Is justice available to Russians in foreign jurisdictions?

December 6, 2022

In the past few months, we have often come across the opinion of clients and peers that, due to the current

political situation, it is impossible for Russian companies and individuals to obtain fair judicial protection in

foreign courts. However, practice shows that the situation is far from being so unambiguous. In this respect,

in our opinion, it is important to separate political affairs and ordinary commercial disputes (even if they

arose as a result of this year’s events). With regard to the latter, the courts of European and offshore

jurisdictions, in our experience, continue resolving cases on the basis of law and principles of justice,

without any preference given to non-Russian parties.

An important starting point is that, despite numerous sanctions, foreign states expressly declare the

preservation of the right of individuals to access to justice. For example:

the ban on the provision of legal advisory services, introduced on 6 October 2022 by the Council of the
European Union, does not expressly include any “representation, advice, preparation of documents or
verification of documents in the context of legal representation services, namely in matters or proceedings
before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation
proceedings”;
future UK sanctions, announced on 30 September 2022, will also only apply to legal services of a
transactional nature.

Of course, the existence of a formal declaration of a right (the right to a fair trial) does not in itself mean

that such right is actually granted (for example, sometimes there are difficulties with ensuring

representation in court). At the same time, based on the existing court practice, we can conclude that this

principle is de facto supported by foreign courts.

In this context, the best-known case is JSC VTB Bank v Alexander Katunin, in which a BVI Judge concluded

that “even pariahs have the right to defense” and ordered the Ogier law firm to continue representing the

Russian bank in court, despite the attempt to refuse representation. The Judge explained that the sanctions

imposed on the bank did not prevent further representation of its interests, since Ogier could obtain a

license to pay for their services and arrange for payments through countries where the imposed sanctions

do not apply.

As another example, in March 2022, the Dutch law firm Houthoff refused to continue representing the

Russian Federation in the case against PrivatBank. The Russian Federation applied for the appointment of a

mandatory representative to The Hague Chamber of Lawyers, but the application was denied. This denial

was successfully overruled by The Hague Court of Appeal.

Similarly, we note a gradual overcoming of technical problems with access to justice in foreign arbitrations:

on 17 October 2022, the UK authorized body granted the London Court of International Arbitration (LCIA) a
perpetual general license to receive payments from Russian entities subject to UK sanctions;
in practice, some foreign arbitral tribunals agree to administer cases despite the hindrances faced by
Russian parties upon transferring arbitration fees and making associated payments.

Finally, we see examples when foreign courts take the side of Russian parties when resolving issues on the

merits, including against European counterparties:

in one case, the court forbade changing the constitutional documents and using sanctions to limit the
corporate rights of a sanctioned participant in a European company, obliging the latter to accept and take
into account the votes of this participant on the proposed changes. The court concluded that taking the
votes of the sanctioned person on this issue into account did not undermine the goals of the sanctions
regulations and would not lead to the financing of the Russian Federation as a result of such voting;
in another case, a foreign court denied a major European company an attempt to dilute a stake of a
sanctioned Russian partner in a joint venture under the pretext of being unable to agree on the fate of the
joint business. Instead, the court appointed an independent director to the joint venture to resolve
commercial disputes between the parties;
with regard to the right to judicial protection, a foreign court, upon request of a Russian party, postponed
the hearing on the cancellation of the freezing order, agreeing that the delay of almost six months in issuing
a license to the representative of the Russian sanctioned party and the corresponding inability of such party
to prepare its position on the relevant issues in time, is a valid reason for adjourning the hearing.

Thus, despite the unfavorable political environment, we are witnessing an attempt by foreign courts to

neutralize the influence of the sanctions with regard to the access of Russian parties to justice.