Enforcement of €214 million arbitration award not blocked by sanctions defence

05/05/26

The Commercial Court (Dias J) has rejected an application of Rusal to prevent enforcement of an LCIA arbitration award against it (the Award). The Award had found RTI (Rusal’s Jersey subsidiary) and Rusal liable to pay OWH SE IL (formerly VTB Bank (Europe)) €214 million under currency swap transactions.

Rusal argued before Dias J that it would be contrary to English public policy to enforce the Award where:

1. The liability of RTI (as debtor) and Rusal (as guarantor) arose as a result of the refusal by RTI to make margin payments to OWH because RTI reasonably believed it would breach Jersey sanctions if it did so.
2. RTI had a defence under Article 46A of the Sanctions and Asset-Freezing (Jersey) Law 2019, the Jersey equivalent of section 44 of the Sanctions and Anti-Money Laundering Act 2018. Article 46A provides that a party shall not be liable in proceedings for acts done in the reasonable belief that it was necessary to comply with the relevant sanctions obligations.   
3. The Award did not consider the Article 46A defence.

Dias J held that in considering whether to enforce the Award the court had to decide how the balance between competing public interests should be struck after taking into account all relevant factors and circumstances.  The Judge decided that in this case the balance favoured enforcement despite the vital public interest attaching to the sanctions regime, for the following reasons in particular: (i) the defence under Article 46A was not obligatory and it did not prohibit payment, (ii) it was not said that the payment of the margin call or of the Award would breach Jersey or English sanctions law and (iii) although the judge rejected OWH’s Henderson v Henderson argument, the public policy argument was not raised before the tribunal and (iv) there was no public policy interest in refusing enforcement in England against Rusal as guarantor.  

The judgment is here.