Russian Law and Arbitration Agreements after the Arbitration Act 2025

The Arbitration Act 2025 changed the way English law decides which law applies to an arbitration agreement. It amended the Arbitration Act 1996 and came into force on 1 August 2025.

Under the new section 6A, the parties may expressly choose the law that governs their arbitration agreement. If they do not make a separate choice, the law of the arbitral seat will apply.

This means that choosing Russian law for the main contract does not automatically make Russian law applicable to the arbitration clause.
The practical result is:

If a contract is governed by Russian law, the arbitration is seated in London, and the parties do not separately choose the law of the arbitration agreement, the main contract will usually be governed by Russian law and the arbitration agreement by English law.

Russian law will govern the parties’ main contractual rights and obligations, including performance, breach and remedies. English law will govern questions such as whether the arbitration agreement is valid, who is bound by it and which disputes it covers. English arbitration law will also govern the procedure and court supervision of the arbitration because London is the seat.

The new rule generally applies to arbitrations started on or after 1 August 2025, even where the contract was signed before that date, subject to the Act’s transitional provisions.

The seat is the legal home of the arbitration, not necessarily the physical place of hearings. A London seat brings the arbitration within the supervisory jurisdiction of the courts of England and Wales and the procedural framework of the Arbitration Act 1996.

The distinction between the law of the main contract, the law of the arbitration agreement and the law of the seat is therefore important:


Silence now produces a relatively predictable result where the seat is London. Nevertheless, parties should not rely on the statutory default. An express choice remains preferable because foreign courts are not bound by the English choice-of-law rule, related documents may contain different clauses, and disputes may arise over the designation of the seat.

Where the parties want English law to govern the arbitration agreement, they should say so expressly.

Section 6A does not eliminate the risk created by Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code.

These provisions allow Russian commercial courts, in certain sanctions-related disputes, to assume jurisdiction despite a foreign arbitration agreement and to prohibit a party from commencing or continuing proceedings abroad. A Russian court may impose a monetary penalty for breach of such a prohibition, potentially up to the value of the foreign claim and associated costs.

Russian governing law is not itself the trigger. The risk usually depends on factors such as:

• sanctions imposed on a Russian party or its controlling persons;
• alleged difficulties in paying arbitration fees or instructing lawyers;
• the connection between the dispute and restrictive measures;
• the place of contractual performance;
• the presence of assets or business operations in Russia; and
• Russian counter-sanctions and payment restrictions.

The Russian Supreme Court’s Review of 17 June 2026 indicates an expansive approach. It suggests that a party need not demonstrate that foreign arbitration is absolutely impossible. Increased costs, payment difficulties, visa restrictions and other practical obstacles may be sufficient.

The Review also creates additional enforcement concerns. It indicates that the involvement of arbitrators from states classified by Russia as “unfriendly” may raise a presumption of insufficient impartiality unless rebutted. It further confirms that enforcement may be refused where payment of an award would conflict with Russian counter-sanction rules or public policy.

For British parties, these are material risks because the United Kingdom remains included in Russia’s list of “unfriendly” states.

Commencing the London arbitration promptly may make a subsequent Russian merits claim more difficult under Article 248.1, but it does not provide complete protection. The Russian applicant may dispute the identity of the proceedings, seek different remedies or apply for an anti-suit order under Article 248.2.

A single dispute may produce:

1. a London arbitration;
2. Russian court proceedings;
3. an English application for an anti-suit injunction; and
4. enforcement litigation in additional jurisdictions.

An English anti-suit injunction operates against the party, not against the Russian court. It may restrain foreign proceedings brought in breach of an arbitration agreement. For a London-seated arbitration, the jurisdictional basis for English court assistance is generally stronger than for a foreign-seated arbitration.

However, legal entitlement to an injunction and its commercial usefulness are different questions.

In UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, the UK Supreme Court upheld English jurisdiction to restrain Russian proceedings brought in breach of Paris arbitration clauses governed, under the former law, by English law.

The later history of the case demonstrated the practical limits of that relief. A Russian court prohibited UniCredit from pursuing the foreign proceedings and threatened a penalty of €250 million. In 2025, the English Court of Appeal discharged the operative injunction after considering UniCredit’s continuing exposure to Russian assets and business operations.

That is, an English anti-suit injunction may be legally justified but commercially unsustainable where the protected party has substantial assets or operations in Russia.

The 2026 decision in FH Holding Moscow Ltd v AO UniCredit Bank [2026] EWCA Civ 468 illustrates a different problem. The facility agreement provided for Vienna arbitration, while a Russian-law mortgage provided for proceedings in the Moscow Commercial Court. The Court of Appeal refused an anti-suit injunction because the Russian foreclosure proceedings were not necessarily inconsistent with the facility’s arbitration clause.
The case shows that parallel proceedings do not always result from Article 248. They may arise because different transaction documents allocate jurisdiction differently.

Where Russian law governs the main contract, it must be properly established before a London tribunal or English court.

In English court proceedings, foreign law is generally treated as a question of fact. Complex issues should normally be supported by independent expert evidence. A translation of the Russian law may be sufficient for a simple statutory proposition, but it will rarely be enough where the dispute concerns sanctions, judicial practice, force majeure, corporate authority or counter-sanction regulations.

