doctrine, this terminological modification has no impact on the stan-
dard of appreciation used by French courts (see Jeremy J Marques, Chronique d’arbitrage : la Cour de cassation crève l’abcès sur
l’ordre public international (Dalloz 2022)
40
Paris Court of Appeals, 21 February 2017, République du Kirghizistan v M Belokon.
41
Paris Court of Appeals, Securiport v Republic of Benin, 27 October 2020, no 19/04177.
42
Paris Court of Appeals, MK Group v Onix, 16 January 2018, no 15/21703.
43
On this point, see Thibault R de Boubée, ‘EUROPE: France. Breach of International Public Policy: Issues of Foreign
Overriding Mandatory Rules and Embargoes’ (2021) 2 ICC Disp Res Bull 29.
44
See eg, Paris Court of Appeals, Guinean Republic v AD Trade Belgium SPRL, 13 April 2021, no 18/09809, para 38 (trans-
lated from French). For another case of French courts requiring foreign public policy rules to contain ‘rules and values which
cannot be disregarded even in an international context’ to be considered as falling under the scope of the French international
public policy, see Paris Court of Appeals, Autorité pour l’administration des actifs de l’Etat Roumain v Arcelormittal Holdings, 6
March 2018, no 15/23711.
152  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

[a] foreign public police rule can only be considered as falling within the scope of French
international public policy insofar as it contains values and principles which cannot be dis-

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regarded even in an international context.45 (translated from French, emphasis added)

In this case, the sanctions enacted by the USA against Iran were not recognized by French
courts as part of the French notion of the international public order because ‘the unilateral
sanctions taken by the US authorities against Iran cannot be seen as an expression of interna-
tional consensus’.46 Thus, besides the notions of universal principles and values recognized
by French courts, it seems that the characterization of an international consensus might also
play a role in the acceptance of foreign international sanctions as part of the French concept
of international public order.47
In this regard, the author believes that most of the international sanctions enacted against
Russia by other legal orders due to its full-scale invasion of Ukraine would fall under the
French notion of international public order. First, these sanctions aim at protecting interna-
tional peace and security, which are constantly recognized by French courts as universal val-
ues which cannot be disregarded.48 Secondly, immediately following the beginning of the
war in Ukraine, international sanctions against Russia have been enacted by many jurisdic-
tions such as the EU, the UK, the USA, Canada, Switzerland, and Australia. Because they
have been enacted by a plurality of legal orders, these sanctions could therefore be regarded
as showing an international consensus, at least from the French perspective.49
At the regional level, it is undeniable that the sanctions enacted by the EU would fall un-
der the French conception of the international public order. The Paris Court of Appeals has
already stated, with regard to the sanctions enacted by the EU against Iran, that ‘such interna-
tional sanctions thus transposed within the EU, and thus into the French domestic legal or-
der, can be assimilated to French public policy rules’.50 Sanctions enacted by the EU could
thus immediately integrate within the French notion of international public order.51
Considering the position of the French courts, it is likely that an arbitral award violating
international sanctions against Russia, for example by giving effect to a contract targeted by
such sanctions, would be either annulled by French courts (supposing the award was
45
Paris Court of Appeals, Sofregaz v Natural Gas Storage Company, 3 June 2020, no 19/07261, para 61.
46
ibid, para 62. In a recent case where the award was challenged based on allegations of corruption when assessing the vio-
lation of the international public order the Cour de cassation also made reference to the notion of ‘international consensus’
(Cass 1re Civ, 23 March 2022, no 17-17.981, MB v République du Kirghizistan).
47
Even though there exist no formal test, a foreign norm will generally be considered by French courts as being part of the
French international public order if this norm (i) pursues a legitimate purpose and (ii) is subject to an international consensus.
See eg, Ministère Yéminite du pétrole et des minerais v société Alkor Petroo Ltd. Et autres where the Paris Court of Appeals consid-
ered Yemenite public policy rules as mandatory, reasoning that they ‘pursue a legitimate goal that is subject of international
consensus’ (Paris Court of Appeals, 21 March 2007, no 15/17.234, Rev Arb 2017, 340). In fact, as stated by a French author,
‘[t]his link established between the existence of an international consensus and the notion of international public order has sub-
sequently become a constant, repeated from decision to decision, by the Court of Appeal of Paris’ (Eric Loquin, ‘Le contrôle
de conformité de la sentence à l’ordre public international’ JD Intl ‘Clunet’ (LexisNexis, March 2023) 155).
48
For example in the Guinean Republic v AD Trade Belgium SPRL case, the Paris Court of Appeals stated that ‘embargo
measures pronounced by the European Union, insofar as they are intended to contribute to the maintenance or re-
establishment of international peace and security, fall within the French conception of international public order public order
insofar as the rules and values thus conveyed are among those whose disregard must not be tolerated by the French legal order’
(Paris Court of Appeals, 13 April 2021, no 18/09809); see also Paris Court of Appeals, Sté Armenti e aerospazio spa v
Government of the republic of Iraq Ministry of Justice, 1 February 2022, no 19/22977.
49
On the contrary, from another perspective, it could be argued that, because the countries having sanctioned Russia repre-
sent only 16 per cent of the world population, they do not express any international consensus. However, these countries or in-
ternational organizations represent the vast majority of the world’s economy in terms of GDP. On this point, see eg,
Ambassador M Green, ‘Countries that have Sanctioned Russia’ (Wilson Center, 10 May 2022) <https://www.wilsoncenter.
org/blog-post/countries-have-sanctioned-russia> accessed 18 January 2023.
50
Sofregaz case (n 45) para 57.
51
For eg in the Thalès case, The Paris Court of appeals has already stated that ‘it is undeniable that the international public
order of the Member States also derives from the (European) Community’ (Paris Court of Appeals, SA Thalès Air Défense v
GIE Euromissile, 18 November 2004, reported in (2005) 3 Rev Arb 751). Also, on the growing supremacy of European law
over French international arbitration law, see generally, Chevalier (24) 404–25.
 International sanctions enacted against Russia as overriding mandatory rules  153

rendered in France) or denied recognition and enforcement within the French legal order on
the public policy ground. Remarkably, the reasoning turns out to be different on the other

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side of the world, for example from the Indian perspective.

The perspective of Indian courts: public policy understood as national public policy
Epictetus’s lesson to ‘keep your attention focused entirely on what is truly your own concern,
and be clear that what belongs to others is their business and non-yours’ holds to be very rel-
evant in view of the Indian conception of public policy control. As opposed to France, there
is a high likelihood that an international arbitral award ignoring or in contradiction with in-
ternational sanctions against Russia would neither be annulled nor be denied enforcement
and recognition by Indian courts. India has not enacted sanctions against Russia and the
analysis of the Indian jurisprudence concerning the public policy exception under the Indian
Arbitration & Conciliation Act, 1996 (Arbitration Act) shows that Indian courts might not
be willing to take into consideration public policy rules originating from foreign legal orders.
Sections 3452 and 48,53 of the Arbitration Act, as amended in 2021, which refer to the public
policy ground under which an arbitral award may be challenged before Indian courts, provide as
follows:

(2) Enforcement of an arbitral award may also be refused if the Court finds that—(b) the
enforcement of the award would be contrary to the public policy of India.

[Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict
with the public policy of India, only if,— (i) the making of the award was induced or af-
fected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in
contravention with the fundamental policy of Indian law, or (iii) it is in conflict with the
most basic notions of morality or justice. (emphasis added)

In a case rendered in 1985, the Delhi High Court upheld trade restrictions enacted by the Indian
Government to deny enforcement of an arbitral award on the public policy ground.54 However,
this case concerns sanctions enacted by India itself (being reminded that India has currently not
adopted sanctions against Russia) and does not provide any answer as to whether Indian courts
would be willing to enforce international sanctions enacted by other legal orders. In fact, to the
author’s knowledge, there exists no case law where Indian courts were requested to apply foreign
international sanctions to the challenge of an arbitral award. Nonetheless, the following analysis
of the Indian arbitration jurisprudence suggests that Indian courts, which have built a ‘truly
Indian notion of public policy’ over the last decades,55 would probably not enforce international
sanctions originating from other, foreign, legal orders.
Sections 34 and 48 of the Arbitration Act refer to the ‘public policy of India’ to challenge
arbitral awards. The definition of ‘public policy of India’ has been the subject of judicial con-
troversies and has finally been narrowed down by the 2015 Amendment to reduce unpredict-
able court intervention.56 It should be reminded that, for a long time, the notion of public

52
This section applies to both national and international arbitral awards rendered in India. Indeed s 34 is located in pt 1 of
the Act, which applies ‘where the place of arbitration is India’ (section 2(2) of the Act).
53
This section applies to foreign arbitral awards, which have been rendered in other jurisdictions than India and which are
Members of the New York Convention.
54
COSID Inc v Steel Auth of India Ltd, XI YB Comm Arb 502, 505–06 (New Delhi High Ct. 1985) (1986).
55
Abhisar Vidyarthi and Sikander H Khan, ‘India: A Late Opening to the Notion of International Public Policy?’ (2022) 38
Arb Int 249.
56
Darius J Khambata, ‘Challenge and Enforcement of Awards: The Brooding Omnipresence of Public Policy’ in Dushyant
Dave and others, (eds) Arbitration in India (Kluwer Law International 2021) 227.
154  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

policy used to encompass the ‘interest of India’,57 before such terms were expressly excluded
by the Supreme Court in Ssangyong Engineering v National Highway Authority.58 The past ref-

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erence to the ‘interest of India’ as the cornerstone of Indian public policy, nonetheless, sug-
gests that international sanctions enacted by other legal orders, but which are not in the
interest of India, would probably not fall under the public policy ground. Having in mind
that India remains a trade partner of Russia, it seems unlikely that enforcing such interna-
tional sanctions would be compatible with its best interest of India.59 In fact, while today the
reference to the ‘interest of India’ does not anymore appear under the Indian Arbitration
Act, the Indian jurisprudence indicates that mandatory rules enacted by other legal orders
have little chance to trigger a challenge under the public policy of India.
First, Indian arbitration law does not consider international public policy rules, as opposed
to France, but only Indian public policy rules. In Renusagar Power Company Ltd v General
Electric Company,60 which remains a valid authority to define Indian public policy despite the
later amendment of the 1996 Arbitration Act, the Supreme Court interpreted the notion of
‘public policy’ under the New York Convention as the public policy as applied by the courts
in India and not international public policy. The Supreme Court expressly reasoned as
follows:

