The Russian sanctions regime and its interpretation in the context of UK litigation, where the claimant is a designated person under the sanctions regime of the Sanctions and AntiMoney Laundering Act 2018 (‘SAMLA’) and the Russia (Sanctions) (EU Exit) Regulations 2019 (‘RSR’), was the focus of examination in the case of PJSC National Bank Trust & Anor v Mints & Ors [2023] EWHC 118 (Comm). Case Summary In June 2019, the claimant Russian banks, PJSC National Bank Trust (‘C1’) and PJSC Bank Otkritie Financial Corporation (‘C2’), issued proceedings claiming damages of $850 million from a number of Russian businessmen (‘D1-D4’), on the basis that they had conspired with representatives of C1 and C2, to cause the banks to enter into uncommercial transactions (the ‘proceedings’). Shortly after Russia’s invasion of Ukraine, C2 was placed on the sanctions list by the UK government. The effect of the sanctions regime is that all the assets or economic resources of a designated person are frozen, and no one can deal with them. Further, no person may make assets or economic resources available to a designated person. To do either of these things is a criminal offence. D1-D4 applied to the High Court for the proceedings to be stayed and to be released from various undertakings that they had given in connection with freezing orders made against them on the basis that: 1. The entry of a judgment in favour of a sanctioned claimant would have the effect of making funds available to a designated person and would therefore be unlawful under the RSR. 2. Similarly, it would not be possible for the defendants to satisfy a costs order in favour of C1 or C2 because to do so would also have the effect of making funds available to a designated individual in breach of the RSR. 3. The effect of the RSR was that a sanctioned party was prevented from: a. satisfying an order to pay adverse costs; b. providing security for costs; or c. paying damages in respect of a cross undertaking for damages, because such payments would constitute ‘dealing’ with frozen assets and such actions did not fall SPECIAL FEATURE 33 Special Feature With significant sanctions now in force regarding organisations connected with the Russian government, their interpretation as far as UK litigation extends has become a significant concern for many. In this article by Robert Pollock-Hill, partner in Rosling King’s Dispute Resolution Group, we take a look at the judgment in the case of PJSC National Bank Trust & Anor and assess its implications. The Russian Sanctions Regime and UK Litigation
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