Russian judges on economic sanctions: balancing between protecting the national public order and business interests

In this article, the authors analyze emerging approaches of Russian courts (the Constitutional Court of the Russian Federation, commercial courts, and courts of general jurisdiction) for resolving disputes connected with economic sanctions imposed against Russia in 2014, as well as the legal qualification of relevant legal issues. The Russian courts take a clear stand that these economic sanctions are unlawful from the standpoint of international law. For this reason, the effect of foreign regulations and the relevant provisions of commercial contracts aimed at enforcing restrictions imposed by sanctions is being blocked in Russia on the basis of protecting the national public order. In this context, Russian case law is consistent with Russia’s general state policy aimed at denying the legitimacy of unilateral coercive measures, which are introduced without the authorization of the UN Security Council and are considered to be unfriendly actions by foreign states that threaten Russia’s sovereignty. At the same time, Russian courts try to mitigate the negative legal consequences of sanctions for Russian and foreign businesses in domestic jurisdiction. There is sufficient evidence to support the assumption that Russian courts try to use balanced approaches in relation to the legal responsibility for compliance with foreign sanctions by private individuals. Courts are rather neutral to contract provisions that are aimed at preventing conflicts caused by economic sanctions (sanction clauses), and also generally adhere to fair solutions in cases of non-performance of obligations caused by the prescriptions of sanctions. Courts distinguish the failure to perform obligations based on objective circumstances (force majeure, fundamental change of circumstances, and sanction clauses) and non-compliance with contractual and other duties for the reason of failure to act diligently or standard business risks.

About the authors: Vladislav Starzhenetskiy is a Сandidate of Sciences (Ph.D.) in Law, Associate Professor, Higher School of Economics, Moscow, Russia; Valeria Butyrina is a Research Intern, Faculty of Law, Higher School of Economics, Moscow, Russia; Iuliia Dragunova is a Graduate student, Faculty of Law, Higher School of Economics, Moscow, Russia.

Citation: Starzhenetskiy V., Butyrina V., Dragunova I. (2018) Ekonomicheskie sanktsii glazami rossiyskikh sudey: mezhdu zashchitoy publichnogo poryadka i interesov biznesa [Russian judges on economic sanctions: balancing between protecting national public order and business interests]. Mezhdunarodnoe pravosudie, vol.8, no.4, pp.126–139. (In Russian).

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