The practice of international commercial arbitration at KIAP Attorneys at Law has presented a major update to the study of the practice of applying Articles 248.1 and 248.2 of the Arbitrazh (Commercial) Procedure Code of the Russian Federation (the Lugovoy Law), prepared jointly with the Working Group on the Lugovoy Law. The world's leading international arbitration journal and news service Global Arbitration Review (GAR) published an article about the study.
The international arbitration forums most affected by applications under Russia's Lugovoy Law have been the UK, Sweden and Switzerland, with the majority relating to cases under LCIA, ICC and SCC rules, according to new research shared at an ICC Russia event in Moscow.
KIAP Attorneys at Law in Moscow has kept track of all 853 applications under the controversial 2020 law – officially Russian Federal Law no 171-FZ, amending the Commercial Procedure Code, but dubbed the Lugovoy Law after the Russian parliamentarian who was its primary author and promoter.
The law grants Russian commercial courts exclusive jurisdiction over legal disputes featuring sanctioned Russian individuals or entities, overriding pre-existing foreign forum selection clauses or international arbitration agreements. It has resulted in fierce jurisdictional battles as well as a multitude of competing anti-suit injunctions.
The research says that, since the Lugovoy Law was passed six years ago, there have been applications in relation to 331 international arbitration cases. The highest number of applications have been in relation to LCIA cases (99), then ICC cases (75) and SCC cases (44).
Stepan Sultanov, partner at KIAP Attorneys at Law, says the firm has made numerous appeals to the Russian Supreme Court and filed amicus curiae briefs to Russian and EU courts "to show that current battles between jurisdictions and measures and counter-measures arising from the Lugovoy Law are deterimental to international arbitration as we know it."
Anastasia Ryabova, associate at the firm, says that the number of Lugovoy Law cases has unexpectedly soared, with 17 cases per month on average, compared to nine per month before September 2024. She notes the many uses made of the law: "against Russian parties, between Russian parties, to override Russia-seated arbitration clauses and bankruptcy of foreign entities – the list goes on."
The full version of the material can be read in Global Arbitration Review (GAR) by following the link.