Key Legal Mechanism: Articles 248.1 and 248.2 of the Russian APC
Under Articles 248.1 and 248.2 of the Arbitration Procedure Code (APC), Russian courts may claim exclusive jurisdiction over disputes involving sanctioned Russian entities, even if contracts designate foreign arbitration or litigation. The law aims to protect Russian parties from perceived bias in “unfriendly” jurisdictions but has increasingly been applied to override contractual forum clauses altogether
Notably, the EU responded to these provisions in its 15th sanctions package (December 2024) by banning recognition/enforcement of any Russian court decisions based on Article 248 APC, including injunctions and judgments.
Case Study: Kazakhstan “Friendly” Jurisdiction Overridden
In April 2024, Russia’s Commercial Court of Appeals allowed a sanctioned Russian rail operator to sue a Kazakh legal entity — despite a contract requiring disputes to be resolved in Kazakhstan (Case No. А41-62478/24). The court cited:
- Refusal by Kazakh law firms to represent Russian clients.
- Payment barriers due to SWIFT disconnection.
- General “burdens” (time, cost, reputation) for sanctioned entities litigating abroad.
It is noted that the plaintiff did not provide evidence of the Kazakh lawyers' refusal to cooperate and made no attempt to pay the state duty, including in cash.
The decision signals that even “friendly” jurisdictions may not shield foreign partners from Russian forum disputes if sanctions apply.
Constitutional Challenge: Will the Constitutional Court Curb the Trend?
The Constitutional Court of Russia is now reviewing a landmark challenge to Articles 248.1 and 248.2 APC, filed by VTB Bank Europe (an EU-based subsidiary of Russia’s VTB). The case questions whether these provisions violate Russia’s international commitments and constitutional principles when applied to “friendly” countries like China (Hong Kong).
The applicant argues the law is being misapplied, as no evidence suggests Hong Kong — a neutral jurisdiction — impedes Russian parties’ access to justice. However, Russian courts increasingly disregard any nuances, applying the statute broadly to override clauses on the dispute resolution abroad.
The Constitutional Court is unlikely to invalidate the law entirely. However, the case may force clearer limits on its application — such as requiring proof of actual barriers (e.g., payment restrictions, denied legal representation) before overriding contractual terms.