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Swedish Court of Appeal upholds SCC award: EU sanctions neither render dispute non‑arbitrable nor justify absence of counsel; non‑participation not enough to set aside

Published on: 29 August 2024

Published by a LexisNexis Arbitration expert

Legal News

Article summary

OAO Tyumenneftegaz v First National Petroleum Corporation Case No T 2082-23 What are the practical implications of this case?

The practical implications of this decision are as follows:

The court confirmed that the mere fact a party is sanctioned does not automatically make a dispute non-arbitrable. As a result, arbitrations involving sanctioned entities, including Russian state-owned companies, can continue under Swedish law, even where EU sanctions regulations are engaged.
The court also emphasised that an inability to obtain legal counsel due to sanctions does not, in itself, prevent a party from presenting its case in arbitration. The ruling indicates that parties are expected to address such issues proactively during the proceedings. In this case, the court observed that the respondent could have raised its difficulties in securing legal counsel with the tribunal but chose not to participate, highlighting the importance of active engagement despite obstacles such as sanctions.
The court further clarified that the presence of mandatory legal provisions, including sanctions, does not necessarily render a dispute non-arbitrable.

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