The Russian Prosecutor General’s Office has initiated court proceedings aimed at enjoining an international arbitration brought under the Energy Charter Treaty. The case, involving a prominent European energy investor, marks an unusual attempt to assert domestic jurisdiction over a treaty-based dispute. It reflects the growing intersection between international law and national legal strategies, particularly in politically sensitive investment cases.
In this blog, we explore the background of the case, its legal implications, and what it may reflect about the evolving landscape of investor-state arbitration.
In response to Wintershall Dea’s investor-state arbitration claim against Russia commenced under the Energy Charter Treaty, the Russian General Prosecutor’s Office (GPO) filed a claim recently in the Arbitrazh Court of the City of Moscow (case No. A40-92702/2025) against the German company, its lawyers and the members of the arbitral tribunal. Apparently, the GPO seeks to enjoin the arbitration based on Articles 248.1 and 248.2 of the Russian Code of the Arbitrazh Procedure (CAP).
By way of reminder, Articles 248.1 and 248.2 of the CAP, being introduced in 2020 (the so called “Lugovoy Law”, named after an initiator of these amendments), allow Russian courts to assume the jurisdiction over the disputes otherwise referred to foreign courts or international arbitration if sanctions are imposed on Russian parties creating obstacles for the access to justice for such sanctioned party. (It should be noted, however, that Russia, the respondent in the investor-state claim, is not sanctioned.)
The claim is a novel one and is highly unusual. One does not see too often that the GPO of a host country is trying to enjoin the arbitral tribunal itself or the claimant’s lawyers. According to the press reports, an anti-arbitration injunction is sought from a Russian court based on allegations that two arbitral tribunal’s members are not impartial and nor is the Permanent Court of Arbitration (PCA), which is apparently is an appointing authority in the case.
As to the anticipated outcome of the Russia’s move, one can expect that the Russian court would grant this application and order the arbitral tribunal and the PCA to halt the arbitration. The non-compliance with an anti-arbitration injunction issued under Articles 248.1 and 248.2 of the CAP can lead to a fine in the amount of up to the amount of the entire claim, which on this occasion is around EUR$7.5 billion.
Several takeaways are warranted from this unorthodox Russia’s move. First, state authorities of host states begin to deploy the tactics not used before, targeting the arbitrators and lawyers. Second, the polarisation of the world is starting to cause polarisation within arbitration community as well; as a result, proving impartiality (and, to a lesser extent, independence of arbitrators) is becoming more and more cumbersome. Third, the development of a strategy in these new conditions requires involvement of legal specialists with experience of working in various specific jurisdictions, with generalised knowledge of a country history and law no longer being deemed sufficient.
Updated: 23 April 2024
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