Russian court rejects EU sanctions defence in damages claim

13 May 2026

The Arbitration Court of the Murmansk Region has ordered 2 EU companies to pay €8.8m in  damages to a Russian port company after finding that EU sanctions did not justify their refusal to repay advance payments — case no. A42-2551/2025.  All Russian judgments relating to sanctions are on the judgments section of the site.

In 2018 Port Lavna contracted with the EU companies to design and install equipment for a coal handling complex at Murmansk port. Lavna paid €8.8m in advance payments in 2019. In April 2022, the EU amended Article 3k of Regulation (EU) 833/2014, prohibiting the supply to Russian entities of certain equipment including the type covered by the contract. The EU companies refused to complete the work or to return the advance payment because of EU sanctions.

Lavna brought an ICC arbitration seeking a refund which was unsuccessful. A Russian prosecutor then applied to the Murmansk court to block recognition of the ICC award, arguing it was contrary to Russian public policy. Had the award been recognised in Russia, it would have been a binding determination that the EU companies owed Lavna nothing, barring further Russian proceedings. The court refused recognition (case A42-5661/2025), because Russian law does not recognise EU sanctions as creating rights or obligations binding on Russian entities; compliance with sanctions amounted to an abuse of Lavna’s rights; and the arbitrators (nationals of states Russia classifies as "unfriendly" under Government Decree No. 430-р) could not guarantee Lavna a fair hearing.

With the ICC award blocked, Lavna brought a tort claim in the Russian courts for the same €8.8m. The court established jurisdiction under Article 248.1 of the Arbitration Procedure Code (exclusive Russian jurisdiction over disputes arising from foreign sanctions) and Article 247 (close connection to Russian territory). See our Russia pages for case law on Article 248. Russian law applied under Article 1219 of the Civil Code and Dutch law (the law governing the contract) was excluded as contrary to Russian public policy, since applying it would have given effect to the EU sanctions as a defence.

The court held the EU companies jointly and severally liable and ordered payment of €8,799,286.20 in damages.