4 | Financial Sanctions: enforceability and anti-suit skirmishes

Financial sanctions, particularly those intended to encourage Russia to cease the ongoing conflict in the Ukraine, continue to impact financial transactions involving sanctioned persons, entities or sectors – often resulting in disputes.

Following a hearing in December 2025, the Supreme Court ruled in favour of UniCredit in a judgment that clarified the scope of Regulation 28(3) of the Russia (Sanctions) (EU Exit) Regulations 2019/855 (The Russia Regulation) and the protections afforded under section 44 of SAMLA.1 In a judgment2 emphasising the broad scope of the UK sanctions regime and the manner in which OFSI licences act as a safety valve against any unintended consequences of such breadth, the Supreme Court (i) agreed with the Court of Appeal that, absent a licence, payments under letters of credit entered into as security for aircraft leases with Russian lessors were prohibited by the Russia Regulation on the basis that they were payments “in connection with” an arrangement to supply aircraft to Russia, and (ii) reversing the Court of Appeal’s decision, confirmed that s44 of the SAMLA can protect parties from all civil liability, including debt, interest and adverse costs, where they reasonably believe that non-payment or non-compliance with other contractual obligations action is required in order to comply with sanctions.

In Tonzip Maritime3, the Court of Appeal held that contractual provisions releasing a party from its obligations where performance would “expose” it to sanctions did not require that party to reach a positive determination that performance would ‘more likely than not’ place it in breach of sanctions. Instead, it was enough that the party had formed a reasonable judgment that performance would give rise to a real risk of breach of sanctions.

Beyond the cases focusing on whether parties are released (or not) from payment or other contractual obligations as a result of financial sanctions, we continue to see a broad range of ancillary claims and applications. These include:

• applications for anti-suit relief to restrain parallel claims by Russian counterparties, often in the Russian Courts (see JP Morgan and VTB4),
• applications for anti-enforcement relief, including on the basis that enforcement of a judgment or award would be contrary to public policy where the action or inaction of the judgment debtor giving rise to liability stemmed from its belief that it otherwise risked breaching sanctions (OWH SE v RTI and Rusal5), and
• challenges by individuals to their designation by the UK government as an ‘associated’ person for the purposes of Section 11 of SAMLA and Section 6 of the Russia Regulation (Ismailov v Secretary of State for Foreign and Commonwealth and Development Affairs6).

Looking ahead to later this year, the closely watched case of Virgo Marine and Nixie Marine against Reed Smith and Barclays Bank is listed for trial in November 2026. Any resulting judgment is expected to grapple with important questions regarding the application of US sanctions to non-US persons, as well the interaction between US sanctions regimes and the EU’s Blocking Statute, which seeks to shield EU entities from the extraterritorial reach of US sanctions.