EU sanctions and the enforcement of Russian judgments and arbitral awards: the emerging European public policy approach

Luciano Castelli and Elisa Rizzi
LCA Studio Legale

Introduction

This article examines the growing intersection between EU sanctions on Russia and the recognition and enforcement of foreign judgments and arbitral awards in European courts. Recent judicial developments across multiple Member States reveal an emerging consensus that compliance with EU restrictive measures constitutes a fundamental element of European public policy. The analysis centers on Advocate General Biondi’s February 2026 Opinion in Reibel v. Stankoimport (C-802/24), in which he proposed treating EU sanctions as part of European public policy. If the Court of Justice endorses this approach, Member State courts will be required – not merely permitted – to refuse enforcement where it would breach EU sanctions. The article reviews the relevant EU sanctions framework, particularly Article 11 of Regulation No. 833/2014, examines the enforcement paradox created by criminal liability provisions, and surveys the emerging judicial consensus across Italy, Germany, France and Sweden.

EU sanctions and the public policy exception

The public policy exception, one of the principal safeguards governing the recognition and enforcement of foreign decisions within EU Member States, enables a court to refuse recognition or enforcement where the resulting effects would be manifestly incompatible with the fundamental principles underpinning its legal order. Importantly, the enforcing court cannot reconsider the merits of the underlying foreign decision; the relevant inquiry concerns only the consequences that recognition or enforcement would produce. The central issue is whether compliance with EU restrictive measures should itself be regarded as part of public policy. Although Member States have historically taken differing approaches, recent case law increasingly points towards an affirmative answer.

Article 11 and the EU Sanctions Regime

The EU sanctions regime concerning Russia, principally embodied in Regulations Nos. 269/2014 and 833/2014, extends beyond freezing the assets of designated persons and entities. Article 11 of Regulation No. 833/2014 contains a “no-claims” provision preventing the satisfaction of claims brought by Russian persons, entities or bodies where those claims arise out of contracts or transactions affected by EU restrictive measures.

The prohibition applies not only to claims seeking contractual performance or damages, but also to claims for reimbursement of advance payments. As Advocate General Biondi observed in the above-mentioned Reibel case, the prohibition cannot be avoided by reformulating the legal basis of the claim, as it remains incapable of satisfaction whether characterised as contractual, restitutionary or tortious.

Payments to Russian counterparties may be prohibited in two circumstances: where the recipient is a designated person or entity listed in Annex I to Regulation No. 269/2014, or where payment would be processed through a sanctioned Russian financial institution. Given the number of sanctioned Russian financial institutions, the latter scenario has significant consequences for ordinary commercial payments.

Criminal liability and the enforcement paradox

The issue becomes still more significant in jurisdictions in which violations of EU sanctions attract criminal liability.

Italy provides a notable example. Legislative Decree No. 211/2025, implementing EU Directive No. 2024/1226, introduced Article 275-bis of the Italian Criminal Code, under which violations of EU restrictive measures may be punished by imprisonment from two to six years and fines up to €250,000. Comparable provisions are being introduced in other Member States.

This creates an enforcement paradox: if a domestic court enforced a Russian judgment requiring a payment prohibited by sanctions, it would compel conduct that domestic criminal law simultaneously prohibits and punishes—precisely the type of consequence that the public policy exception is intended to prevent.
The assessment concerns the effects of enforcement at the time when enforcement is sought, rather than the merits of the original dispute. Consequently, a party may challenge the present or future legal consequences of enforcing a foreign decision. Public policy compliance must be considered by courts ex officio, regardless of whether objections were raised in the foreign proceedings.

The emerging European judicial consensus

A growing body of European case law supports the proposition that sanctions compliance forms part of national and European public policy.

The Italian Court of Cassation addressed the issue in 2015 in a case concerning sanctions against Iraq in the context of a helicopter sale agreement (Joint Sections, judgment No. 23893/2015). The Court held that supranational sanctions form part of international public policy and observed that failure to enforce them could expose the State to consequences for non-compliance.

