Russian Arbitrazh Court Targets Foreign Arbitrators, PCA and a Law Firm

On 29 April 2025, the Arbitrazh Court of Moscow addressed an application by the General Prosecutor’s Office of the Russian Federation, seeking to implement provisional measures in response to an Energy Charter Treaty arbitration managed by the Permanent Court of Arbitration (PCA). The decision marks an increasingly assertive stance of the Russian authorities not only towards arbitration proceedings abroad but also against a leading international arbitral institution, individual arbitrators and a law firm.

This case concerns Wintershall Dea GmbH, a German company, which initiated proceedings against the Russian Federation under the Energy Charter Treaty (ECT). The dispute revolves around economic sanctions imposed by Russia on several foreign states.

The General Prosecutor’s Office of Russia, acting in the interests of the Russian State, argued that the arbitration proceedings, being administered by the Permanent Court of Arbitration (PCA) in The Hague, posed a serious risk to Russia’s public and economic interests. The Prosecutor further contended that the tribunal, which included arbitrators Charles Poncet, Hamid Gharavi, and Olfunke Adekoya, lacked impartiality due to undisclosed conflicts of interest. Specifically, the Prosecutor accused the arbitrators of being closely linked to foreign governments hostile to Russia, which, in turn, could jeopardize the fairness of the proceedings.

According to the General Prosecutor’s Office, these arbitrators did not disclose critical information about their relationships with countries that hold antagonistic positions towards Russia, despite obligations under international arbitration rules such as the UNCITRAL Arbitration Rules and the IBA Guidelines on Conflicts of Interest in International Arbitration. The Prosecutor’s Office argued that this failure to disclose potential biases violated fundamental principles of impartiality and independence required from arbitrators. These concerns about the arbitrators’ impartiality were reinforced by referencing a series of international legal precedents, including a decision from the Swiss Federal Court, which had annulled an arbitration award due to an arbitrator’s bias against a party.

In its ruling, the Moscow arbitrazh court reviewed these arguments and determined that the claims raised by the Prosecutor were serious enough to warrant the imposition of provisional measures. Under Russian Arbitrazh Procedure Code (APC), the court is authorized to issue temporary orders when there is a risk that the outcome of the case could cause irreparable harm, or if the enforcement of a potential judgment would be difficult or impossible, especially if it concerns assets or actions outside of Russia. In this case, the court found that continuing with the arbitration, which could result in a judgment unfavourable to Russia, might cause significant harm to the country’s economic interests and public policies.

As a result, the court ruled that all arbitration procedures involving Wintershall Dea GmbH’s claims against Russia be suspended until further review of the case. It obliged  not only the parties to do so but also PCA, individual arbitrators and the law firm representing the claimant.

The court relied on the position of the Supreme Court of the Russian Federation, to conclude that “the absence of impartiality and objectivity of arbitrators from unfriendly jurisdictions, whose aim is to harm the Russian Federation, is presumed.” The court also noted that the arbitrators were not covered by arbitrator immunity:

At the same time, the court takes into account the immunity provisions of arbitrators Charles Poncet (Switzerland), Hamid Garavi (France), and Olufunke Adekoya (United Kingdom) from prosecution (paragraph 12 of the Arbitrator Appointment Conditions from 17.12.2024). However, the court concludes that the present case is not covered by this immunity. There are grounds to assume that, when appointed, the mentioned arbitrators concealed significant information, including their sustained connections with states that are unfriendly to the Russian Federation. Such behavior contradicts the requirements of Article 9 of the UNCITRAL Arbitration Rules and constitutes an abuse of rights.

The court’s decision emphasized the need to prevent irreversible damage, especially considering the geopolitical nature of the dispute. The court’s order also highlighted that the arbitration tribunal’s actions could violate Russia’s sovereign rights and its ability to implement domestic laws and policies, particularly in relation to the energy sector. Furthermore, it underscored the lack of guarantees that an eventual arbitral award would be enforceable, particularly in countries that might be sympathetic to Russia’s adversaries.

The court’s decision reflects Russia’s growing use of its domestic courts to challenge international arbitration proceedings that it perceives to be biased or harmful to its interests.

The full text of the decision is available here (in Russian).