In view of the absence of a workable definition of ‘international public policy’ we find it dif-
ficult to construe the expression ‘public policy’ in Article V(2)(b) of the New York
Convention to mean international public policy. In our opinion, the said expression must
be construed to mean the doctrine of public policy as applied by the courts in which the
foreign award is sought to be enforced. Consequently, the expression ‘public policy’ in
Section 7(1)(b)(ii) of the Foreign Awards Act means the doctrine of public policy as ap-
plied by the courts in India. [. . .] (emphasis added)

Secondly, the term ‘public policy of India’ referred to in the Arbitration Act seems to exclude
public policy rules originating from foreign legal orders.61 In Smita Conductors Ltd v Euro
Alloys Ltd,62 the Supreme Court further clarified that the notion of public policy was limited
to the violation of Indian public policy only, to the exclusion of foreign public policy rules.
The court stated that:

In the absence of a definition of the expression ‘public policy’, it is construed to mean the
doctrine of public policy as applied by the courts in which the foreign award is sought to
be enforced and this Court referred to a large catena of cases in this regard. Therefore, we
will proceed on the basis that the expression ‘public policy’ means a public policy of India
and the recognition and enforcement of a foreign award cannot be questioned on the
ground that it is contrary to the foreign country public policy [. . .] (emphasis added)

Therefore, violations of public policy rules enacted by other legal orders are unlikely to be
sanctioned by Indian courts during the post-award scrutiny process. While there exists a dis-
tinction between domestic international awards and foreign arbitral awards under Indian
57
Renusagar Power Company Ltd v General Electric Company (1994) Supp 1 SCC 644, 163, para 66.
58
Ssangyong Engineering v National Highway Authority (2019) 15 SCC 131, para 24.
59
The ‘interest of India’ under the public policy ground was defined by the Supreme Court as a dynamic concept, which
concerns the position of India in the international community and its relations with other nations (see Associate Builders v
Delhi Development Authority, 2014 (4) ARBLR 307(SC), 55, para 35).
60
Renusagar case (n 57) para 66.
61
Alabh Anant Lal and Soham Banerjee, ‘The Public Policy Doctrine in Arbitration: A Primer on Its Effect on Challenges
and Enforcement of Awards’ (2019) 60 Ind Arb Law Rev 68; Khambata (n 56) 210.
62
Smita Conductors Ltd v Euro Alloys Ltd, Indian Supreme Court, (2001) 7 SCC 728, 112, para 12.
 International sanctions enacted against Russia as overriding mandatory rules  155

law,63 the same notion of ‘public policy of India’ is used under both sections 3464 and 4865
of the Arbitration Act. Thereby, foreign public policy rules would certainly be ignored by

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Indian courts regardless of whether the procedure is about the annulment of an international
arbitral award rendered in India (a domestic award) or about the enforcement of a foreign ar-
bitral award. Consequently, there is a high likelihood that an arbitral award rendered despite
or in disregard of international sanctions enacted against Russia by other legal orders would
not be annulled or denied enforcement and recognition on this ground by Indian courts.
This detailed opposition between France and India shows that international sanctions that
have been enacted against Russia would probably not receive a similar application whether
they are invoked to challenge an arbitral award before French courts or Indian courts. Before
French courts, such international sanctions are likely to be qualified as overriding mandatory
rules while a contradictory result would probably arise before Indian courts.

The perspective of other jurisdictions: USA, Germany, UK, Canada, and Singapore
A similar (but more concise) comparison between other jurisdictions also confirms that there
exist great inconsistencies regarding the enforcement of international sanctions as overriding
mandatory rules by domestic courts.
The position adopted by US courts is definitely scheming. In paradox with the common
trend of US governments to regularly impose international trade sanctions against various
countries for foreign policy matters, US courts are very reluctant to retain the violation of
economic sanctions as a valid argument to challenge arbitral awards under the public policy
exception.66 US courts have expressly stated that:

Foreign policy disputes with another country are not enough to overcome the ‘suprana-
tional’ policy of providing predictable enforcement of international arbitral awards. [. . .]
This is true even when enforcement would conflict with the US sanctions.67

Not even the violation of US trade sanctions has been considered as ground to challenge ar-
bitral awards before US courts.68 In Parsons & Whittemore v. RAKTA,69 a US Court of
Appeals limited the interpretation of the notion of public policy under the New York
Convention to the protection of the ‘most basic notions of morality and justice’ of the forum
State, excluding ‘the vagaries of international politics’.70 According to an author, US case law
suggests that their notion of ‘public policy’ under the New York Convention does not en-
compass foreign policy objectives, even if the arbitral award violates the US sanctions.71
It is, thus, likely that international sanctions enacted against Russia by various legal orders,
including the USA, would not fall under the public policy ground to challenge arbitral awards
before US courts. Consequently, international arbitral tribunals sitting in the USA or issuing
an arbitral award aiming at being enforced in the USA could potentially ignore most, if not
all, of the international sanctions enacted against Russia without fearing the Damocles sword
of US domestic courts.
63
Under Indian Arbitration law, pt 1 of the Indian Arbitration Act applies to domestic awards, including both national and
international arbitration awards rendered in India, while pt 2 applies to foreign arbitral awards.
64
Applicable to domestic international awards, meaning international arbitral awards rendered in India.
65
Applicable to foreign arbitral awards, meaning arbitral awards rendered in other jurisdictions than India.
66
Tamas Szabados, ‘EU Economic Sanctions in Arbitration’ (2018) 35 J Int Arb 458.
67
Ameropa AG v Havi Ocean Co, 2011 WL 570130 (SDNY) para 6.
68
Ministry of Defense & Support for the Armed Forces of Iran v Cubic Defense Sys, Inc, 665 F.3d 1091 (9th Cir. 2011). In this
case, the court considered that the recognition of an award would not violate public policy even were it to constitute economic
support for Iran in contravention of US sanctions).
69
Parsons & Whittemore Overseas Co, Inc v Société Generale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (2d Cir 1974).
70
For an analysis of this case, see Szabados (n 66).
71
ibid 458–59.
156  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

On the contrary, the national courts of EU Member States are more likely to consider the
violation of international sanctions enacted against Russia when controlling for compliance

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of the award with their public order, since the EU itself has enacted sanctions against Russia.
After the strong signal sent by the European Court of Justice in Eco Swiss China Time Ltd v
Benetton International NV,72 there is a high possibility that EU Member States would all en-
force the sanctions enacted by the EU against Russia as part of their national public policy
ground to deny enforcement and recognition or to annul arbitral awards.73
International sanctions enacted by national or regional legal orders outside the EU could
also be potentially enforced by national courts of EU Member States as a matter of foreign
overriding mandatory rules. For example, in Germany, national courts have already decided
that an arbitral award giving effect to a contract in violation of the law of a foreign State pro-
tecting its cultural heritage was contrary to the German public order,74 or that foreign sanc-
tions and embargos may create a public policy defence against enforcement in Germany.75
More precisely, German courts have reasoned that a contract circumventing a US embargo
violated the German public order because such an embargo served a supranational interest.76
Therefore, international sanctions enacted against Russia by foreign legal orders would prob-
ably fit under the German conception of public policy if such sanctions serve a supranational
interest, such as peace.
On the other side of the North Sea, English courts also tend to give effect to international
sanctions, under certain conditions. For example, in Ministry of Defence & Support for the
Armed Forces of the Islamic Republic of Iran v International Military Services Ltd, English courts
have applied EU sanctions imposed against Iran during an award enforcement process.77
Similar to France, English courts have expressly acknowledged the existence of a truly inter-
national public order, stating that:

[t]he public policy condemning Iraq’s flagrant breaches of public international law is yet
another illustration of such a truly international public policy in action.78

Under certain conditions, English courts are willing to treat foreign public policy rules as
part of international public policy.79 For example, in Regazonni v KC Sethia Ltd, decided in
1958, the House of Lords denied enforcement of an arbitral award that violated trade sanc-
tions imposed by India,80 even though the contract object of the dispute was perfectly valid
under the lex contractus (English law). Furthermore, none of the parties were domiciled in
72
Case C-126/97, Eco Swiss China Time Ltd v Benetton International NV [1999] E.C.R. I-3055, para 36. In this case about
the challenge of an arbitral award, the European Court of Justice reasoned that European Public Policy rules were part of
Member States’ notion of public policy under art 101 of the TFEU. See eg, Kazim S Sirmen, ‘The Concept of Public Policy in
the Eco Swiss Decision of the Court of Justice of the European Union and its Impact on the Intra-EU Investment Treaty
Arbitrations’ (2021) 12 Inonu University Law Review 441.
73
For eg, even French courts, which normally advocate for the recognition of an independent arbitral order, nowadays rec-
ognize the supremacy of European law over international arbitration law (see Chevalier (n 24) 404–25. About the supremacy
of EU law over the arbitration law of EU Member States, see generally, Manuel P Fons, ‘The Effet Utile of European Union
Law and the Prohibition of Revision au Fond’ (2016) 16 Anuario Espanol Derecho Intl Priv 249.
74
Bundesgerichtshof, 22 June 1972, II ZR 113/70, Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) 59, 82, 87.
75
Oberlandesgericht Hamburg, 26 January 1989, 6 U 71/88, Recht der Internationalen Wirtschaft (RIW) 1991, 152, 153ff, cited
in Christopher Style and Stephan Balthasar, ‘Enforcing International Arbitral Awards: Pitfalls and Strategies’ (2012) 6 Disp Resol Intl
3, 13.
76
BGH: Sittenverstoß durch auf Täuschung Dritter berechnete Vertragserklärungen, NJW 1961, 822.
77
MODSAF v IMS [2019] EWHC 1994 (Comm); MODSAF v IMS [2020] EWCA Civ 145.
78
Kuwait Airways Corp v Iraq Airways Co [2002] 1 All ER (Comm) 843.
79
Pierre Lalive, ‘Transnational (or Truly International) Public Policy and International Arbitration’ in Pieter Sanders (ed),
Comparative Arbitration Practice and Public Policy in Arbitration (ICCA Congress Series, Kluwer Law International 1986) vol 3,
279.
80
In this case, the award was in violation of Indian trade sanctions prohibiting the trade of jute with South Africa following
apartheid measures imposed by the later on Indian nationals.
 International sanctions enacted against Russia as overriding mandatory rules  157

