Russian Supreme Court ruling on exclusive jurisdiction over entities subjected to foreign sanctions

In June of last year we reported on developments in recent proceedings going through the Russian Courts concerning the application of a Russian law concerning exclusive jurisdiction over entities that are impacted by foreign sanctions.

In a recent ruling of the Russian Supreme Court, it has now set out a general interpretation of the that law which is likely to create a precedent and be applicable to any further cases to be resolved by Russian courts based on these provisions.

In summary, the Supreme Court held that if Restrictive Measures are imposed on a Restricted Party by a foreign authority, it will automatically be assumed that that Restricted Party will not be treated equally and/or fairly and/or impartially in foreign proceedings taking place in the state which imposed the Restrictive Measure. In such circumstances, the Russian state courts will have exclusive jurisdiction, and may grant an anti-suit injunction against the foreign proceedings.

Accordingly, parties who are concerned that entities which they contract with may be impacted by financial and other sanctions imposed on Russian individuals or companies, may well, at the same time as considering any other relevant aspects of their contractual arrangements from a sanctions compliance point of view, need to take the ramifications of this ruling into account when planning their dispute resolution provisions.