On 16 December 2024, the EU adopted the 15th package
of sanctions against Russia. Notably, the inclusion of Article 11c
in Council Regulation (EU) No 833/2014, as amended by Regulation
(EU) 2024/3192, introduces additional protective measures to
safeguard European parties from legal actions in Russia. This
update builds on previous sanctions, strengthening protections
against legal actions stemming from Russia's ongoing
destabilizing activities in Ukraine.
Key Provisions of Article 11c
Article 11c introduces a prohibition on the recognition,
enforcement, or effect of any Russian court decision derived from
or related to Article 248 of the Russian Arbitration Procedure Code
(APC) or equivalent Russian legislation.
Specifically:
- Any injunctions, orders, reliefs, judgments, or other court decisions made under Article 248 APC will not be recognized or enforced in any EU Member State.
- The EU also prohibits the enforcement of criminal penalties or sanctions linked to any violation of Russian legal actions arising from Article 248 APC, including those related to injunctions or orders.
Understanding Article 248 of the Russian Arbitration
Procedure Code
Article 248.1 of the APC grants exclusive jurisdiction to Russian
arbitration courts over disputes involving foreign parties in
specific cases. These include disputes related to state property in
Russia, immovable property located within the Russian Federation,
intellectual property matters requiring registration in Russia,
invalidation of entries in state registers, and disputes related to
the establishment, liquidation, or registration of legal entities
or individual entrepreneurs in Russia.
Article 248.2 of the APC allows Russian arbitration courts to issue
anti-suit injunctions, prohibiting the initiation or continuation
of foreign court or arbitral proceedings against parties subject to
restrictive measures imposed by foreign states or international
organizations. If these injunctions are violated, the Russian
arbitration courts may impose fines up to the amount sought by the
opposing party in the foreign proceedings.
The EU has also voiced its unequivocal opposition to the manner in
which Russian courts issue anti-suit injunctions and fines,
characterizing these actions as a "clear violation of
established international principles and long-standing practices in
the resolution of international business disputes"
(Recital (8) of Regulation 2024/3192).
The Impact on EU Businesses
The inclusion of Article 11c strengthens the EU's sanctions
framework by ensuring that EU-based businesses are not required to
comply with Russian court decisions that conflict with EU
sanctions. This provision specifically prevents the enforcement of
Russian legal actions under Article 248 APC, protecting European
entities from potential legal challenges that could undermine the
effectiveness of EU sanctions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