India, and the award was neither in contradiction with the lex fori nor the (supposed) law of
the place of performance.81 English courts might thus be potentially ready to enforce the

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existing sets of international sanctions enacted by other legal orders against Russia, provided
that they constitute truly international public policy rules under the English doctrine.
When looking at the other side of the North Atlantic Ocean, in Canada, the Quebec
Court of Appeals also acknowledged in Air France v Libya Arab Airlines that arbitrators were
bound to enforce norms belonging to the international public order.82 Similarly in a recent
case about the impact of Russian sanctions on the enforcement of an LCIA award in Canada
by a company supposedly controlled by a Russian entity, the Canadian courts made express
reference to US, EU, and UK sanctions to interpret the notion of controlled entity.83 More im-
portantly, the court reminded that one of the objectives of sanctions enacted by Canada
against Russia was to ‘align Canada’s actions with those taken by international partners to un-
derscore continued unity with Canada’s allies and partners in responding to Russia’s actions
in Ukraine’.84 It is therefore also likely that Canadian courts would be willing to give effect to
international sanctions enacted against Russia by other legal orders.
Finally, some authors have considered Singapore as being neutral about international sanc-
tions involving Russian parties.85 As explained above, Singapore has adopted sanctions
against Russia. However, the scope of application of these sanctions seems territorially lim-
ited to Singapore concerning the export of goods, and limited to Singaporean institutions
concerning the financial measures. Singaporean sanctions might therefore be of little rele-
vance for a dispute involving foreign parties having the seat of arbitration as the sole connec-
tion to Singapore. It is therefore necessary to assess whether sanctions enacted by other
jurisdictions could potentially be enforced by Singaporean courts at the post-award stage.
Article 34(2)(b)(ii) of the International Arbitration Act (which is a replica expresis verbis
of the UNCITRAL Model Law)86 provides that courts may annul an arbitral award, which is
contrary to the ‘public policy of this State’. Interestingly, the International Arbitration Act
indicates that ‘“this State’ means Singapore’. This suggests that, when assessing the public
policy ground, Singaporean statutory law does not allow Singaporean courts to take into con-
sideration public policy rules enacted in foreign States. Also, Article 31(4)(b) of the
International Arbitration Act, which is applicable for the refusal of enforcement of foreign ar-
bitral awards in Singapore, expressly refers to the ‘public policy of Singapore’.87 Because
Singaporean courts consider that the public policy ground is similar between annulment and
enforcement of arbitral awards,88 we can easily conclude that, in Singapore, the public policy
ground does not encompass international public policy rules but rather the public policy of

81
Regazonni v KC Sethia Ltd 958 AC 301; [1957] 3 All ER 286; J 1961. 1140.
82
Air France v Libya Arab Airlines [2000] RJQ 717. In this particular case, the court was referring to embargo sanctions
placed by the United Nations over Lybia.
83
Angophora Holdings Limited v Ovsyankin, 2022 ABKB 711 (CanLII) paras 31–35. In this case, Canadian courts had to de-
cide on whether they should Stay off the execution (which is the stage after the enforcement) of an arbitral award affected by
the Russian sanctions. In the end, the Stay application was dismissed because the applicant did not demonstrate an ‘irreparable
harm’.
84
ibid.
85
Vladimir Khvalei, ‘Impact of Sanctions on International Arbitration’ in Bachir Georges Affaki and Vladimir Khvalei (eds),
Overriding Mandatory Rules and Compliance in International Arbitration (Dossiers of the ICC Institute of World Business Law
19 2023) 146.
86
More precisely, as provided by art 3(1) of the International Arbitration Act, the Model Law has the force of law in
Singapore.
87
art 31(4)(b) of the International Arbitration Act provides that ‘In any proceedings in which the enforcement of a foreign
award is sought by virtue of this Part, the court may refuse to enforce the award if it finds that. . .enforcement of the award
would be contrary to the public policy of Singapore.’
88
AJU v AJT [2011] 4 SLR 739 (AJU v. AJT) paras 37–38. Tellingly, in this case, the Court focused on assessing ‘what the
public policy of Singapore is’ (see para 62).
158  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

Singapore only.89 Therefore, the analysis of the Singaporean notion of public policy suggests
that Singaporean courts might not be willing to enforce international sanctions enacted by

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other legal orders.
Clearly, assessing the applicability of a given public policy rule across legal orders can be a
real source of headaches for arbitration practitioners. This comparative analysis between dif-
ferent legal orders shows that there exists no universal answer regarding the binding nature
of international sanctions over international arbitration. Some jurisdictions, such as the USA
or India, are not willing to enforce international sanctions enacted by foreign legal orders un-
der their public policy ground during the post-award control stage. Singapore might also be a
neutral forum immune from foreign international sanctions. On the contrary, other jurisdic-
tions, such as France, the UK, Canada, and Germany, seem to be willing to enforce interna-
tional sanctions as overriding mandatory rules, even if they originate from foreign legal
orders, provided that such sanctions reach an international consensus, that they belong to
the transnational public policy or that they aim at promoting universal values.
It is opined that international arbitrators and counsel might have a hard time when trying
to assess whether a particular set of international sanctions enacted against Russia is constitu-
tive of overriding mandatory rules for their case or not, since such qualification varies from
one jurisdiction to another. Furthermore, as will be explained further in the article, the an-
swer is also likely to vary before international arbitral tribunals depending on the different
existing representations of international arbitration.
However, it is important to add one fundamental parameter to the picture: even if an arbi-
tral award was to be annulled by the national courts of the seat for violating international
sanctions against Russia, such annulled arbitral award would probably remain enforceable be-
fore Russian courts.

ANNULMENT OF ARBITRAL AWARDS BY WESTERN COURTS AND

ENFORCEMENT RETALIATION FROM RUSSIAN COURTS
The national courts of the seat that annulled an arbitral award due to its contradiction with
international sanctions might see their role highly reduced in scenarios where the prevailing
party aims at enforcing such arbitral award on assets located in Russia. In this section, the au-
thor will demonstrate that an arbitral award annulled by western jurisdictions due to its con-
tradiction with international sanctions enacted against Russia might remain enforceable
before Russian courts. Indeed, having in mind the perspective of Russian courts is central to
the present analysis. In most cases, the debate regarding the applicability of international
sanctions will arise because a Russian party is involved in the dispute and therefore, Russia
will be an important potential enforcement forum for the arbitral award.
In these times of economic conflicts, Russian courts could easily decide to enforce an arbi-
tral award in favour of a Russian entity to attach foreign assets located in Russia even if such
an award was annulled by the jurisdictions of the seat due to its inconsistency with economic
sanctions imposed by Western countries against Russia. When it comes to applying public
policy rules, international arbitrators usually ask themselves whether the award would remain
enforceable or not if they were to ignore such rules. The author believes that an arbitral
award violating international sanctions would remain enforceable in Russia despite its
89
For a detailed analysis of the reference to the public policy ‘of Singapore’ under the International Arbitration Act, see
Alvin Yeo and Swee Yen Koh, ‘Arbitration, Public Policy and Enforcement After Achmea: A Perspective from Singapore’ in
Ana Stanic and Crina Baltag (eds), The Future of Investment Treaty Arbitration in the EU: Intra-EU BITs, the Energy Charter
Treaty, and the Multilateral Investment Court (Kluwer Law International 2020) 186; see also Locknie Hsu, ‘Public Policy
Considerations in International Arbitration: Costs and Other Issues’ (2009) 26 J Intl Arb 116.
 International sanctions enacted against Russia as overriding mandatory rules  159

potential annulment by the courts of the seat. This article looks into the legal basis that could
justify how Russian courts might disregard the annulment judgment from the courts of the

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seat in order to enforce such an award against foreign assets located in Russia. In other
words, international sanctions are likely to generate a dichotomy within Russian arbitration
law regarding the enforcement of annulled arbitral awards. Under Russian law, an arbitral
award annulled by the competent courts is normally not enforceable before Russian courts
(section 3(A)). However, arbitral awards annulled due to their violation of international
sanctions against Russia might remain enforceable before Russian courts (section 3(B)).