A Russian-law expert should explain:

• the law applicable at the relevant date;
• the interaction between statutes, presidential decrees and government resolutions;
• relevant Supreme Court and Constitutional Court authorities;
• whether the legal position is settled or disputed;
• how Russian courts apply the rules in practice; and
• how the law applies to the contractual documents and facts.

The same discipline is advisable in arbitration. Although an arbitral tribunal has greater procedural flexibility, parties should not expect it to conduct its own research into Russian law.

Careful translation is also essential. For example, the Russian expression arbitrazh court refers to a state commercial court, not an arbitral tribunal. Literal translation can therefore materially alter the meaning of a jurisdiction clause.

Guarantees and demand bonds are particularly exposed to sanctions-related jurisdictional disputes. Each guarantee should be treated as a separate contract and should expressly state:

• its substantive governing law;
• the arbitral rules and seat;
• the language and tribunal composition;
• the law governing the arbitration agreement;
• whether disputes concerning the validity of a demand are arbitrable; and
• how sanctions licences and alternative payment methods are to be handled.

Reliance on a general incorporation clause is risky, particularly where the issuing bank is not a party to the underlying supply, construction or financing agreement.

After section 6A, an English-law guarantee providing for Paris arbitration, but making no express choice for the arbitration agreement, will ordinarily have a French-law arbitration agreement. Parties seeking English law must choose it expressly or select London as the seat.

Sanctions clauses should also address whether an obligation is suspended or discharged, who must apply for licences, whether alternative currencies or accounts may be used, and what evidence is required to establish that payment is legally prohibited.

Financing transactions often contain different dispute-resolution provisions in the facility agreement, guarantees, mortgages, pledges and intercreditor arrangements.

A Russian mortgage may require Russian court proceedings because disputes concerning Russian immovable property fall within the exclusive jurisdiction of Russian courts. That does not mean that all disputes under the financing should be litigated in Russia.

The documents should clearly determine:

• whether the Russian court clause is limited to registration and foreclosure;
• whether the existence and amount of the debt must first be determined by arbitration;
• whether an event of default may be examined in both forums;
• whether the security agent may foreclose before obtaining an award; and
• which parties are bound by the arbitration agreement.

The FH Holding case shows that a broad arbitration clause in a facility agreement will not automatically override a specific Russian court clause in a mortgage.

Asset location must also be considered before the transaction is signed. A London award may have limited value where all significant assets are located in Russia and recognition there is vulnerable to Article 248 or public-policy objections.

For a Russian-law international supply contract with London-seated arbitration, English law will govern the arbitration agreement unless another law is expressly selected.

Russian law will continue to govern substantive questions concerning delivery, acceptance, payment, breach, force majeure, damages and termination.

The contract should address:

• sanctions and export controls;
• governmental licences;
• alternative payment mechanisms;
• transfer of risk and title;
• force majeure and hardship;
• replacement transactions and mitigation;
• suspension and termination rights; and
• preservation of delivery and payment evidence.

These matters affect both the merits of the dispute and subsequent enforcement. The Russian Supreme Court’s 2026 Review demonstrates that Russian courts may closely examine the tribunal’s treatment of foreign law, force majeure, mitigation and the practical consequences of enforcement.

The contract should identify four matters separately:

1. the law of the main contract;
2. the law of the arbitration agreement;
3. the arbitral seat; and
4. the institutional rules.

A concise clause may provide:
This Agreement, excluding the arbitration agreement contained in this clause, shall be governed by Russian law.
Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration under the LCIA Rules. The seat of arbitration shall be London, England. The language of the arbitration shall be English.
The arbitration agreement contained in this clause, including questions concerning its formation, validity, scope, interpretation and termination, shall be governed by English law.

The entire transaction suite should be reviewed together. Guarantees, mortgages, purchase orders and security documents should not contain inconsistent or unexplained dispute clauses.

An undertaking not to commence proceedings under Articles 248.1 or 248.2 may strengthen the contractual basis for anti-suit relief. It will not prevent a Russian court from applying mandatory Russian procedural law and may expose the parties to directly conflicting English and Russian orders.

The Arbitration Act 2025 has clarified the English choice-of-law position. A Russian-law contract with London-seated arbitration will ordinarily have an English-law arbitration agreement unless the parties expressly choose another law.

That structure is coherent and commercially useful, but it does not neutralise Russian Article 248 proceedings, guarantee the effectiveness of an English anti-suit injunction or ensure enforcement of a London award in Russia.

For guarantees, credit agreements and international supply contracts, effective drafting must therefore address not only governing law and seat, but also Russian sanctions exposure, parallel proceedings, related transaction documents, the location of assets and the evidence required to prove Russian law.

This article provides general information as at 24 July 2026 and does not constitute legal advice.

For tailored advice on Russian-law contracts, London-seated arbitration, Article 248 risks, parallel proceedings, anti-suit relief, enforcement strategy, or the drafting of arbitration clauses in guarantees, credit agreements and international supply contracts, readers are welcome to contact Vasiliy Tarasenko. Drawing on extensive experience in Russian and cross-border disputes, Vasiliy Tarasenko can assist with transaction planning, contract review, expert analysis of Russian law, and the development of practical strategies for protecting rights and assets in both arbitral and court proceedings.