To Arbitrate or Not to Arbitrate? Arbitrability of Sanctions-Related Disputes in the EU

Upon the Swedish Court of Appeal’s request to the Court of Justice of the European Union (‘ECJ’) for preliminary ruling in NV Reibel v. JSC VO Stankoimport, the article examines the arbitrability of disputes related to EU sanctions regimes using the example of claims under Article 11(1) of Council Regulation (EU) 833/2014 (‘Regulation’). The article establishes the relevant understanding of the concept of arbitrability in the EU before discussing and rejecting the notion that the arbitrability of matters pertaining to the Regulation follows from the Regulation itself, namely from its Article 11(3). The article subsequently takes note of the ECJ’s jurisprudence precluding the interpretation of EU law by arbitral tribunals. While acknowledging the fact that commercial arbitration is commonly exempt from this jurisprudence, the article questions whether this also applies to sanctions-related disputes. The article further assesses jurisprudence on the arbitrability of claims under the Regulation and other EU sanctions regimes from Member-State courts. In this regard, the article points out the lack of civil penalties for transactions in breach of the Regulation as considered by courts in some of these jurisdictions to determine the arbitrability of related disputes. The article concludes that claims under Article 11(1) of the Regulation are arbitrable under EU law.