Disputes Involving Foreign Companies in Russia: New Rules and Protective Measures

Since June 2020, there has been a growing trend in Russia to give its courts exclusive disputes involving foreign parties. This trend has become stronger since 2022.

For foreign companies, this means that a contractual dispute resolution clause is no longer enough when assessing litigation risks. It is also important to consider whether the parties are subject to sanctions, whether the Russian counterparty can expect a fair hearing before a foreign court or arbitral tribunal, and whether judgments and arbitral awards will be recognized and enforced in Russia or other countries.

Our article looks at three key issues:

1. Disputes involving sanctioned parties – when Russian courts may hear a dispute despite an agreement providing for a foreign court or arbitral tribunal.
2. Call options for the repurchase of shares – what has changed as of August 2026 and what new risks these developments create for foreign investors.
3. Successful law cases – the types of disputes in which foreign companies can still effectively protect and enforce their rights before Russian courts.

This issue mainly concerns disputes involving Russian parties that are subject to sanctions.  

Russian companies have the right to bring certain claims before Russian courts even if their contracts says that the dispute must be resolved by a foreign court or an international arbitral tribunal.

In such cases, Russian courts must accept the claim, even if the foreign company objects. The Russian court may also order the foreign company not to start or continue proceedings abroad. Failure to comply with such an order can lead to significant fines.

If a foreign court hears the same dispute at the same time as a Russian court, any judgment issued by the foreign court is unlikely to be recognized or enforced in Russia. Since 2022, Russian courts have applied these rules more frequently. In particular, they have increasingly taken the view that sanctions may make it difficult for Russian parties to receive a fair hearing in foreign jurisdictions.

As a result, the likelihood of Russian courts recognizing and enforcing judgments from foreign courts and arbitral awards from so-called “unfriendly” countries remains low, especially in certain categories of disputes.

For foreign companies, this means that it is important to look beyond the wording of an arbitration clause. They should also consider the risk of parallel proceedings in Russia and whether a foreign judgment or arbitral award is likely to be enforceable there.

2. Court Proceedings Concerning the Cancellation of Call Options for the Repurchase of Shares

As of August 2026, the Arbitration Court of the Moscow Region has been granted exclusive jurisdiction over potential new claims brought by Russian parties seeking to terminate a foreign investor’s rights to repurchase shares in Russian companies.

Such claims may also be brought by the relevant Russian government authorities, subject to approval of the Government Commission for Monitoring Foreign Investment.

Foreign investors that still have rights to repurchase Russian assets should assess the risks that these new rules may create for their transactions.

3. Successful Cases Involving Foreign Companies

Despite these trends, foreign companies are not necessarily unable to effectively pursue litigation before Russian courts.

Based on our experience, foreign companies can still successfully pursue disputes related to their ongoing commercial activities, including insolvency, intellectual property, and other commercial disputes.

Commercial Disputes and Sanctions

We represented a subsidiary of a major European automotive manufacturer in more than 25 court proceedings, including claims brought by Russian customers seeking delivery of equipment under existing contracts and compensation for alleged losses.

In these proceedings, we successfully argued that the subsidiary should not be held liable because European sanctions prevented it from manufacturing the relevant products. Our arguments relied on the applicable force majeure provisions and rules governing a material change in circumstances.

Our successful representation helped the client to complete the sale of its Russian business.

Insolvency

We have successfully represented foreign clients in insolvency proceedings involving their Russian counterparties.

For example, we represented a subsidiary of a well-known US toy manufacturer in proceedings brought by a bankruptcy trustee seeking to challenge payments for goods made shortly before the counterparty became insolvent.

We also represented an international medical equipment manufacturer in the insolvency proceedings of a Russian customer and successfully recovered the full amount of the client’s claims.

Debt Recovery

We regularly represent foreign clients in court proceedings to recover outstanding payments for products supplied.

Intellectual Property

We represented a European company that produces cosmetics for children and mothers in a trademark infringement case against a Russian company that had previously acted as the client’s distributor.

We also successfully initiated administrative proceedings in connection with the infringement.

Conclusion

Our experience shows that, despite the current restrictions and prevailing trends, Russian courts can still be an effective way for foreign companies to protect their rights and financial interests in disputes with Russian companies.