Annulled Arbitral Awards are ordinarily not enforceable in Russia

Article V(1)(e) of the New York Convention provides that a Contracting State may deny
recognition and enforcement of an arbitral award that has been annulled by the courts of the
seat of arbitration.90 The use of the wording ‘may’ combined with the more favorable law ap-
proach provided by Article VII of the New York Convention91 has been interpreted by vari-
ous authors,92 and national courts,93 as creating no obligation on national courts to refuse
the enforcement of an award that has been annulled by the courts of the seat of arbitration.
Russian courts do not acknowledge the existence of an arbitral legal order detached from
national legal orders. Contrary to French courts,94 the annulment decision from the courts
of the seat is a valid ground to deny recognition and enforcement of an arbitral award before
Russian courts. While some authors acknowledge the existence of an arbitral legal order de-
tached from national legal orders,95 this approach is subject to much criticism96 and has not
received international acceptation. Russian courts do not seem to have embraced such an ap-
proach. Indeed, it seems that Russian courts have rather adopted a strict interpretation of the
New York Convention and regularly refuse to enforce arbitral awards that have been an-
nulled by the courts of the seat. In this regard, an author argues that an award that has been
90
For simplification, this article refers to the ‘courts of the seat’, but the New York Convention refers to the ‘competent au-
thority of the country in which, or under the law of which, that award was made’. In practice, the country in which the award
was made and the country under the law of which the award was made are always the same.
91
For a general explanation of the more favourable law approach under art VII of the New York Convention, see Dirk
Otto, ‘Article VII’ in Herbert Kronke and others (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global
Commentary on the New York Convention (Kluwer Law International 2010) 448–52.
92
Stephen T Ostrowski and Yuval Shany, ‘Chromalloy: United States Law and International Arbitration at the Crossroads’
(1998) 73 NYU L REV 1682; Jan Paulsson, ‘May or Must under the New York Convention: An Exercise in Syntax and
Linguistics’ (1998) 14 Arb Int 227; Nadia Darwazeh, ‘Article V(1)(e)’ in Herbert Kronke and others (eds), Recognition and
Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer Law International 2010)
308–09.
93
For eg in Hong-Kong, see China Nanhai Oil Joint Service Corporation Shenzhen Branch v Gee Tai Holdings Co Ltd, YCA
XX (1995), 671 (High Court, Hong Kong); in Brazil, see First Brands do Brasil Ltda y STP do Brasil Ltda v STP Petroplus
Produtos Automotivos S-/A PPA y Petroplus SUl Comércio Exterior S/A PSC, 23 November 2006, SEC No 611; in the USA, see
In re Chromalloy Aeroservices v The Arab Republic of Egypt, 939 FSupp 909 (1996), YCA XXII (1997), 1001, 1004.
94
French courts constantly consider that the enforcement in France of a foreign arbitral award should be examined only in
the light of the rules applicable in France and that the annulment of the said award by the courts of the seat has no effect on its
recognition and enforcement in France. See Société Hilmarton Ltd v Société Omnium de traitement et de valorisation (OTV),
Cass 1re Civ, 23 March 1994; Société PT Putrabali Adyamulia v Société Rena Holding et Société Moguntia Est Epice, Cass 1re Civ,
29 June 2007; Republic of Benin v Société SGS, Paris Court of Appeals, 11 January 2022, no 20/17923. For a detailed presenta-
tion of the French approach on the enforcement of annulled awards, see Emmanuel Gaillard, ‘Enforcement of Awards Set Aside
in the Country of Origin: The French Experience’ in Albert J van den Berg (ed), Improving the Efficiency of Arbitration
Agreements and Awards: 40 Years of Application of the New York Convention (ICCA Congress Series, Kluwer Law International
1999) vol 9, 505–27.
95
Gaillard (n 22) 13–60; Emmanuel Gaillard, ‘The Present–Commercial Arbitration as a Transnational System of Justice:
International Arbitration as a Transnational System of Justice’ in Albert Jan van den Berg (ed), Arbitration: the Next Fifty Years
(ICCA Congress Series No 16, 2012) 66–73; Raquel M Moreira, ‘The Détachement of International Arbitration: Reflections
on the Existence of an Arbitral Order Détaché’ (2016) 8 Rev Bras Arb 78; James Allsop, ‘International Commercial
Arbitration–the Courts and the Rule of Law in the Asia Pacific Region’ (2015) 81 Intl J Arb Med Disp Man 169; Maxime
Chevalier, ‘From smart contract litigation to blockchain arbitration, a new decentralised approach leading towards the block-
chain arbitral order’ (2021) 12 J Intl Disp Sett 574.
96
Jan Paulsson, ‘Arbitration in Three Dimensions’ (2011) 60 Intl Comp LQ 291, 11; Frederick A Mann, ‘The UNCITRAL
Model Law: Lex Facit Arbitrum’ in Martin Domke and Pieter Sanders (eds), International Arbitration: Liber Amicorum for
Martin Domke (Martinus Nijhoff 1967), reprinted in (1986) 2 Arb Intl 241.
160  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

annulled by the competent authority cannot be enforced in Russia.97 More precisely, Article
239(2)(5) of the Russian Commercial Procedure Code (and its identical counterpart in

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Article 426(2)(5) of the Russian Code of Civil Procedure) provides that an award may be
denied enforcement if it has been annulled by the court of the State where or under the law
of which the award was made.98 In practice, Russian courts have already refused to grant rec-
ognition and enforcement99 of an SCC award100 rendered by an arbitral tribunal seated in
Sweden because it had been annulled by the Stockholm district court.101
On the contrary, the Arbitrazh Court of the Kemerovo Region in Siberia accepted to en-
force an arbitral award that was annulled by the courts of the seat (Turkey).102 It was sug-
gested that, although this decision was rendered in the first instance, it nonetheless showed
the willingness of the Russian courts to accept the recognition and enforcement of an award
annulled at the seat of arbitration.103 However, this case was later overturned by the Federal
Arbitrazh Court of the West-Siberian District on the basis that the award had been set aside
by the Turkish court, the jurisdiction of the seat of arbitration.104 Thus, Russian courts seem
to be inclined to refuse to enforce annulled arbitral awards.
Consequently, does this mean that an arbitral award that has been annulled by Western
courts due to its violating international sanctions against Russia would not be enforceable be-
fore Russian courts? The author disagrees for many reasons provided below.

Arbitral awards annulled due to their violation of international sanctions might remain
enforceable before Russian courts
The author believes that Russian judges might be inclined to ignore a post-award annulment
judgment from the courts of the seat when such judgment made application of international
sanctions enacted against Russia. Indeed, the adoption of international sanctions against
Russian individuals and entities will probably not be well perceived by Russian courts, which
might be tempted to negate any judicial decision enforcing such sanctions. On the contrary,
giving effect to international arbitral awards by ignoring such sanctions would be a way for
Russian courts to contest these sanctions and to encourage international arbitrators to ignore
these sanctions. But how could Russian courts give effect to an arbitral award that has been
annulled by the competent courts based on its violation of international sanctions?
A first justification for Russian courts to enforce an annulled arbitral award could be what
J Paulsson calls the ‘local standard annulments’ theory. According to such an approach, an
enforcement court could grant enforcement of an award that has been annulled due to ‘local
standards of annulment’, by opposition to ‘international standards of annulments’, only the

97
Diana Tapola, ‘Recent Case Law on the Recognition and Enforcement of Foreign Arbitral Awards in Russia’ 22 J Intl
Arb 349.
98
See Andrey Kotelnikov and others (eds), Arbitration in Russia (Kluwer Law International 2019) 191–202.
99
MIR Muteahhitlik v Tizharet ASh, Federal Arbitrazh Court of the Moscow Circuit of 29 July 2003, no KG-A40/4363-03.
100
SCC Case No 035/1997, 5 January 2001.
101
Stockholm District Court, No T3697-01, 12 October 2001.
102
Ciments Français v Sibirskyi Cement Holding Company, Arbitrazh Court of the Kemerovo Region, 20 July 2011, Case No
A27-781/2011. In this first instance, the Court applied the 1961 Geneva Convention by priority to the New York Convention.
The Geneva Convention limits the applicability of the art V(1)(e) of the New York Convention to grounds for annulment di-
rectly provided in the Geneva Convention. Because the annulment of the award by Turkish courts was based on grounds which
are not provided by the Geneva Convention, the Russian court refused to deny enforcement of the award.
103
Thomas Kendra, ‘The International Reach of Arbitral Awards Set aside in their Country of Origin: A Turning Point’
(2012) 35 Intl Bus LJ 44.
104
Ciments Français v Sibirskyi Cement Holding Company, Federal Arbitrazh Court for the West-Siberian District, 5
December 2011, Case No A27-781/2011. In its reasoning, the Russian judges made direct reference to art V(1)(e) of the New
York Convention and art 36(1)(1) of the RF Law No 5538-1 on International Commercial Arbitration, which provides that
the State court considering the case can refuse the recognition and enforcement of an international award if the award has
been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was
made.
 International sanctions enacted against Russia as overriding mandatory rules  161

latter being conform to the spirit of the New York Convention.105 However, Russian courts
might find difficulty to justify their position on this theory since international sanctions aim-

