In the wake of Russia's war against Ukraine and successive rounds of Western sanctions, European companies are increasingly confronted with the situation that their Russian counterparties bring claims before Russian state courts despite existing arbitration or jurisdiction clauses. In doing so, the Russian parties rely on Articles 248.1 and 248.2 of the Russian Arbitrazh (Commercial) Procedure Code (the "APC"). These provisions enable Russian parties to initiate proceedings before designated Russian courts that assert jurisdiction over disputes although jurisdiction would typically lie with non-Russian courts or arbitral tribunals seated in Western countries.
Articles 248.1 and 248.2 APC require that at least one of the parties to the dispute is subject to foreign sanctions and that such sanctions impede access to justice in the agreed forum. This requirement has been interpreted very broadly in practice – Russian courts have found it sufficient that the agreed forum is located in a state that has imposed sanctions on Russia, even where the parties to the proceedings are not personally sanctioned and the issues at dispute are not sanctions-related. Russian courts, thus, routinely declare arbitration agreements unenforceable, issue anti-suit or anti-arbitration injunctions to block foreign proceedings and impose severe financial penalties on non-compliant parties.
Insofar as Russian judgments are based on Articles 248.1 and 248.2 APC, Article 11c para. 1 of Regulation (EU) No 833/2014 expressly prohibits their recognition and enforcement within the EU. The critical risks therefore lie in enforcement in countries outside the EU as well as in Russian court-imposed financial penalties. The new Regulation (EU) 2026/506 (the "20th Sanctions Package") now seeks to mitigate these risks.
Legal situation prior to the 20th Sanctions Package
Until recently, German law offered only limited options to effectively counter arbitrary foreign proceedings and their consequences, including enforcement attempts and related financial penalties. In particular, German law does not recognize anti-suit injunctions. Restraining proceedings abroad is generally regarded as an interference with the judicial sovereignty of a foreign state. As a matter of EU law, anti-suit injunctions vis-à-vis third states are not precluded: the CJEU's rulings in Turner v Grovit and Allianz v West Tankers only prohibit intra-EU anti-suit injunctions issued by state courts.
Despite this permissive EU-law framework, German courts have remained cautious in practice. In a much-noted decision from 2024 (case no. 26 W 7/24), the Higher Regional Court of Düsseldorf declined to grant effective injunctive relief in arbitration-related disputes involving Russia. While a German court may render a declaratory judgment confirming the validity and binding effect of an arbitration agreement, the practical impact of such judgment is low. An application for such judgment is only admissible prior to the constitution of the arbitral tribunal, and such judgment lacks any sanctioning effect or enforcement mechanisms.
New possibility of anti-suit injunctions
This restrictive approach of the German courts is now subject to reassessment due to developments at the EU level. On 23 April 2026, the Council of the European Union adopted the 20th Sanctions Package. The 20th Sanctions Package introduces a new Article 11ca, which directly addresses the aforementioned Russian litigation strategy by empowering Member State courts to intervene: Where proceedings in Russia are brought in breach of an exclusive jurisdiction or arbitration clause or pursuant to Articles 248.1 or 248.2 APC, Member State courts may issue orders restraining such proceedings or requiring their discontinuation. Such orders may be augmented by financial penalties to ensure compliance.
Article 11ca is directly applicable in each Member State without implementing legislation and grants EU citizens an enforceable right before national courts. The question, therefore, is how this new provision is to be integrated into the existing doctrinal framework of German civil procedure. This raises, in particular, the issue of whether and to what extent remedies in question previously discussed in legal scholarship and case law must now be reassessed or receive a different doctrinal basis under the new regime:
Previously, the German Federal Court of Justice held that a jurisdiction or arbitration clause gives rise only to a non-actionable ancillary duty not to commence proceedings in breach of that clause. Article 11ca thus now introduces precisely what had previously been denied: an autonomous, directly enforceable remedy allowing a party to obtain a court order prohibiting the initiation or continuation of foreign proceedings in breach of an arbitration or jurisdiction agreement. The principle of effet utile of EU law requires national courts to ensure full practical effectiveness of this right. Given the urgency inherent in ongoing or imminent foreign proceedings, particularly where they are initiated in disregard of a jurisdiction or arbitration agreement, this remedy will typically be granted by way of preliminary injunction.
Alternatively, Article 11ca could be given effect by allowing applications for declaratory judgments confirming the validity and binding effect of an arbitration agreement even after the constitution of the arbitral tribunal. However, such an extensive interpretation of the relevant provision of the German Code of Civil Procedure is barred by its clear wording.
Practical benefit of a German anti-suit injunction
A German court's preliminary injunction will most likely neither be recognised nor enforced in Russia. Member State courts, on the other hand, are required to refuse the recognition of Russian judgments issued based on Articles 248.1 and 248.2 APC pursuant to Article 11c of Regulation (EU) No 833/2014 in any event, without room for a discretionary assessment and, most notably, without any need for an injunction.
The most practically relevant question therefore is whether a German anti-suit injunction can effectively prevent the enforcement of Russian judgments outside of the EU. Where a foreign court is simultaneously confronted with an application to enforce a Russian judgment issued in reliance on Articles 248.1 and 248.2 APC and a German anti-suit injunction, a conflict arises between the two titles.
To be enforced in a non-EU jurisdiction, the German injunction would need to satisfy the recognition requirements of the respective national law – requirements that injunctive (as opposed to monetary) judgments may not always meet. Even where recognition is granted, this does not automatically preclude enforcement of a competing Russian judgment, as the enforceability of the latter is assessed independently.