In recent years, other European courts have developed a similar approach. In 2025, the Court of Appeal of Stuttgart became the first German court to refuse enforcement of a Russian arbitral award on sanctions and public policy grounds (case No. 1 Sch 3/24). The award required a German party to reimburse an advance payment relating to a sanctions-affected supply contract. The Court concluded that EU sanctions formed part of German law and enforcement would require prohibited conduct. In a similar case, the Frankfurt Court of Appeal subsequently followed this reasoning, rejecting the argument that reimbursement should be permitted merely because it restored the parties to their pre-contractual position (case No. 26 Sch 12/24).

French jurisprudence points in the same direction. In Sofregaz v. NGSC the Paris Court of Appeal recognised EU and UN sanctions as forming part of French international public policy on the basis that they contribute to international peace and security (case No. 19/07261). 

Finally, in Sweden, the Svea Court of Appeal of Stockholm, in TNG v. FNP (case No. T-2082-23), held that EU sanctions legislation concerns fundamental principles of the Swedish legal order.

Reibel v. Stankoimport: Towards a European rule?

The pending proceedings in the Reibel case may provide the CJEU with the opportunity to establish definitively that EU sanctions form part of European public policy and, at the same time, clarify the proper scope of Article 11.

The dispute arose from a 2015 contract between Belgian company NV Reibel and Russian company JSC Stankoimport for the supply of dual-use goods intended for the manufacture of helicopter components. Swedish law governed the contract, which contained a Stockholm arbitration clause and expressly provided that EU sanctions would not constitute force majeure. After the Belgian authorities refused the necessary export licence, Stankoimport commenced arbitration seeking repayment of its advance payment together with damages.

In 2021, the Stockholm arbitral tribunal ordered Reibel to reimburse the advance payment, distinguishing between reimbursement (restoring the parties to their pre-contractual position) and damages (conferring a financial advantage prohibited by Article 11). Reibel challenged the award before the Swedish courts, which referred questions to the CJEU concerning whether Article 11 prevents amicable settlement of such claims, whether courts must examine ex officio the correct application of the prohibition, and whether Article 11 encompasses repayment claims.

Advocate General Biondi addressed these questions in his February 2026 opinion.

First, he considered that sanctions-related disputes remain arbitrable. Arbitral tribunals may hear such disputes, but cannot grant enforceable relief resulting in the satisfaction of a claim prohibited by Article 11. Second, the Advocate General concluded that EU restrictive measures are integral to the EU’s role in promoting peace and security, and therefore the prohibition against satisfying claims covered by the sanctions regime forms part of the public policy of the European Union.

The opinion adopts a broad interpretation of Article 11 consistent with its anti-circumvention purpose: changing the legal characterisation of a claim cannot escape the prohibition, and even restitution intended merely to restore the status quo ante may fall within Article 11. At the same time, Advocate General Biondi contemplated intermediate solutions: a tribunal or court could recognise a claim while suspending enforcement, or grant declaratory relief while postponing payment until the restrictive measures cease to operate.

Conclusion

The developing European case law reveals an increasingly clear trend: compliance with EU sanctions is moving beyond ordinary mandatory rules towards recognition as an element of European public policy. Where enforcement would require conduct prohibited by EU restrictive measures, national courts are increasingly treating sanctions compliance as a limit that cannot be displaced by ordinary principles favouring recognition and enforcement.

The forthcoming judgment in Reibel, expected between late 2026 and early 2027, may consolidate this development. If the Court follows Advocate General Biondi’s opinion, Member State courts will be required to examine sanctions compliance ex officio and prevent enforcement of awards producing results contrary to EU restrictive measures. For parties involved in Russia-related disputes, as well as the wider arbitration community, the judgment will be of considerable importance, potentially defining the boundaries of an emerging European ordre public in the field of sanctions.