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ing for the protection of transnational values, such as peace, are unlikely to qualify as local
standards of annulments, especially when they have been enacted by many legal orders.
Alternatively, Russian courts might be tempted to adopt what M Scherer calls the ‘judgment
route’ approach. According to this theory, when assessing whether an award may be denied en-
forcement based on the fact that it has been set aside by the courts of the seat, the enforcement
courts should first assess whether the annulment judgment from the national courts of the seat
should be given deference or not.106 Another author also acknowledges that an award that has
been set aside could still be enforced by the court of enforcement if there are grounds to deny
recognition of the judicial decision that annulled the award.107 In other words, and despite
some criticism,108 under this approach, the decision from the courts of the seat of arbitration
would not immediately make the award disappear from the international scene.109 From the en-
forcement court’s point of view, the judgment annulling the arbitral award would have an effect
on the award provided that it first recognizes such judgment.110
Following the judgment route approach, Russian courts could justify the enforcement of
an arbitral award ignoring international sanctions even if the courts of the seat issued an an-
nulment judgment against such award. Russian courts could potentially argue that the judg-
ment of the courts of the seat is in violation of Russian public policy and that, consequently,
it should not be given deference. In doing so, Russian courts would offer strong support to
international arbitrators refusing to apply international sanctions enacted against Russia to
their cases by guaranteeing the enforcement of their awards in Russia.
More precisely, Russian Arbitrazh courts tend to interpret the notion of public policy in
very broad terms.111 It is suggested that a sympathetic Russian local court might set side
105
Jan Paulsson, ‘The Case for Disregarding Local Standard Annulments under the New York Convention’ (1996) 7 Am
Rev Intl Arb 99; Jan Paulsson, ‘Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment (LSA)’ (1998) 9 ICC
Bull 99.
106
Maxi Scherer, ‘Effects of Foreign Judgments Relating to International Arbitral Awards: Is the “Judgment Route” the
Wrong Road?’ (2013) 4 J Intl Disp Sett 595.
107
Alexey Vyalkov and Alexey Vyalkov, ‘Recognition and Enforcement of Foreign Arbitral Awards in Russia That Have
Been Set Aside at the Seat of Arbitration’ in Roman Zykov (ed), Recognition and Enforcement of Foreign Arbitral Awards in
Russia and Former USSR States (Kluwer Law International 2021) 191–92.
108
Philipp Wahl, ‘Enforcement of Foreign Arbitral Awards Set Aside in their Country of Origin—The Chromalloy Case
Revisited’ 16 J Intl Arb 131; Thomas Carbonneau, ‘Debating the Proper Role of National Law under the New York Arbitration
Convention’ (1998) 6 Tul J Intl Comp L 277.
109
For the argument that the annulment judgment does not necessarily remove the award from the international scene, see
generally, Pierre Lastenouse, ‘Why Setting Aside an Arbitral Award is not Enough to Remove it from the International Scene’
(1999) 16 J Intl Arb 25–48.
110
For eg, Dutch courts have already enforced an award that had been annulled by Russian courts, the courts of the seat,
reasoning that ‘it is likely that the Russian Civil Court decisions annulling the arbitral award were the outcome of a judicial pro-
cess that must be deemed partial and dependent’ (Decision of the Amsterdam Court of Appeal, Case No 200.005.269/01,
dated 28 April 2009 Yukos Capital SARL v OAO Rosneft). The judgment route approach was also adopted in the USA in several
cases, where the enforcement courts first assessed whether it should give deference to the decision of the seat of arbitration an-
nulling the arbitral award before deciding whether it should enforce such award or not. See eg, Chromalloy Aero services v Arab
Republic of Egypt (FSupp 907 (DDC 1996), 939) where the court refused to acknowledge the annulment judgment from
Egyptian courts because ‘[a] decision by this Court to recognize the decision of the Egyptian court would violate this clear U.S.
public policy’); Baker Marine Ltd v Chevron Ltd (F3d 194, 197 n3 (2d Cir 1999) where the court assessed whether there were
adequate reasons for refusing to recognize the [set aside] judgments of the Nigerian court; Spier v Calzaturificio Tecnica SpA
(FSupp 2d 279 (SDNY 1999), where the court also analyzed whether there was adequate reason for refusing to recognize the
[set aside] judgments of the Italian courts; TermoRio SA v Electranta (SP 487 F3d 928 (DC Cir 2007) no 938), where the court
stated that ‘[i]n applying Article V(1)(e) of the New York Convention, we must be very careful in weighing notions of ‘public
policy’ in determining whether to credit the judgment of a court in the primary State vacating an arbitration award’. To go fur-
ther, the US Restatement on International Commercial Arbitration provides that ‘[e]ven if [the award] has been set aside by a
competent authority, a court of the United States may confirm, recognize, or enforce the award if the judgment setting it aside
is not entitled to recognition under the principles governing the recognition of judgments [. . .]’ (Restatement of the Law
(Third), The U.S. Law of International Commercial Arbitration, Tentative Draft no 2 (n 23) ss 4-16(b), cited in Maxi Scherer,
‘Effects of Foreign Judgments Relating to International Arbitral Awards: Is the “Judgment Route” the Wrong Road?’, (2013) 4
J Intl Disp Sett 598.
111
Sergei Gorbylev, ‘Arbitration in Russia: Are There Any Local Differences’ (2015) 5 Intl Bus LJ 463, 471.
162  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

with a Russian party for reasons beyond the boundaries of public policy recognized in the
West.112 Indeed, while trying to give a restricted vision of public policy, the Moscow Circuit

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Court pointed to the ‘defense interests of the country’ as part of the Russian conception of
public policy.113 The sovereignty and security of the Russian State were also mentioned as
public policy rules by the Federal Commercial Court.114 Besides, Russia has already adopted
countermeasures by amending its Code of Commercial Procedure to ensure the protection
of Russian persons or entities targeted by international sanctions.115 Consequently, because
international sanctions are fundamentally against the interests of Russia, it would not be sur-
prising that Russian courts consider award annulment judgments from Western jurisdictions
enforcing international sanctions enacted against Russia as being a violation of Russian public
policy. This would justify the Russian court’s refusal to give deference to award annulment
judgments from the courts of the seat.
Thus, it is likely that, when deciding whether an arbitral award annulled by the jurisdic-
tions of the seat (potentially from a Western country) should be granted enforcement,
Russian judges could be tempted to reason that the annulment judgment should not be given
deference because it does not comply with Russian principles on the recognition of foreign
judgments. In other words, the author believes that a judgment annulling an arbitral award
based on the violation of the various international sanctions against Russia has barely any
chance of being given deference by Russian courts. In doing so, Russian courts would have a
way to both encourage international arbitrators to ignore international economic sanctions
imposed against Russia and to ensure the protection of Russian entities by allowing them to
enforce arbitral awards against foreign assets located in Russia.
Consequently, when international arbitrators wonder whether their award would remain
enforceable in Russia if it was to be rendered in ignorance or violation of international sanc-
tions against Russia, the answer should remain affirmative despite a potential annulment
decision from the jurisdictions of the seat.

APPLICATION OF INTERNATIONAL SANCTIONS BY

INTERNATIONAL ARBITRATORS AS OVERRIDING MANDATORY
RULES: A THREE DIMENSIONS PERSPECTIVE
Having clarity about the national courts’ point of view regarding international sanctions does
not necessarily give a complete picture of the position that should be adopted by interna-
tional arbitrators. The present chapter attempts to provide an answer to the following
fundamental question: Under what conditions would international arbitral tribunals feel
bound to enforce international sanctions as mandatory overriding rules? As already men-
tioned, international arbitral tribunals have no forum, and therefore, the application of inter-
national sanctions as mandatory overriding rules by the latter will depend on many factors.
International arbitrators are often confronted with a plurality of divergent views from several
legal orders connected to the dispute before them and will have to decide whether a public
policy rule enacted by one or several States should be applied or not.
Many authors attempted to establish some sort of legal test to determine whether a
particular rule should qualify as an overriding mandatory rule binding international
112
Simon G Zinger, ‘Navigating the Russian Shipping Industry: Making the Most of International and Russian Law for
Successful Arbitration against Russian Parties’ (1995) 8 USF Mar LJ 141, 171.
113
VAS Presidium, Case No 3253/04, judgment of 22 June 2004, Vestnik VAS RF (2004) No 10.
114
Decree of the Federal Commercial Court for the Moscow Circuit of 3 April 2001 in Case No KG-A40/1672.
115
Elena S Burova and Baiju S Vasani, ‘Sanction-affected Persons Receive New Procedural Guarantees based on the Recent
Amendments to the Russian Code of Commercial Procedure’ in Elena Burova and Baiju Vasani (eds), A Contribution by the
ITA Board of Reporters (Kluwer Law International 2020).
 International sanctions enacted against Russia as overriding mandatory rules  163

tribunals.116 The author believes, on the contrary, that the answer is to be found in the exist-
ing representations of international arbitration.117

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The three dimensions discussed in the present section correspond to the three existing le-
gal theories of international arbitration.118 Each representation of international arbitration,
from the most dependent to national legal orders to the most independent, has a great im-
pact on international arbitrators’ reasoning, including the application of public policy consid-
erations. The author will discuss the enforcement of international sanctions by international
arbitrators under the territorial (4(A)), multilocal (4(B)), and transnational approaches
(4(C)). As illustrated in the following paragraphs, the answer as to whether international ar-
bitral tribunals should feel bound to apply international sanctions as overriding mandatory
rules varies depending on the applicable representation of international arbitration.

Enforcement of international sanctions by international arbitrators as overriding

mandatory rules under the territorial approach
Because it’s only the modern that ever becomes old-fashioned, it should first be discussed
the old territorial representation of international arbitration which once dominated under
the 1927 Geneva Convention and its double-exequatur requirement,119 theory yet still rele-
vant in several jurisdictions. Under the territorial or monolocal approach, the seat of arbitra-
tion is deemed to be the only source of legitimacy of the arbitral process.120 This theory
proposes that arbitrators administer justice on behalf of the State where the arbitration pro-
cess is seated. In line with State positivists’ understanding of the law, only the norms formally
laid down by the State shall be considered a rule of law.121 In the words of whom we could
call the figure of this representation, FA Mann:

[. . .] The phrase is a misnomer. In the legal sense, no international commercial arbitration

exists. Just as, notwithstanding its notoriously misleading name, every system of private in-
ternational law is a system of national law, every arbitration is a national arbitration, that is
to say, subject to a specific system of national law.122

Under this approach, the arbitral process is likely to be highly influenced by the legal norms
existing at the seat of arbitration (such as procedural rules, conflict of law rules, public policy
rules, anti-suit injunctions from the courts of the seat, etc.). Thus, the lex arbitri plays a cen-
tral role when deciding on the enforceability of international sanctions by arbitral tribunals.
Arbitrators adhering to this representation of international arbitration might thus be mainly
concerned by the sanctions enacted by the seat of arbitration and will not necessarily feel
concerned by sanctions adopted by other—considered as foreign—jurisdictions. They might
116
Nathalie Voser, ‘Mandatory rules of Law as a Limitation on the Law Applicable in International Commercial Arbitration’
(1996) 7 Am Rev Intl Arb 319, 348; Mercedeh A da Silveira, Trade Sanctions and International Sales: An Inquiry into
International Arbitration and Commercial Litigation (Kluwer Law International 2014) paras 207–38.
117
For a detailed discussion on the existing legal theories of international arbitration, see Gaillard (n 22); Paulsson (n 96).
118
See generally, Paulsson (n 96); For the emergence of a fourth representation of international arbitration in the
Blockchain Arbitration context deriving from the creation of a Blockchain Legal Order, see Chevalier (n 95) 558–84.
119
The 1927 Geneva Convention on the Execution of Foreign Arbitral Awards required the award to be first confirmed by
the courts of the seat (called the first exequatur) before being subject to enforcement in other jurisdictions (the second exequa-
tur). Indeed, art 4 of the 1927 Geneva Convention required for the party wishing to enforce an arbitral award to supply docu-
mentary evidence that such an award became final in the country in which it was made. This requirement was then eliminated
under the New York Convention.
120
For a detailed presentation of the monolocal representation of international arbitration, see Mann (n 96) 241; Sundaresh
Menon, ‘Standards in Need of Bearers: Encouraging Reform from Within’ (Chartered Institute of Arbitrators: Singapore
Centenary Conference 2015).
121
John Austin, Austin: The Province of Jurisprudence Determined (CUP 1995); Hans Kelsen, Pure Theory of Law (The
Lawbook Exchange 2009).
122
Mann (n 96) 241.
164  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

enforce international sanctions enacted by other legal orders, as foreign norms, but provided
that the courts of the seat would have done so if the question was presented before them.123