While the details depend on the applicable local law, the enforceability of the Russian judgment will generally be refused if, inter alia, the enforcement court concludes that the Russian court lacked jurisdiction or that the Russian judgment violates the enforcement state's ordre public. If the enforcement court is willing to take the German injunction into account as a matter of comity, the reasoning of the injunction could persuade the court that the Russian judgment should not be enforced. However, in particular in Russia-friendly jurisdictions, there is a material risk that a German injunction will carry little persuasive weight. It is thus questionable whether the effort required to obtain a preliminary injunction is proportionate to its actual benefit.
Effect of extended transaction bans and sanctions under the 20th Sanctions Package
A more effective means to exert pressure on the Russian party conducting proceedings in Russia and to prevent the enforcement of the judgments arising therefrom in countries outside the EU may lie in the extension of the transaction bans and other sanctions now provided for in the 20th Sanctions Package.
The new Article 5aj extends the transaction bans introduced in 2014 and significantly broadens the range of conduct that may trigger sanctions. Article 5aj targets natural and legal persons (other than lawyers and members of the judiciary and EU citizens and entities) who pursue or assist in the enforcement of Russian judgments in countries outside the EU as well as their parent entities. As a result, banks or other financial institutions, third-party funders or the providers of asset tracing services who facilitate the enforcement efforts may, for the first time, be directly subject to EU-wide transaction bans. The extended transaction bans only apply where the Russian judgment concerns contracts or transactions where the performance has been affected, directly or indirectly, in whole or in part, by sanctions. Strictly interpreted, Article 5aj would, therefore, not apply to persons aiding the enforcement of a Russian anti-suit injunction that was issued based on a broad interpretation of Articles 248.1 and 248.2 APC but does not relate to a sanctions-affected contract.
In addition to the extension of transaction bans, the 20th Sanctions Package establishes a comprehensive damages regime which could help address exposure arising from court proceedings in Russia and from enforcement efforts in non-EU countries. Even before the 20th Sanctions Package, the German Federal Court of Justice recognised (case no. III ZR 42/19) that the breach of a jurisdiction clause may give rise to damages claims. Article 11a of Regulation (EU) No 833/2014, as introduced by the 20th Sanctions Package, allows EU citizens or legal entities to recover direct and indirect losses, including legal costs, incurred by them or their non-EU subsidiaries as a consequence of proceedings in Russia or attempts to enforce Russian judgments in third countries other than Russia. Such damages claims may be brought before the courts of the Member States, provided they have jurisdiction under the generally applicable rules. Where that is not the case, Article 11d provides for the exceptional jurisdiction of the courts of a Member State if the case has a sufficient connection with the Member State of the court seized.
While the 20th Sanctions Package allows the recovery of legal expenses and other costs incurred due to the Russian proceedings as part of the damages claim, the main economic loss will usually only materialize once a Russian judgment has actually been recognized and enforced into the EU party's (or its subsidiary's) assets. Notably, the 20th Sanctions Package provides that compensation for such economic loss may also be claimed from persons, entities or bodies (other than lawyers and members of the judiciary and EU citizens and entities) that "cooperate" in the enforcement of Russian judgments in third countries or that own or control the entities or bodies seeking to enforce the Russian judgment or cooperating in its enforcement. In addition to demonstrating a loss as a result of Russian proceedings or the enforcement of a Russian judgment, the claimant must also show that it does not have effective access to remedies in Russia or the third country in which enforcement is sought.
The practical utility of damages claims under Article 11 as a tool to deter the Russian litigation strategies described above or the enforcement of Russian judgments obtained pursuant to those strategies is, however, limited in two important respects:
First, like for the transaction bans under Article 5aj, it is a precondition for the damages claims that the underlying contract or transaction has been directly or indirectly affected by EU sanctions. Proceedings brought in the Russian courts solely under a broad interpretation of Articles 248.1 and 248.2 APC without the involvement of a sanctioned party or transaction are not sufficient to trigger damages claims under Article 11a.
Second, the full loss resulting from the enforcement of a Russian judgment can only be quantified after the enforcement has occurred. Accordingly, the EU party will generally be unable to obtain a judgment from the competent Member State court for the full amount of its loss in time to use that judgment as a means to avert the recognition or enforcement of the Russian judgment in a third country. This inherent time-lag substantially reduces the practical utility of Article 11a as a tool to deter Russian parties from employing the litigation strategies described above.
The main field of application of Article 11a will, thus, lie in the enforcement of damages claims after the enforcement of the Russian judgment has taken place. The practical value of an Article 11a judgment will largely depend on whether the party against whom the damages claim is awarded holds assets within the EU or in a jurisdiction willing to recognise and enforce Member State judgments. Aside from that, the possibility to assert and enforce damages claims against third parties cooperating in the enforcement of the Russian judgment or their parent companies may prove to have a chilling effect on any activities that may be deemed to constitute "cooperation". This, in turn, may make it more difficult for Russian parties to obtain the services they require to enforce judgments in third countries.
The 20th Sanctions Package marks a significant step in the development of the European Union's sanctions regime: For the first time, EU law provides both injunctive relief (Article 11ca) and comprehensive damages claims (Articles 11a) to counter the consequences of Russian litigation strategies in sanctions-related disputes. However, the practical effectiveness of these remedies remains constrained by the same limitations that have long characterized cross-border enforcement disputes – in particular, the limited reach of EU court orders and judgments in third countries and the difficulty of accessing Russian-held assets. Whether these new instruments will ultimately prove to be a genuine game changer or merely a doctrinally elegant but practically ineffective response will largely depend on the willingness of third-state courts to recognise and give effect to Member State judgments.
