Arbitration in Times of Russia’s Invasion

After decades of stability after the horrors and destruction of World War 2, Europe finds
itself again in the catastrophe of war. The Russian invasion of Ukraine last year has brought
in a negative cascade effect in all remote corners of the world. Pre-existing commercial
contracts between Russia and the rest of the world has come under intense pressure
particularly due to the swift imposition of economic sanctions by the West and the
withdrawal or suspension of business by companies such as Mcdonalds, Starbucks etc.
Various fast food and drinks companies, retail companies, consultancy companies have
seized their operations in Russia due to the ongoing conflict. This has left numerous contracts
being suspended or terminated under contractual force majeure  frustration, and/or sanctions
and export control clauses, as well as on equivalent statutory bases.

Russia to counter this and to protect its interests took various steps one of them being that in
the first few months after Putin declared war on Ukraine, Putin proposed a bill that would
enable state owned bank and export gurantee agency take over assets of foreign businesses
leaving or suspending business in Russia. This now has brought in arbitration into play as
these foreign investors have invested heavily in Russia and want to protect their assets. The
measures taken by Russia would make these investors incur heavy financial losses.

This paper will mainly dive into the arbitrability of his whole conundrum. It will dive into
what kind of cpotential laims can be made by the foreign investors who have their
investments damaged in Ukraine by Russia’s invasion and the damage caused to them in
Russia. It will also dive into the potential claims against the measures made by Russia against
the foreign investors.

Russia’s Economic Measures Imposed on Foreign Investors

Many foreign companies and firms particularly from the west who had their operations
in Russia quickly decided to withdraw or suspend their operations in Russia after the
invasion. The west was also swift in imposing strigent economic sanctions on Russia
which affected Russia’s economy.