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When Western sanctions collided with Russian courts, judges faced a stark dilemma: should geopolitics rewrite centuries鈥憃ld doctrines of force majeure?

The Western Sanctions and the Breakdown of Transnational Deal-Making听

After Russia鈥檚 2022 of Ukraine, companies are said to have exited Russia due to or retaliatory measures like under the 鈥�.鈥� This list, first introduced by the Russian government in May 2021 with only (the United States and the Czech Republic), and formally expanded in May 2022, designates states that have adopted sanctions against Russia and authorizes Russian authorities to impose restrictive measures on entities from those jurisdictions, including capital controls, asset freezes, and forced transfers of ownership. As these companies exited, a wave of contractual disruptions followed: long-standing trade relationships, whether involving Russian imports or exports, were abruptly severed by the harsh realities of sanctions. This upheaval left numerous previously unremarkable contracts suddenly caught in a geopolitical crossfire, with parties in both Russia and abroad unable or unwilling to perform.听

For judges and arbitrators confronted with disputes over supply-chain disruptions, a central challenge has been how to of economic sanctions for the parties, particularly regarding relief from liability for breach of contract on the part of the seller or service provider. Taking transnational commercial disputes post-2022 involving Russian entities as a vantage point, this blog post explores how Russian courts have handled contract breaches following sanctions and involuntary market exit, endeavoring to discern how Russia鈥檚 legal framework in recent years has addressed the tension between private obligations and geopolitical disruption.听

Force Majeure in the Context of International Sanctions听

Traditionally, the legal principle of is widely recognized in both civil law and common law jurisdictions as shielding parties from liability for non-performance caused by events beyond their control, provided such events are extraordinary, unavoidable, and unforeseeable (for example, , Art. 7.1.7). In Russia, this principle is codified in the Russian Civil Code (RCC), which has governed civil and commercial relations since its adoption in 1994. According to the , a person shall not be liable for non-performance or undue performance of its obligations if the performance of these obligations is impossible due to an 鈥渋rresistible force,鈥� i.e., an 鈥渆xtraordinary鈥� and 鈥渋nevitable鈥� event in the . Before 2022, this doctrine sufficed for pandemics or storms, but the Russia-Ukraine war has witnessed sanctions dragging commercial activities into a 鈥溾�� and 鈥溾�� supercycle: Western governments have explicitly crafted their sanctions regimes to , while Russia鈥檚 aim to penalize foreign firms and protect domestic oligarchic interests.听

Russia鈥檚 unique legal stance on force majeure in sanctions-related disputes is grounded in its 2020 鈥溾��, which allows sanctioned parties to sue in Russian courts even when they have agreed to have their disputes decided elsewhere. Although parties may include an international arbitration clause in their contracts to exclude potential disputes from domestic court jurisdiction, since the , handed down by the Russian Supreme Court in December 2021, the in Russia presumes that any arbitration clause in disputes complicated by sanctions is unenforceable. Further, the 2024 Russian Supreme Court ruling in Case presumes bias in arbitral tribunals composed of arbitrators from 鈥渦nfriendly鈥� states, thereby complicating the enforcement of foreign awards. In the current enforcement environment, if Russian authorities believe that a foreign arbitral tribunal will lack judicial remedies, it is difficult to predict how Russian courts will resolve jurisdictional issues. Therefore, corporations must understand how Russia鈥檚 public policy framework applies judicial scrutiny to force majeure defenses within its evolving sanctions.听

The Russian Courts鈥� Approach听

Public-Policy Approach at the Start of the War (2022)听

In the immediate months following the outbreak of Russia鈥檚 full-scale invasion of Ukraine in February 2022, the Russian courts adopted a , ruling that foreign sanctions could not be considered in breach of contract cases because they were deemed contrary to Russian public policy. Accordingly, the foreign sanctions were categorically classified as a commercial risk of the defaulting party rather than as force majeure, on which the defaulting party could otherwise rely.听

Part of Judicial and Arbitral Cases on Sanctions as Force Majeure (as of June 14, 2022)听

This stance was manifested in , a decision handed down by the Russian Thirteenth Arbitration Appellate Court in July 2022. The parties had contracted in 2020 for the supply of goods manufactured by Hammer Werkzeug, a company based in the Czech Republic. In February 2022, after the imposition of restrictive measures by the United States against Russian individuals and companies, the Czech supplier ceased deliveries, and the Russian buyer stopped payment. The Appellate court declared that such foreign sanctions and supplier disruptions did not constitute force majeure or justify non-performance because entrepreneurial activity is carried out at one鈥檚 own risk and the defendant did not prove that performance was objectively impossible, and therefore ordered the buyer to pay the outstanding sums and the contractual penalty.听

