Herbert Smith Freehills LLP have published an article in the Journal of International Banking Law and Regulation on the implications of sanctions against Russia on banking disputes in the UK.
Since 2014, the UK, EU, US and other countries have imposed sanctions against Russia, which have been further expanded since 2022. These regimes are challenging for financial institutions to navigate. They are complex, inherently uncertain and ever evolving. Applying them to real-life situations often requires difficult judgment calls to be made, against the backdrop of potentially severe consequences if sanctions authorities subsequently take a different view and consider there has been a breach of sanctions.
In our article we examine the effects of sanctions on disputes involving financial institutions. There have been a number of interesting recent decisions which shed some light on the English court's approach to this area. Our article explores the willingness demonstrated by the court to allow contractual obligations to be fulfilled in ways which do not contravene applicable sanctions regimes, but which may go beyond the scope of a strict approach to the agreement between the parties. The approach taken by the court has the potential to increase the jeopardy for responsible financial institutions, likely to be inclined to take a cautious approach to fulfilling contractual obligations which might otherwise be regarded as breaching sanctions.
The article can be found here: Implications of sanctions against Russia on banking disputes in the UK. This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in the January 2024 edition of JIBLR and is reproduced by agreement with the publishers.
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