Anti-sanction clause in commercial contracts

Since 2014, a significant number of unilateral economic sanctions have been imposed on the Russian Federation by the United States and the European Union. Despite the fact that the purpose of the imposition of sanctions is to change the foreign policy of the state, in respect of which unilateral restrictive measures are being introduced, they have been declared as ineffective, and in practice they usually do not help to change the policy of the state, but have a negative impact on physical and legal entities, and also substantially violate human rights. Economic sanctions affect the state of the economy as a whole, and, therefore, can also affect the ability of parties to execute a contract. In this regard, the question arises as to whether economic sanctions can be regarded as force majeure and exempt from liability for non-performance or improper performance of obligations. Meanwhile, the case law on sanctions disputes is still in its infancy and is ambiguous. In this regard, various legal instruments are of particular importance to minimize sanctions risks, which also include anti-sanction clauses, the study of which is the object of this work. Such clauses include representations and warranties that neither the counterparty nor its controlling parties are subject to sanctions, a force majeure clause, an applicable law clause, and dispute resolution clauses. The arbitration clause is of particular importance in connection with the amendments introduced in 2020 to the APC of the RF, which make it possible to hear the “sanctions dispute” in the state arbitration court of the Russian Federation in the event that the arbitration clause is unenforceable. The study has shown that the inclusion of such clauses in the text of the contract will help to maintain certainty in the legal relations of the parties, as well as the stability of civil commerce, which is a necessary component for improving the investment climate in the Russian Federation.