In , another landmark case by the Russian Supreme Court, reaffirmed the from the Russian Ninth Arbitration Appellate Court in August 2022. Patentes Talgo, a Spanish rolling-stock supplier, sought payment for spare parts after Spain鈥檚 adoption of EU sanctions. The Russian Supreme Court ruled that a foreign party鈥檚 compliance with EU sanctions does not exempt it from liability for breach of contract and that a contracting party acting in good faith has a diligence obligation to reorganize the logistics chain.听

A conservative approach to foreign sanctions remains prevalent in the Russian judiciary in 2022. The Russian Chamber of Commerce and Industry鈥檚 and proposed amendments under draft law (although ) reflect this trend: rejecting the notion that foreign sanctions can constitute force majeure unless explicitly adopted in domestic legislation, underscoring the state鈥檚 unwillingness to allow external influence to excuse non-performance by sanctioned foreign parties.听

Emerging Positive Trends: Shift Towards Acceptance (2023)听

A more optimistic shift emerged in 2023, as Russian legal institutions started to move away from their earlier categorical rejection of sanctions as force majeure events. This shift was marked by the Russian Chamber of Commerce and Industry鈥檚 adoption of the 鈥溾�� in 2023. of this regulation explicitly includes national prohibitory measures and trade restrictions due to international sanctions as force majeure events.听

This reform has begun to manifest in court decisions issued in 2023. In , a decision handed down by the Russian Ninth Arbitration Appellate Court in March 2023, a Russian agricultural company sued the bank for failing to process a cross-border payment to a Paraguayan supplier due to U.S. sanctions. The Court ruled that the sanctions constituted force majeure under the , absolving Alfa-Bank of liability since the bank could not have reasonably anticipated its when executing the transaction.听

In , another decision by the Russia Thirteenth Arbitration Appellate Court in April 2023, a Dagestan-based trader sought compensation from VTB after the bank failed to execute a CNY payment to a Chinese supplier, citing EU SWIFT sanctions and Russian counter-sanctions. The Court upheld VTB鈥檚 force majeure defense, emphasizing that the sanctions were beyond the bank鈥檚 control and met the criteria of extraordinary and unavoidable circumstances under RCC 401(3).听

The Russian Chamber of Commerce and Industry鈥檚 formal reorganization provides a structured legal channel for businesses to obtain relief. Courts have also recognized that sanctions are now a widely acknowledged geopolitical reality; therefore, their extraordinary and unavoidable nature , meaning parties need only demonstrate actual impediment. Together, these dynamics reflect a judicial recalibration from early denial to a more balanced approach that leverages formal certification processes and assumes acknowledgment of Western sanctions, yet still filters claims via traditional force majeure criteria.听

Recent Trends: Growing Judicial Reluctance (2024-2025)听

In more recent rulings, however, a troubling trend has emerged where sanctions imposed in the past two years are no longer automatically recognized as force majeure. In , a decision handed down by the Moscow Arbitration Court in January 2024, a Russian lessor (Erfolg Energo) failed to deliver a leased thermal power plant, citing EU sanctions that disrupted equipment imports from Germany. The Moscow Arbitration Court rejected the force majeure defense, ruling that the ongoing sanctions (since 2014) were foreseeable business risks, not extraordinary circumstances under Russian law, and ordered full penalty payments.听

In , a decision by the Russian Ninth Arbitration Appellate Court in February 2025, claimed force majeure due to sanctions blocking critical imports. The Russian Supreme Court the lower court鈥檚 rejection in June 2025, emphasizing that unless a force majeure clause is expressly included in the contract and a clear causal link is demonstrated, mere sanctions or trade barriers do not meet the RCC鈥檚 standard.听听

In , a decision by the Russian Fourth Arbitration Appellate Court in March 2025, a state contractor (Sintez) breached medical supply agreements, blaming sanctions for halting deliveries from Western firms like Abbott. The Court dismissed the defense, finding that since Russian military operations had commenced when the contract was signed, the sanctions were foreseeable and the defendant failed to propose alternative performance; therefore, sanctions did not qualify as force majeure.听

