🇷🇺🇺🇸🇭🇰 A Hong Kong company successfully invoked the 'Lugovoy Act' against a U.S.-based bank in a Russian court.

I have already reported on a case in which a Chinese company successfully blocked an LCIA arbitration clause in a Russian court by invoking the 'Lugovoy Act'. Today, a new case has arisen.

In Case No. А40-232285/23-107-1782, a Russian court assumed exclusive jurisdiction over a matter brought before it by a Hong Kong-based company, which is a subsidiary of a Russian-sanctioned person. Moreover, the Russian court reaffirmed that if a dispute arises from unilateral sanctions, a Russian court ipso facto has exclusive jurisdiction over the matter. A dispute resolution clause designating Hong Kong as the forum was disregarded by the Russian court.

As a result, the Russian court has ordered a U.S.-based bank to pay a Hong Kong-based company over 4 million Hong Kong dollars and over 390,000 U.S. dollars. These amounts were blocked in a bank account due to unilateral sanctions.

The court’s ruling dated June 11, 2025, in Case No. А40-232285/23-107-1782 has not yet entered into force and may be appealed.

A permanent link to the blog post can be found here: https://smnlaw.ru/honkong-lugovoy

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