Comparative Law Researches

Comparative Law Researches

The Effect of Economic Sanctions on International Commercial Arbitration in light of European :union: Approach

Document Type : Original Research

Authors
Oveis Rezvanian 1
Eeta Khosro khakpour 2
1 Assistant Professor, Department of Law, Faculty of Law, Institute for Management and Planning Studies, Tehran, Iran
2 Department of Law, Faculty of Law, Theology and Political science, Science and Research Branch, Islamic Azad University, Tehran, Iran
Abstract
Consent and party autonomy, along with the neutrality of arbitral tribunal, are the most featured distinction of arbitration vis a vis other dispute resolution methods. These fundamental features, however, might be affected by the application of unilateral economic sanctions of regional organizations (i.e. European Union) which is indeed for protecting their foreign security policy frameworks and fundamental interests.

In one hand, the arbitral tribunals have to respect the parties’ choices, namely the applicable law (which might be against the sanctions), and in the other hand, the courts are obliged to recognized the European Union sanctions as public policy and overriding mandatory provisions and accordingly, set aside or annul the arbitral awards contrary to these provisions.

Therefore, the main aim of this research project is to study of the effect of European Union economic sanctions on commercial arbitration disputes, as well as the approach of pertinent courts. The key result is that arbitral tribunals in confrontation with such sanctions as jus cogens, rely on their authorities particularly in term of applicable law, recognition and enforcement of the arbitration award.
Keywords
Keywords: Economic sanctions regime
European Union
International Commercial Arbitration
Public Policy