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Therefore, the scope of enforcement of international sanctions is narrow under this
approach.
In a recent case, arbitrators have justified the mandatory application of European public
policy rules implementing embargo sanctions against Iraq, reasoning that these rules applied
to any tribunal sitting in one of the Member States of the EU.124 An author suggests that the
reasoning of the arbitral tribunal was therefore subject to a territorial approach since these
rules were applied as part of the lex arbitri.125
On the contrary, to illustrate this with a broader perspective, the author believes that, un-
der the territorial approach, an arbitral tribunal sitting in New Delhi is likely to consider that
only the sanctions enacted by India or the ones falling under the Indian public policy stan-
dard should be taken into consideration. Consequently, in such a scenario, even if EU or US
sanctions were potentially applicable to the contract in dispute, they might not be considered
as binding by the arbitral tribunal. Indeed, an arbitral tribunal sitting in New Delhi has no
reason to believe that Indian courts would consider that foreign international sanctions
enacted by the EU or the USA against Russia are overriding mandatory norms applicable as
a matter of Indian public policy. The disrespect of such sanctions would probably not lead to
the annulment of the arbitral award.126
Under the territorial approach, parties could thus—apart from the award of secondary
control by the jurisdictions of enforcement—easily bypass international sanctions enacted by
various legal orders against Russia by choosing to arbitrate their dispute in a country which is
neutral and has not enacted any sanction against Russia. Since international arbitrators assim-
ilate themselves within the judiciary of the seat, they would not enforce international sanc-
tions if such sanctions do not integrate with the public order of such a seat. In this regard, it
has been suggested that the recent international sanctions might lead Russian entities tar-
geted by the sanctions to start opting for arbitration venues in Asia such as Hong Kong, as
opposed to traditional arbitration forums in Europe.127 The territorial approach thus allows
parties to circumvent international sanctions by forum shopping—ie, choosing their arbitral
forum in a neutral legal order. For good reasons, the territorial approach does not anymore
fit with the realities of our current international arbitration system.128
Alternatively, the enforcement of international sanctions turns different under the multilo-
cal approach, which is nowadays embraced by a large majority of arbitration practitioners.

Enforcement of international sanctions by international arbitrators as overriding

mandatory rules under the multilocal approach
Unlike the territorial approach, the multilocal representation of international arbitration does
not find the legitimacy of the arbitral process solely in the legal order of the seat of
123
Gaillard (n 22) 115.
124
The authors could not access the award. However, the facts of the case and the reasoning of the arbitral tribunal have
been discussed before French courts (Paris Court of Appeals, 16 January 2018, no 16/05996; Cass 1st Civ, 15 January 2020,
no 18-18.088) and commented in L d’Avout, ‘Embargo International et déni de Justice Arbitrale’ (2020) 3 Rev D Intl Priv 526.
125
d’Avout ibid (‘thus, the arbitral tribunal felt obliged to apply the European implementing rules operating in the proce-
dural field of admissibility of legal claims, not because of their nature as public policy legislation, but because they belong to the
lex arbitri’).
126
As explained in s 2(B), foreign public policy rules are not part of the Indian public policy and thus, not enforced by
Indian domestic courts.
127
Konstantin I Kroll, ‘Impact of Sanctions on International Arbitration Involving Russian Parties’ (2020) 2 Com Arb Mag
(Chamber of Commerce and Industry of the Russian Federation 2020) [Rjvvehxecrbq ffh,bnha;] 2(4) 61–64.
128
Paulsson (n 96) 6 (‘the theory does not moreover sit well with the observations that. . .the New York Convention on
the Recognition and Enforcement of foreign Arbitral Awards mandates enforcement without any need for the slightest expres-
sion of approval from the courts of the place of arbitration’).
 International sanctions enacted against Russia as overriding mandatory rules  165

arbitration, but also in all the potential legal orders ready to enforce the arbitral award.129
According to this representation, also called the Westphalian approach, when international

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arbitrators face two conflicting rules, they bear in mind that ‘no sovereign enjoys an exclusive
right to deal with the award’.130 In the words of E Gaillard, under the multilocal approach:

All laws that are likely to have a connection with a given arbitration are considered as hav-
ing an equal say with regard to the validity of the award. The law of the country or the
countries where enforcement is sought has indeed as much entitlement in this respect as
that of the State in which the arbitration took place.131

Consequently, under the Westphalian approach, the public policy rules of a plurality of legal
orders will be taken into consideration by the arbitral tribunal.132 On the one hand, because
arbitrators have no forum, they have no direct duty to safeguard the public policy of any
State.133 But on the other hand, it is now largely acknowledged that arbitrators have an im-
plied duty to render an enforceable award.134 Recognized as a matter of professional pride,135
an arbitrator will have failed the responsibility vested in him or her if the award is not en-
forceable,136 because the ‘enforceability of the award [. . .] is [. . .] the raison d’être of the ar-
bitration process’.137 In the author’s opinion, rendering an enforceable award means that the
award should not only be accepted as a valid award by the courts of the seat,138 but also that
it is likely to be enforceable in other relevant national legal orders.139 For this reason, the au-
thor believes that the arbitrators’ duty to render an enforceable award is the cornerstone of
the multilocal approach. The award of course does not have to be enforceable in every single
jurisdiction worldwide, but at least in the jurisdictions connected to the case at hand or
where the parties are likely to present the award for enforcement.140 Under these parameters,
when arbitrators embrace the multilocal representation of arbitration, they give the best
chance for their award to be enforceable in a plurality of legal orders besides the seat of
arbitration.
Applying this approach to international sanctions, arbitrators adhering to a multilocal rep-
resentation of international arbitration will not only consider the public policy rules of the
129
Paulsson (n 96) 10.
130
Arthur T von Mehren, ‘Limitations on Party Choice of the Governing Law: Do They Exist for International Commercial
Arbitration?’ (Lecture delivered at Tel Aviv University 1986) 19–20.
131
Gaillard (n 22) 25.
132
As rightly noted by J Paulsson, ‘Article V(2) of the New York Convention plainly leaves it to any of a multitude of en-
forcement fora to evaluate the conformity of an award with their particular conceptions of arbitrability or public policy. It is im-
possible to deny that the plurality of legal orders that may give effect—or not—to arbitration agreements and awards is not a
theory’ (Paulsson (n 96) 10).
133
Mayer (n 23) 277.
134
Martin Platte, ‘An Arbitrator’s Duty to Render Enforceable Awards’ (2003) 20 J Intl Arb 307; Fernando P Lozada, ‘Duty
to Render Enforceable Awards: The Specific Case of Impartiality’ (2016) 27 Spain Arb Revj Rev Club Esp Arb 72; Günther J
Horvath, ‘The Duty of the Tribunal to Render an Enforceable Award’ (2001) 18 J Int Arb 135.
135
Nigel Blackaby, Constantine Partasides and Alan Redfern, Redfern and Hunter on International Commercial Arbitration
(7th edn, Oxford 2020) para 9.141.
136
Julian DM Lew, Applicable Law in International Commercial Arbitration: A Study in Commercial Arbitration Awards
(Oceana Publications 1978) 537.
137
Yves Derains and Eric Schwartz, A Guide to the New ICC Rules of Arbitration (Kluwer Law International 1998) 353.
138
Interestingly, art 32.2 of the 2020 LCIA Arbitration Rules provides for such duty to render an enforceable award, but
only targets the seat of arbitration, stating that the arbitral tribunal ‘shall make every reasonable effort to ensure that any award
is legally recognised and enforceable at the arbitral seat’ (underlying added).
139
Contrary to the LCIA Arbitration Rules, art 42 of the 2021 ICC Arbitration Rules does not make any difference between
the seat of arbitration or the potential jurisdictions of enforcement, providing that ‘the arbitral tribunal shall act in the spirit of
the Rules and shall make every effort to make sure that the award is enforceable at law’; In a similar vein, see also art 2(2) of
the 2023 SCC Arbitration Rules.
140
These jurisdictions are usually the jurisdiction where the parties are incorporated or have located their assets, the jurisdic-
tion where the is located the assets or project object of the dispute, etc. Of course, arbitrators do not always have this informa-
tion and might legitimately ignore where the award will be presented for enforcement.
166  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

seat of arbitration but might also take into account—as a matter of overriding mandatory
rules—the sanctions enacted by the plurality of legal orders connected to the dispute or

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where the award is susceptible to be presented for enforcement.141 In this regard, one author
suggests that in case of extraterritorial sanctions adopted by different States and susceptible
to impact the legal situation object of a given dispute, arbitrators will be tempted to rather
consider the sanctions which are likely to impact the arbitral award the most, being the
norms from the seat of arbitration and from potential award enforcement forums.142
Consequently, and compared to the territorial approach, arbitrators embracing the multilocal
approach are likely to enforce international sanctions enacted against Russia by a wider range
of legal orders since many of them could potentially be connected to the dispute presented
before them.
Continuing with our previously discussed hypothetical scenario, under the multilocal ap-
proach, an international arbitral tribunal sitting in New Delhi would not only consider the
Indian public order but might also take into account the sanctions enacted by the EU or the
USA as a matter of mandatory norms if a party is based or if its assets are located in one of
these legal orders because they are potential forums for enforcement purposes.
Consequently, arbitrators following the multilocal approach are likely to enforce interna-
tional sanctions enacted by various jurisdictions, so long as they are connected—especially
for enforcement purposes—to the dispute at stake.
However, this approach does not insure consistent enforcement of international sanctions.
Indeed, under the multilocal approach, the application of mandatory public policy rules
enacted by the national legal orders connected to the dispute might depend on the sole geo-
graphical situation of assets susceptible to be attached for the execution of the award,143 and
therefore, will be very much conditioned by factual considerations. Also, at the time of mak-
ing the award, arbitrators are not always aware of the place where enforcement might be
sought.144 Moreover, this method ‘consists in cumulating the imperative claims of all laws in
play’ and thus generally ‘leads to the blind application of the most restrictive rule’, resulting
in defavorem arbitrandum.145 Thus, the author of this article believes that, while the multilocal
approach ensures broad enforcement of international sanctions, the application of mandatory
rules is more coherent and global when international arbitrators follow the transnational ap-
proach, which will be discussed in the next section.

