Dealing with War-induced Effects: Contractual Relationships and Economic Sanctions

Tamás Szabados

Chapter 6 in Private International Law and Global Crises, 2026, pp 111-147 from Edward Elgar Publishing

Abstract: The Russo-Ukrainian war has brought the issue of economic sanctions to the fore and highlights the role of private international law in contractual disputes. Sanctions intensify the use of exceptional tools such as overriding mandatory provisions, anti-suit injunctions and the public policy exception. This chapter argues that most sanctions-related questions can be suitably addressed by existing EU private international law rules. First, courts in EU Member States can apply EU sanctions against Russia as overriding mandatory provisions under the Rome I Regulation. By contrast, applying or giving effect to non-EU sanctions (often imposed by EU partners but sometimes exceeding EU measures) as part of the lex causae, the law of the place of performance, or at the level of substantive law raises uncertainties. Second, the reservation of exclusive jurisdiction of Russian courts in sanctions-related matters under the Arbitrazh Procedure Code disrupts the normal allocation of jurisdiction. The EU responded with a substantive law solution: introducing a transaction ban and admitting damages actions in the 14th sanctions package, going beyond the lis pendens rule of the Brussels Ia Regulation and domestic anti-suit injunctions. Third, recognition and enforcement of judgments has been facilitated by the Hague Judgments Convention between the EU and Ukraine. While diplomatic tensions do not undermine recognition, disregard of EU sanctions may bar enforcement. Although focused on Ukraine, the findings apply more broadly to sanctions-related disputes.

Keywords: Private international law; Economic sanctions; Overriding mandatory rules; Public policy; Anti-suit injunction (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035360192
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