The tightening of force majeure defense measures related to sanctions reflects a deliberate judicial stance in Russia. Allowing broad force majeure relief would undermine Article鈥�401(3)鈥檚 high threshold for 鈥渟pecial and unavoidable鈥� obstacles, opening the door to opportunistic breaches masked by political turmoil. Russian courts have applying RCC Article鈥�451 to annul or amend contracts destabilized by sanctions. Instead, they invoke Article鈥�401(3)鈥攂ut only when the breach is truly unavoidable and unforeseeable, and the affected party has no ability to mitigate the impact. For contracts entered into after Russia鈥檚 military operation, companies should anticipate potential risks and explicitly include alternative arrangements in their contractual terms.听

Extracting Coherent Standards from Divergent Russian Court Decisions听

The current jurisprudence of Russian courts on sanctions-related disputes remains fragmented and unpredictable, necessitating a more balanced and principled approach to questions of judicial jurisdiction. This is not to suggest that individuals sanctioned by foreign states should be denied access to legal remedies within their own national courts. Rather, what is required are under which arbitration clauses may be rendered unenforceable. Commercial transactions of a relatively independent nature ought not to be unduly burdened by political overtones. In particular, merely because an arbitral institution is seated in a Western jurisdiction, it should not follow that jurisdiction is stripped, of arbitration. In such cases, parties incorporating relevant clauses into their agreements should at a minimum be able to rely upon clear rules.听

Currently, the approach courts take under RCC Article鈥�401(3) is uncertain. Courts frequently reject sanctions as constituting force majeure, yet in certain decisions acknowledge specific elements justifying such characterization. These inconsistencies provide no firm basis for determining whether sanctions can remedy contractual non-performance. This uncertainty both impedes domestic courts in delivering consistent jurisprudence and undermines the stability of international trade and the authority of international arbitration. also risk eroding trust in both domestic and international legal systems. When litigants perceive that legal outcomes are influenced by factors extraneous to the merits, their confidence in judicial institutions diminishes. This erosion of trust is likely to have longterm adverse effects on Russia鈥檚 economic integration into the global economy.听

It is, admittedly, difficult to attribute all uncertainty in judicial outcomes to Russian courts, given the still-volatile geopolitical environment. Courts often cannot quantify the severity of relevant sanctions. Nonetheless, continued instability in Russian judicial decisions is likely to , as companies become hesitant to trade or invest in environments where legal outcomes remain uncertain. Fortunately, a body of case-specific factual analysis now exists to guide interpretation. Upon reviewing numerous judgments, we can confidently identify common factors courts examine when determining whether sanctions constitute force majeure:听

While inconsistent judicial decisions can undermine the stability of international trade and arbitration, a case-by-case analysis grounded in factual circumstances offers a more reliable and equitable alternative. By focusing on the specific facts and evidence of each case, courts can render decisions that promote fairness, consistency, and trust in the legal system, thereby supporting the growth and stability of international commerce.听

Conclusion and Recommendations听

When seeking to rely on sanctions-related restrictions as a force majeure defense, companies should be aware that legislative recognition of such restrictions does not create a 鈥溾�� exemption for every Russian legal entity or individual entrepreneur. In practice, achieving the law鈥檚 intended effect requires a series of targeted, case-specific measures.听

First, organizations should audit existing agreements to identify ties to Russian or secondarily sanctioned entities. Each contract鈥檚 force majeure, hardship, export control, or termination provisions must explicitly envisage ; without such drafting, performance will rest on unstable ground.听

Second, when crafting future agreements, drafters should adopt precise language that anticipates the evolving nature of sanctions. Clauses ought to specify triggering events, delineate contingency steps, and require formal notification and good-faith negotiations before relief is sought.听

Third, entities must deploy real-time . Invoking force majeure without documentary support is doomed to fail; parties must be prepared to demonstrate bank refusals, regulatory directives, and actual logistical impossibility, not merely inconvenience or dread.听

Finally, organizations should align private contractual commitments with public compliance regimes. As sanctions law increasingly bleeds into civil liability, professional advisers play a crucial role in preventing compartmentalized legal risk. Contractual obligations are now integrally linked to dynamic regulatory landscapes and must be managed with holistic governance.听

Acknowledgements听
I am deeply grateful to Professor Peer Zumbansen, Professor of Business Law at 9I制作厂免费, for his continuous guidance and detailed feedback throughout the development of this blog. I also wish to thank Professor Chen Huanyun, Professor of Russian Language and Literature at Huazhong University of Science and Technology, whose instruction during the 2020-2021 academic year laid a foundation from which I continue to benefit profoundly.听

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