Enforcement of international sanctions by international arbitrators as overriding

mandatory rules under the transnational approach
Last but not the least, the aim of this article is to advocate for the enforcement of interna-
tional sanctions against Russia as a matter of transnational public policy rules. While the rec-
ognition of a detached arbitral legal order has been criticized many times,146 international
arbitrators usually embrace a transnational approach when it comes to assessing the
141
For the argument that arbitrators should respect to public policy of the potential places of enforcement in order to render
an enforceable award, see Horvath (n 134) 148; Serge Lazareff, ‘Mandatory Extraterritorial Application of National Law’
(1995) 11 Arb Intl 541.
142
Malik Laazouzi, ‘Contrat international et contrôle d’office du respect par l’arbitre des mesures de sanctions internatio-
nales et européennes visant certains secteurs économiques d’un État étranger’ (2020) 4 Rev Cont 60.
143
Christophe Seraglini, ‘Lois de police et justice arbitrale internationale’ (Nouvelle Bibliothèque de Thèses, Dalloz 2001)
397.
144
Garima Shahani, ‘Impact of Sanctions under the CISG’ (2015) 33 ASA Bull 854.
145
Gaillard (n 22) 35, 119.
146
For eg, English courts expressed a hostile attitude towards the delocalized approach, defining ironically such concept as
an ‘arbitral procedures floating in the transnational firmament, unconnected with any municipal system of law’ (see Bank
Mellat v Helliniki Techniki [1984] QB 291, 301; Naviera Amazonica Peruana SA v Compania International de Seguros del Per,
Court of Appeal, 10 November 1987, unreported. Reprinted in XIII YB Com Arb 156, 159–60 (1988)). For a doctrinal rejec-
tion of such concept, see also Mann (n 96) 244.
 International sanctions enacted against Russia as overriding mandatory rules  167

applicability of overriding mandatory rules to a dispute presented before them. Under the
‘autonomous arbitration’ theory,147 the arbitral process transcends national legal orders and

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therefore, its legitimacy is not derived from any national legal order in particular.148 The le-
gitimacy of the arbitral process is derived from the acknowledgement of a transnational legal
order, the so-called ‘arbitral legal order’.149 Undoubtedly, many arbitrators embrace at least
one feature of such an approach: the application of transnational public policy rules.150
When facing public policy rules, international arbitral tribunals will generally only enforce
mandatory norms they deem to be truly international public policy rules.151 Many authors
advocate for the constant enforcement of rules belonging to a truly transnational public or-
der,152 also defined by a French author as lex publica.153 To the partisans of this approach,
the application of transnational public policy rules is more than a method; it is also a moral
duty resulting from the judicial function of international arbitrators. According to P Lalive,
the arbitrator’s function has evolved from only deciding whether a request for arbitration is
admissible or not, to also ensuring the protection of the superior interests of the international
community.154 As noted by GA Bermann, international arbitrators adjudicate private dis-
putes but still hold a public role and function to perform regarding underlying mandatory
rules, regardless of their origin.155
Interestingly, under such an approach, international arbitrators generally do not feel
obliged to respect the public policy rules enacted by any particular legal order. On the con-
trary, they are likely to use a comparative method—as opposed to the conflictual method—
to identify overriding legal norms applicable to the dispute at stake,156 as a matter of funda-
mental transnational public policy rules. Thus, a mandatory rule is not given effect due to its
origin—ie, because it was enacted by the seat of arbitration or by a potential forum of en-
forcement– but rather for its substance. This representation triggers a radical switch from a
formal to a substantive approach. As accurately summarized by an author:

Unlike domestic courts, arbitrators owe no allegiance to any State’s command that its over-
riding mandatory rules must be given effect. They have the authority to give effect to over-
riding mandatory rules that meet certain conditions and are bound to give effect only to
overriding mandatory rules that incorporate principles of transnational public policy, which
is not the case of all overriding mandatory rules.157

147
Defined under these terms by Julian DM Lew, in Julian DM Lew, Applicable Law in International Commercial Arbitration:
a Study in Commercial Arbitration Awards (Dobbs Ferry: Oceana 1978) 51–66; see also Loukas A Mistelis, ‘Award as an
Investment: The Value of an Arbitral Award or the Cost of Non-Enforcement’ (2013) 28 ICSID Rev 64.
148
See Raquel M Moreira, ‘The Détachement of International Arbitration: Reflections on the Existence of an Arbitral Order
Détaché’ (2016) 8 Rev Bras Arb 78 ; Chevalier (n 95).
149
Gaillard (n 22) 13–60.
150
For the argument that this transnational approach is now the most favoured by international arbitrators, see Fouchard
and Goldman (n 18) 855–56.
151
For a detailed explanation of the notion of transnational public policy, see generally Catherine Kessedjian, ‘Transnational
Public Policy’ in Albert J van den Berg (ed), International Arbitration 2006: Back to Basics? (ICCA Congress Series, Kluwer
Law International 2007) vol 13, 857–70.
152
For the acknowledegment of a truly transnational public order, see Lalive (n 79) 313–15.
153
Xavier Boucobza, ‘La prise en compte des intérêts de l’Etat dans le commerce international’ (2005) 2 Rev Arb 481 (Ces
valeurs s’expriment par plusieurs vecteurs. A l’instar de la lex mercatoria composée d’usages, de principes généraux, de coutumes, la lex
publica est composée de plusieurs catégories de normes: lois de police véritablement internationales, principes généraux du droit, codes
de conduits. . .Autant de normes qui n’ont pas vocation à satisfaire l’intérêt des opérateurs du commerce international, mais celui des
Etats).
154
Lalive (n 79) 296–97.
155
George A Bermann, ‘Mandatory Rules of Law in International Arbitration’ (2007) 18 Am Rev Intl Arb 8.
156
For a criticism of the conflictual method as opposed to the comparative method applied by international arbitrators un-
der the delocalized representation of international arbitration, see Emmanuel Gaillard, ‘L’ordre juridique arbitral: réalité, utilité
et spécificité’ (2010) 55 Mc Gill LJ 897.
157
da Silveira (n 116) 123.
168  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

However, as the main inconvenience, this approach presents difficulties in establishing a

given principle’s universality.158 A possible method suggested by various authors, but which

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does not reach international consensus,159 consists in applying private international law rules
to determine overriding mandatory rules, despite the fact that the original scope of applica-
tion of private international law rules is limited to court proceedings.160 Article 7 of the
Convention on the Law Applicable to Contractual Obligations, 1980,161 now replaced by the
Rome I Regulation,162 was deemed to be expressive of international solidarity,163 and to be a
useful guideline for arbitral tribunals confronted with economic sanctions of third States.164
Article 9(3), ‘overriding mandatory provisions’, of the Rome I Regulation provides that:

1) Overriding mandatory provisions are provisions the respect for which is regarded as
crucial by a country for safeguarding its public interests, such as its political, social or
economic organisation, to such an extent that they are applicable to any situation fall-
ing within their scope, irrespective of the law otherwise applicable to the contract un-
der this Regulation.
2) Nothing in this Regulation shall restrict the application of the overriding mandatory
provisions of the law of the forum.
3) Effect may be given to the overriding mandatory provisions of the law of the country
where the obligations arising out of the contract have to be or have been performed, in
so far as those overriding mandatory provisions render the performance of the contract
unlawful. In considering whether to give effect to those provisions, regard shall be had
to their nature and purpose and to the consequences of their application or non-
application. (emphasis added)

Following this source of guidance, international arbitral tribunals would consider foreign
mandatory rules to be part of the truly transnational public order by assessing their ‘nature
and purpose’, which should share universal values widely recognized by the international
community. For example in ICC Case No 21390, the Tribunal did not proceed with any for-
mal legal test but rather conducted a direct approach and reasoned by reference to Article
9(1) of the Rome I Regulation. The Tribunal applied Guinean public policy rules as

158
Andrew Barraclough and Jeff Waincymer, ‘Mandatory Rule of Law in International Commercial Arbitration’ (2005) 6
Melb J Intl L 217.
159
For a dissenting opinion, suggesting that this sole method is not sufficient, see Florian Kremslehner and others, ‘The
Arbitrator and the Arbitration Procedure, Economic Sanctions in International Commercial Arbitration: A Guide for
Practitioners, by Practitioners’ in Christian Klausegger and others (eds), Austrian Yearbook on International Arbitration 2022
(Manz’sche Verlags- und Universitätsbuchhandlung 2022) vol 2022, 110.
160
Taejoon Ahn, ‘The Applicability of Economic Sanctions to the Merits in International Arbitration Proceedings: With a
Focus on the Dynamics between Public International Law Principles, Private International Law Rules and International
Arbitration Theories’ (2018) 299 PEPP Disp Resol LJ 309; Marc Blessing, ‘Mandatory rules of Law versus Party Autonomy in
International Arbitration’ (1997) 14 J Intl Arb 23, 31; Barraclough and Waincymer (n 158).
161
art 7 ‘Mandatory Rules’ of the 1980 Rome Convention on the law applicable to contractual obligations provided that: ‘1.
When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another
country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must
be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard
shall be had to their nature and purpose and to the consequences of their application or non-application.
2. Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they
are mandatory irrespective of the law otherwise applicable to the contract’ (emphasis added).
162
Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to
contractual obligations [2008] OJ L 177.
163
Ahn (n 160) citing Ole Lando, ‘The Law Applicable to the Merits of the Dispute’ in Petar Sarcevic Essays on
International Commercial Arbitration (Sarcevic edn, Graham & Trotman 1991) 159.
164
Ahn (n 160) citing Karl-Heinz Bockstiegel, ‘Applicable Law in Disputes Concerning Economic Sanctions: A Procedural
Framework for Arbitral Tribunals’ (2014) 30 Arb Intl 605, 609; Bernardo Cortese, ‘International Economic Sanctions as a
Component of Public Policy for Conflict-of-Laws Purposes’ in Laura Picchio Forlati and Linos-Alexander Sicilianos (eds),
Economic Sanctions in International Law (Brill Academic Publishers 2004) 728–29.
 International sanctions enacted against Russia as overriding mandatory rules  169

overriding mandatory rules, irrespective of the applicable lex contractus, because such rules
safeguarded a ‘public interest’.165

