On 23 April 2026, the Council of the European Union adopted Regulation (EU) 2026/506, introducing direct anti-suit protection for EU persons targeted by litigation brought in Russian courts in breach of valid jurisdiction or arbitration clauses. The Regulation applies where the opposing party is subject to EU sanctions, and it equips EU companies with concrete procedural tools to resist and counteract such abusive proceedings. Switzerland has adopted a parallel measure under Article 29d of its private international law framework, extending comparable protections beyond the EU's borders.
Why This Regulation Was Adopted
Since the introduction of broad EU sanctions against Russia, a pattern has emerged of sanctioned Russian entities bringing claims in Russian courts against EU counterparties, even where contracts contained exclusive jurisdiction clauses in favour of EU courts or international arbitration. These proceedings have been used to obtain Russian judgments on disputed invoices, asset freezing orders and payment orders that EU companies then struggle to ignore when operating globally. The practical effect has been to weaponise domestic Russian litigation as a tool to circumvent both contractual agreements and the sanctions regime itself.
Regulation 2026/506 addresses this directly. It creates a legal mechanism by which EU persons can obtain protection from EU courts against such proceedings, reinforcing the primacy of agreed dispute-resolution clauses and reducing the risk that a Russian judgment – whether on an unpaid invoice, a debt collection claim or a broader damages action – could be leveraged against EU assets or operations.
What the Regulation Does
The core of Regulation 2026/506 is the establishment of an anti-suit protection framework applicable where the following conditions are met:
- An EU person is a party to proceedings initiated or continued in Russia.
- The Russian proceedings are brought by, or on behalf of, a person subject to EU restrictive measures (sanctions).
- Those proceedings are in breach of a contractual jurisdiction clause or arbitration agreement designating a forum outside Russia.
Where these conditions are satisfied, the Regulation enables EU persons to seek relief from competent EU courts, including measures aimed at neutralising the effect of Russian enforcement of judgment decisions. The Regulation also provides a basis for EU courts to issue orders that protect EU persons from being compelled to participate in or comply with such proceedings.
Importantly, the Regulation interacts with existing EU sanctions architecture – including asset freezing prohibitions – by clarifying that complying with a Russian court order obtained in these circumstances may itself be inconsistent with EU sanctions obligations. Companies should take legal advice before making any payment or taking any step in response to a Russian judgment, as doing so could expose them to sanctions risk.
Who Is Affected
The Regulation applies to EU persons broadly defined, including companies incorporated in EU Member States, subsidiaries of non-EU groups operating within the EU, and individuals habitually resident in the EU. It is particularly relevant for:
- Companies with outstanding commercial disputes or unpaid invoices owed by or to sanctioned Russian counterparties.
- Businesses that have existing contractual relationships with Russian entities governed by EU or third-country law with non-Russian jurisdiction or arbitration clauses.
- Financial institutions and trading companies already engaged with European Banking Authority (EBA) or European Securities and Markets Authority (ESMA) compliance frameworks, who may now face an additional layer of litigation risk from Russia.
- Companies that have already received, or are at risk of receiving, a Russian payment order or debt collection claim.
Non-EU entities that have European operations or assets should also take note. A Russian judgment targeting an EU subsidiary could trigger enforcement attempts within the EU, and the Regulation provides grounds for resisting such enforcement of judgment actions before EU courts.
The Swiss Parallel Measure
Switzerland has adopted a parallel provision under Article 29d of its Federal Act on Private International Law. While the precise procedural contours of the Swiss mechanism are subject to Swiss national rules, the substantive policy objective mirrors that of Regulation 2026/506: to protect persons in Switzerland from being subjected to litigation in Russia that disregards agreed dispute resolution clauses. Companies with operations in both the EU and Switzerland should assess their exposure under both frameworks, as the protections available – and any obligations that may attach – are governed by separate legal regimes.
Immediate Actions for International Companies
The adoption of Regulation 2026/506 creates both new protections and new compliance considerations. Companies should address the following without delay:
- Audit existing contracts with Russian counterparties. Identify all agreements containing jurisdiction or arbitration clauses, and assess whether any of those counterparties are subject to EU sanctions. If a sanctioned counterparty has commenced or threatened proceedings in Russia, the Regulation may be engaged.
- Review any pending Russian litigation. If your company has already been served with a Russian claim, payment order or debt collection demand, assess whether Regulation 2026/506 applies and whether protective measures should be sought from an EU court.
- Do not respond to Russian proceedings without advice. Participating in Russian proceedings – even defensively – may have consequences under EU sanctions rules. Any step taken should be assessed in advance against the sanctions framework and the Regulation.
- Assess asset freezing risk. Consider whether Russian courts may attempt to freeze assets of EU subsidiaries or affiliates as part of pending claims. If there is a realistic prospect of such orders, pre-emptive protective measures within the EU may be available.
- Consider restructuring exposure. For companies with significant ongoing exposure to Russian counterparties, it may be appropriate to review contractual and corporate structures in light of both the Regulation and the broader sanctions environment. The intersection with insolvency risk is also relevant – for guidance on restructuring considerations, see our overview of bankruptcy and restructuring advisory services.
Companies operating in Italy or other EU Member States with active debt recovery proceedings involving cross-border elements should also consider how this Regulation interacts with their existing recovery strategies. Further detail on enforcement mechanisms in EU jurisdictions is available in our guidance on debt recovery in Italy.
Interaction with EU Courts and Commission Guidance
Regulation 2026/506 operates within the existing EU legal order. The European Commission is expected to publish guidance on its application, and the Court of Justice of the European Union (CJEU) will ultimately have jurisdiction to interpret its provisions in cases referred by Member State courts. EUR-Lex contains the full text of the Regulation and will serve as the authoritative reference for companies and practitioners.
National courts in EU Member States are the primary forum for relief under the Regulation. The precise procedural rules – including how applications for protective measures are to be made, what evidence is required, and how late payment interest or other ancillary claims are to be treated – will be subject to national procedural law pending any further harmonisation. Companies should not assume uniform procedures across Member States.
If your company has received Russian court process or is concerned about potential exposure under the new Regulation, our team is available to assess your position. Please contact us at info@ferrazwhitmore.com or visit our contacts page to arrange a consultation.
A Broader Shift in EU Sanctions Practice
Regulation 2026/506 represents a significant evolution in how the EU approaches the intersection of sanctions and private litigation. Until now, sanctions primarily operated as prohibitions on transactions and asset dealings. This Regulation takes a further step by actively intervening in the procedural domain – protecting EU persons not merely from economic dealing with sanctioned entities, but from being coerced through foreign judicial proceedings into outcomes that sanctions policy is designed to prevent.
The adoption of a parallel Swiss measure signals that this approach may become a broader standard among jurisdictions aligned with the EU sanctions framework. Companies with global operations should monitor whether further jurisdictions adopt comparable protections, and ensure that their dispute resolution strategies reflect the new landscape.
For a comprehensive analysis of the Regulation's scope, procedural mechanics, and interaction with existing sanctions obligations, see our dedicated briefing: EU Anti-Suit Shield Against Russian Litigation.
If you would like to discuss how Regulation 2026/506 affects your company's specific contracts, ongoing disputes, or risk exposure, please reach out to our team at info@ferrazwhitmore.com or through our contacts page. We can assist with reviewing existing agreements, advising on the availability of protective measures, and coordinating advice across multiple EU jurisdictions.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.