Subjects

A) Books
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3. Bockstiegel, Karl-Heinz (1987). Public Policy and Arbitrability, London, Kluwer law International.
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5. Mayer, Pierre, Heuzé Vincent (2019). Private International law, Paris,
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6. Paavilainen, Tatu (2015). Trade sanctions and public policy in international arbitration, Finland, University of Helsinki.
B) Articles
7. Bureiko, Konstantin (2019). U.S. Sanctions and the E.U. Blocking Regulation, Issues of Legal Uncertainty, Financial Markets Law Committee Report, pp.1-41
8. Lester QC, Maya (2019). Italian Judgments on the EU Blocking Regulation, European Sanctions: Law, Practice and Guidance.
9. Mayer, Pierre (2007). Mandatory Rules of Law in International Arbitration, The American review of International Arbitration, PP. 1-20
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11. Scheinert, Christian (2021). Free Movement of Capital, Fact Sheets on the European :union:.
12. Shahani, Garima (2015). Impact of Sanctions Under the CISG, ASA Bulletin
Volume 33, pp. 849-860.
13. Szabados, Tamás (2018). EU Economic Sanctions in Arbitration, Journal of International Arbitration, Volume 35, pp. 439-461.
14. Wautelet, Patrick (2012). Arbitration of Distribution Disputes Revisited; A Comment on Sebastian International Inc v Common Market Cosmetics NV, The Practice of Arbitration: Essays in Honor of Hans van Houtte, Hart, pp. 1-15.
C) Cases
15. Alexander v. Gardner-Denver, 415 U.S. 36, 94 Sct 1011, 39 Led 2d, 147, U.S Supreme Court, 1974.
16. Amsterdam Grain Trade Association, Award of 11 Jan. 1982.
17. Audi-NSU v. Adelin Petit & Cie, Belgian Supreme Court, 28 June 1979.
18. Bank Melli Iran v. Telekom Deutschland GmbH, December 21, 2021.
19. CAM Case No. 1491, Award of the Chamber of Arbitration of Milan, 20 July 1992.
20. Ministry of Defense of the Islamic Republic of Iran v Gould Inc 887 F.2d 1357, certiorari denied, 110 S Ct 1319, 1990.
21. Fincantieri Cantieri Navali Italiani SpA and OTO Melara Spa v ATF, 25, ICC Award No 6719, November 1991.
22. Government and Ministries of the Republic of Iraq v. Armamenti e Aerospazio S.p.A. et al., Italy No. 189, Supreme Court of Cassation of Italy, Case No. 23893, Nov 24, 2015.
23. Hof The Hague 25 juni 2019, zaak- / rolnummer: C/09/573240.
24. Iranian Co Z v. Swiss Co X, 21 January 2014, Case 4A_250/2013.
25. Landgericht, Hamburg District Court, Nov 28, 2018, 319 O 265.
26. Mamancochet Mining Limited v Aegis Managing Agency Limited and Others 2018.
27. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 1973.
28. MGM Productions Group v Aeroflot Russian Airlines, 573 F Supp 2d, 772 (SDNY) 2003.
29. Ministry of Defense and Support for the Armed Forces of the Islamic Republic Of Iran v Cubic Defense Systems, US Court of Appeals for the Ninth Circuit, 2011.
30. Ministry of Defense of the Islamic Republic of Iran v Gould Inc, 887 F.2d 1357, certiorari denied, 110 S Ct 1319, 1990.
31. Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran v International Military Services Ltd, 24 July 2019.
32. Mitsubishi v. Soler Chrysler-Plymouth, 473 U.S. 614, 1985.
33. Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany), Oct 15, 2018.
34. OLG München, May17, 2006 – 7 U 1781/06, IPRax 322, 2007.
35. Parsons & Whittemore Overseas Co v Societe Generale de L'Industrie du Papier (RAKTA), US Court of Appeals, Second Circuit, 1974.
36. Scherk v. Alberto-Culver, 417 U.S 506, US Supreme Court 1974.
37. Sofregaz v. National Gas Storage Company, Paris Court of Appeal, Chamber 5, 16, June 3, 2020.
38. Tissot v. Neff, 29 November 1950.
D) Documents
39. Council Regulation (EEC) 3155/90 of 29 Oct. 1990
40. Council Regulation (EEC) 2340/90, 8 Aug. 1990 preventing trade by the Community as regards
Iraq and Kuwait [1990] OJ L 213/1–2
41. Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (Helms–Burton Act, Pub.L. 104–114, 110 Stat. 785, 22 U.S.C.
42. European Commission, Guidance Note, July 8, 2018.
43. EU Council Regulation on amending the annex to council regulation (EC) No 2271/96/, 2018/1100/ED.
44. European :union:, council regulation (ec) no. 2271/96, Nov 22, 1996.
45. European :union: Council Regulation 267/2012, 23 March 2012.
46. International Law Association's Recommendations on the Application of Public Policy as a Ground for Refusing Recognition or Enforcement of International Arbitral Award.
47. Model Law on International Commercial Arbitration 1985, United Nations Commission on International Trade Law [UNCITRAL], UN Doc A/40/17, Annex I
48. Regulation (EC) No 593/2008 Of The European Parliament and of The Concil, on the law applicable to contractual obligations (Rome I), 17 June, 2008.
49. Treaty on European :union: (Consolidated Version), Treaty of Maastricht, 7 February 1992.
50. Treaty Establishing the European Community, Aug.31, 1992.
51. United Kingdom, Arbitration Act of 1996, June 17, 1996.
52. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June, 1958.
E) Websites
53. https://www.refworld.org/docid/3ae6b39218.html
54. https://lexparency.org/eu/32008R0593
55. https://www.europarl.europa.eu/doceo/document/E-8-2014-007804-ASW_EN.html
56. http://fmlc.org/report-u-s-sanctions-and-the-e-u-blocking-regulation-14-june-2019
57. https://www.europeansanctions.com/2019/10/italian-judgments-on-the-eu-blockingregulation.
58. https://www.mofo.com/resources/insights/190820-helms-burton-blocking-statutes.html
59. https://www.europarl.europa.eu/factsheets/en/sheet/39/free-movement-of-capital
60. http://fmlc.org/report-u-s-sanctions-and-the-e-u-blocking-regulation-14-june-2019
61. https://globalarbitrationreview.com/editorial/1169291/economic-sanctions-implications-for international-arbitration