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Another method suggested by the legal doctrine consists in applying a specific legal test to
evaluate whether a public policy rule qualifies as an overriding mandatory rule under the
transnational approach. For example, N Voser identified (i) transnational public policy rules,
(ii) universally recognized legally protected interests, and (iii) strong public interests of the
concerned States or supranational entities as being relevant guidance.166 Specifically, about
international sanctions, MA Da Silveira suggested that international arbitrators should apply
trade sanctions when (i) these overriding mandatory rules are an appropriate means of
achieving a legitimate purpose, that (ii) there exists a close connection between the contrac-
tual dispute and the enacting State, and finally that there is (iii) a prevalence of the benefits
of a decision to give effect to an overriding mandatory rule over those of a decision disregard-
ing it.167
Generally, issues such as bribery, money laundering, and fraud,168 or rules pertaining to
the exportation of cultural goods,169 are considered as part of the ‘transnational public pol-
icy’. Furthermore, sanctions enacted by the United Nations are also generally considered
part of the universal public order that international arbitrators should promote.170 For exam-
ple, an arbitral tribunal seated in Switzerland suggested that an embargo measure from the
United Nations Security Council would be part of the ‘universal public order’.171 On the
contrary, rules that protect a purely national interest are unlikely to be enforced by interna-
tional arbitral tribunals under the transnational approach. For example, in ICC Case No
15972, the Arbitral Tribunal stated that:

[the Tribunal] do[es] not need to apply foreign mandatory rules which merely serve to en-
force national economic or political interests, however, close the connection of the case to
that country may be.172

Consequently, under the transnational approach, international arbitrators will probably en-
force international sanctions if they have been enacted by a sufficient majority of legal sys-
tems, and/or if they aim at promoting fundamental values of the international community,
such as peace around the world. With regards to the various sets of international sanctions
enacted by a plurality of legal orders against Russia, the author does believe that they inte-
grate the transnational ordre public since they aim at putting an end to the war in Ukraine
and thus, are safeguarding peace, which is a universal value.
165
ICC Case No 21390, Final Award dated 22 November 2017, paras 119–21 (‘A State which legislates in the field of public
contracts pursues public interest goals such as the transparency of the procedures and the equal treatment of candidates, which
require that the rules relating to the conclusion of public contracts mandatorily impose themselves on all the public buyers and
economic operators they target. These rules are clearly rules intended to be immediately applicable, regardless of the law appli-
cable to the contract. They are therefore overriding mandatory rules’).
166
Voser (n 116) 319, 348–55.
167
da Silveira (n 116) 207–38.
168
M Cremades Sanz-Pastor and David JA Cairns, ‘Trans-national Public Policy in International Arbitral Decisionmaking:
The Cases of Bribery, Money Laundering and Fraud’ in Dossier of the ICC Institute of World Business Law: Arbitration- Money
Laundering, Corruption and Fraud 1 (Arbitration- Money Laundering, Corruption and Fraud, Kluwer Law International
Chamber of Commerce 2003) 65–91.
169
Christian Armbrüster, ‘La revendication des biens culturels du point de vue du droit international privé’ (2004) 93 Rev
Crit DIP 741; Bernard Audit, ‘Le statut des biens culturels en droit international privé français’ (1994) 46 Rev Int Dr Comp
405; Paul Lagarde, ‘Droit privé interne et international: rapport général’ in La protection des biens culturels (journées polonaises
1991) 95; Guido Carducci, La restitution internationale des biens culturels et des objets d’art (1997) (préf. Paul Lagarde, LGDJ,
coll. Droit des affaires 1997).
170
Szabados (n 66) 440; Régis Chemain ‘Sanctions Economiques : Contre-mesures, Boycott, Embargo, Blocus—Embargo’
in Encyclopédie Dalloz du Droit International (2021) 187.
171
Reported in Berverly Overseas SA v Privedna Banka Zagreb, arrêt du 28 mars 2001, 4c.172/2000, BullASA 2001. 807.
172
Final award, ICC Case No 15972, ICC Disp Res Bull 2016 No 1
170  Journal of International Dispute Settlement, 2024, Vol. 15, No. 1

Referring again to the practical example given earlier, under the transnational approach,
even if an arbitral tribunal sits in New Delhi where no sanctions have been enacted against

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Russia, international sanctions enacted by other legal orders would probably be enforced by
the arbitral tribunal if it considers that these sanctions are constitutive of transnational public
policy rules. In the author’s opinion, the current sanctions that have been enacted against
Russia have reached an international consensus and aim at protecting universal values safe-
guarded by international law. Therefore, they are constitutive of transnational public policy
and should consequently be enforced by arbitral tribunals.173
Therefore, the transnational approach is likely to ensure worldwide enforcement by arbi-
trators of the various sets of international sanctions enacted against Russia, irrespective of the
seat of arbitration, the applicable laws or the potential enforcement forums, unlike the terri-
torial and multilocal representations. Indeed, the territorial approach ensures the enforce-
ment of international sanctions enacted against Russia as a matter of overriding mandatory
rules but only provided that they have been enacted by the seat of arbitration or that they
are recognized as mandatory foreign norms by the national courts of such seats. Parties could
thus easily bypass these sanctions by choosing an action-neutral seat of arbitration. Also, the
multilocal approach requires that, if not enacted by the seat itself, such sanctions against
Russia are part of the public policy of at least some forums where the award may be pre-
sented for enforcement purposes. In the author’s opinion, the transnational approach is the
representation that better ensures the enforcement of the recent international sanctions
enacted against Russia: as a matter of transnational public policy rules.
Inevitably, the scope of the mandatory application of these international sanctions will
highly depend on whether the arbitral tribunal embraces a territorial, multilocal, or transna-
tional legal representation of international arbitration.

CONCLUSION
As the reader may have understood, attempting to give a definite answer on such a complex topic
is not an easy task considering the current legal framework. Necessarily, the reasoning of interna-
tional arbitral tribunals having to decide whether they shall enforce international sanctions as a
matter of public policy rules when adjudicating the merits of a given case—including sanctions
enacted by other jurisdictions than the seat of arbitration—depends to some extent on the
position of domestic courts since the latter has supervisory power over arbitral awards. For this
reason, this article suggests a two-step method to be followed by international arbitral tribunals.
Starting from the postulate that international sanctions apply as a matter of mandatory rules, this
method consists in first assessing the view of domestic courts of relevant legal orders concerning
the mandatory nature of international sanctions enacted against Russia. In a second time, based
on the existing theories of international arbitration, the Tribunal should then decide what weight
it should give to the views of domestic courts on the matter.
A comparative analysis of the position adopted by domestic courts of various legal orders
concerning the enforcement of international sanctions shows that there exist many inconsis-
tencies on the matter. First, international sanctions against Russia have been enacted by
several legal orders, but a great majority of States have remained politically neutral and have
not enacted any sanctions against Russia. International sanctions are thus not part of the na-
tional public policy rules of many States. Secondly, domestic courts have different approaches
regarding the integration of foreign public policy rules under their conception of lois de police.
173
See A Mazuera, ‘Should Arbitral Tribunals Apply Sanctions Against Russia as Overriding Mandatory Rules?’ (Kluwer
Arbitration Blog, 9 April 2022) <http://arbitrationblog.kluwerarbitration.com/2022/04/09/should-arbitral-tribunals-apply-
sanctions-against-russia-as-overriding-mandatory-rules/> accessed 13 January 2023.
 International sanctions enacted against Russia as overriding mandatory rules  171

On one hand, some jurisdictions are ready to enforce foreign public policy rules—such as in-
ternational sanctions—provided that they comply with certain conditions. But on the other

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hand, other jurisdictions, such as India, have a national approach toward the notion of public
order and therefore, are not willing to enforce foreign public policy rules during post-award
control proceedings.
Besides, international arbitral tribunals have no forum and are not legally bound, like the
judiciary, to enforce the public policy considerations of any legal order. For this reason, the
author believes that the reasoning of international arbitral tribunals depends on the legal rep-
resentations of international arbitration. An analysis of the various legal theories of interna-
tional arbitration (the three dimensions) shows under which parameters and on which legal
basis international arbitral tribunals tend to enforce public policy rules. While arbitrators em-
bracing the territorial approach will be tempted to enforce international sanctions only pro-
vided that they are part of the public order of the seat of arbitration, the partisans of the
multilocal approach will seek to ensure global enforceability of their arbitral award by consid-
ering public policy rules from other relevant legal orders depending on the views of domestic
courts.
A third approach, which is, nowadays, approved by a large majority of arbitration practi-
tioners and academics (including the author of this article) due to the transnational features
of international arbitration, consists in enforcing public policy as a matter of transnational
public policy rules. This is the approach that, in the author’s opinion, should be embraced by
international arbitral tribunals when deciding whether they should mandatorily enforce rele-
vant international sanctions. Under this approach, international sanctions are enforced pro-
vided that they qualify as transnational public policy rules. It is argued that, since the current
sets of international sanctions against Russia aim at putting an end to the war, to safeguard
international law and transnational values such as peace or human rights, they should qualify
as transnational public policy rules. Thus, when applicable, international sanctions against
Russia should be enforced by international arbitral tribunals as a matter of mandatory rules
belonging to the transnational public order irrespective of the law governing the merits of
the case, the seat of arbitration, or consideration of any specific legal order.