In response to the dilemma in Ukraine, several Latin American countries have denounced Russia’s invasion of Ukraine, including Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala and Uruguay. Other countries, including Australia, Canada, Japan, New Zealand, South Korea, Switzerland, Taiwan, the United Kingdom and the United States have officially imposed a series of sanctions against Russia , Russian entities and Russian individuals. These sanctions could affect international arbitrations in various ways.
The substance of the dispute. Economic sanctions could potentially make performing a contract with a sanctioned Russian entity or individual impossible or commercially unfeasible. Thus, the effects of international sanctions could invoke the legal doctrines of impracticality, force majeure, impossibility, goal frustrationWhere tests.
The seat and forum of the dispute. If the seat or forum of the arbitration is in a territory that has sanctioned the Russian party, the Russian party may need to apply for a license to even enter the country let alone use its courts for the claim. interim measures or other resources at the seat of arbitration.
Payment of Institutional Fees and Prize. Sanctions could also affect the payment of scholarship or institutional fees. Sanctions could create a situation where banks block/freeze any payment when a payee or payer is a sanctioned entity. This could mean being prohibited from paying under the arbitration award or being able to postpone payment of institutional fees.
The appointment of an arbitrator, an expert or a law firm. International sanctions could affect the appointment of an arbitrator, expert or law firm, as it could be argued that an arbitral award may facilitate a “material” transaction with a sanctioned entity that is prohibited by US sanctions.
Therefore, if Latin American countries that have denounced Russia begin to impose formal sanctions against Russian entities and parties, your LatAm dispute or your contracted party may involve a sanctioned entity, you may need to check whether the any of these issues may affect your dispute. and find alternative ways to combat them.