Ksenia Deeva
by Ksenia Deeva
Ksenia Deeva specialises in supporting disputes in arbitration courts and in courts of general jurisdiction, including ones with the participation of foreign entities, as well as on corporate law. Ksenia graduated from the Moscow State Institute of International Relations under the Ministry of Foreign Affairs of the Russian Federation (MGIMO) and Kutafin Moscow State Law University (MSAL). Contact Ksenia.
When international restrictions and sanctions are imposed on one nation by others in the global marketplace, it can be difficult or impossible for businesses and manufacturers to fulfil some obligations.
In the event of force majeure circumstances, a party to the contract shall be released from liability for breach of obligation – for example, such a party shall be released from delay penalties for failure to meet delivery deadlines, failure to complete work on time, or the party shall be released from compensation for losses.
In order to recognise force majeure, it is necessary to establish whether a particular circumstance is extraordinary and unavoidable.
A party who considers that a breach of an obligation is caused by force majeure shall prove the following:
The parties have the right to establish in the contract a list of circumstances that will constitute force majeure.
After February 2022, it is recommended that the force majeure clause be amended to include international sanctions and related consequences as force majeure circumstances.
In Russian law, sanctions themselves are not named as force majeure. Until the government changes the law to recognise sanctions as force majeure by default, it is necessary to prove the existence of force majeure in each case. In Russian practice, there are cases in which the court has recognised unilateral sanctions as force majeure. For example, in Case No. A40-15648/2020, the court found that the Russian supplier was not responsible for its inability to deliver railcars to Estonia due to EU sanctions on the supply of military equipment .
In Case No. A76-26950/2018, the court stated that the seller was not liable for delayed delivery due to the imposed sanctions.
In March 2022, the Ministry of Justice and the Ministry of Economic Development were instructed to prepare a draft law recognising international sanctions as force majeure. However, to date, the draft has not been agreed upon.
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Nektorov, Saveliev & Partners is a law firm established in 2006 in Moscow, Russia, focussed on providing comprehensive legal solutions to corporate and private clients under Russian and English law. Their main practice areas are public-private partnership, tax, corporate and M&A, arbitration and litigation, banking and finance, investments, and real estate. They provide legal support to clients in Russia, CIS countries (Belarus, Kazakhstan, Ukraine), and worldwide.