September Digest: Increase in Successful Sanctions Challenges and Precedent on Access to Frozen Assets
September 2025 saw significant activity in the sphere of sanctions challenges. There has been a noted increase in successful court and administrative decisions to remove restrictions from individuals, while the European Union and the United Kingdom are preparing new packages of restrictions. A key event was a precedent-setting ruling by the Court of Justice of the European Union (CJEU) facilitating access to frozen assets for covering legal costs.
Main Topic: Successful Sanctions Challenges
· Trend: Courts continue to overturn sanctions imposed solely on the basis of familial ties. To maintain restrictions, authorities must prove that a specific benefit was derived from these connections.
· Notable Cases:
o Maya Tokareva (daughter of the head of Transneft): The CJEU once again annulled sanctions against her, yet the Council of the EU continues to list her.
o Pavel Ezubov (cousin of Oleg Deripaska): Achieved removal from the EU sanctions list after a series of successful court proceedings.
o United Kingdom: Former Sovcombank top manager Ilya Brodsky and Tatiana Evtushenkova (daughter of the founder of AFK Sistema) were removed from the UK sanctions lists through an administrative review (OFSI), a procedure experts note as being more effective.
Key Ruling: Access to Assets for Legal Costs
· Event: The CJEU ruled that sanctioned individuals have the right to unfreeze funds to pay state fees in court disputes.
· Essence of the Precedent: The Court recognized that access to justice and the ability to cover legal costs qualify as basic needs that should not be blocked by sanctions.
· Significance: This ruling removes a key practical obstacle to challenging sanctions in EU courts, enabling listed persons to effectively defend their rights.
New Sanctions: What to Expect
· European Union: A new package is being prepared, which will affect:
o 45 companies supporting Russia’s military-industrial complex.
o The Mir payment system and crypto platforms.
o Rosneft and Gazprom Neft (transaction ban).
o The “shadow fleet” (118 tankers).
· United Kingdom: In September, 11 individuals (including the mother of R. Kadyrov) and 30 companies were added to the lists.
Practice of Russian Courts: “Lugovoy Law” in Action
· Trend: Russian commercial courts are actively applying Article 248.1 of the Commercial Procedural Code (“Lugovoy Law”) to claim jurisdiction over disputes with counterparties from “unfriendly” countries, even in the presence of an arbitration clause.
· Examples:
o A court compelled an Italian company to litigate in the Moscow Commercial Court, despite a Paris arbitration clause.
o A court recovered an advance payment from a Finnish company that was frozen by Finnish authorities, ruling that sanctions do not constitute force majeure.
· Lawsuit against Wintershall Dea: The Moscow Commercial Court expanded an anti-suit injunction, extending it not only to the company itself but also to foreign arbitrators and their lawyers.
International Litigation
· Investment Arbitration:
o Inter RAO vs. Georgia: The ICSID ad hoc committee refused Georgia’s request to annul the arbitration award ordering payment of $76 million in favor of the Russian company.
o ExxonMobil vs. Russia: The company initiated arbitration concerning the seizure of its assets in the Sakhalin-1 project. The process is expected to be complex and lengthy.
· Recognition of Foreign Decisions in Russia:
o A trend has emerged towards the enforcement in Russia of decisions from courts and arbitrations in “unfriendly” jurisdictions, provided there are no direct legal grounds for refusal.
o Example: Courts permitted the enforcement of decisions in favor of Kazakh and Swiss companies, rejecting arguments about threats to national security.
Expert Commentary: “If we want Russian decisions to be enforced abroad, it is necessary to reciprocally enforce foreign decisions as well.”