On 13 May 2025, the Higher Regional Court of Stuttgart ruled that arbitral awards that order a party to act in breach of EU sanctions are not enforceable in Germany. A Gleiss Lutz team won the case for a medium-sized engineering company based in southwestern Germany.
Before Russia commenced its war of aggression against Ukraine, the parties had concluded a contract for the supply of machinery with an arbitration clause and a place of arbitration in Russia. The Russian counterparty and applicant in the recognition and enforcement proceedings brought arbitration proceedings before the Chamber of Commerce and Industry of the Russian Federation in Moscow. This resulted in a Russian arbitral award ordering the respondent to act in breach of EU sanctions. The Russian applicant requested that the Higher Regional Court of Stuttgart recognize the arbitral award and declare it enforceable, which the Court denied for a violation of public policy. The Court held that the respondent’s performance was currently prohibited under EU sanctions.
The decision of the Higher Regional Court of Stuttgart is of fundamental significance for the recognition of foreign arbitral awards that do not comply with EU sanctions. An appeal against the Court’s ruling on a point of law can still be brought before Germany’s Federal Court of Justice.
The following Gleiss Lutz team advised on the case before the Higher Regional Court of Stuttgart: Prof. Stephan Wilske (partner), Dr. Claudia Krapfl (counsel), Dr. Friedrich Weyland (all Dispute Resolution/Arbitration, Stuttgart).
For further information, please see https://www.gleisslutz.com/en/news-events/know-how/disputes-russian-companies-protecting-european-companies-against-enforcement-russian-judgments-and-arbitral-awards
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