Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code (APC RF) allow Russian courts to claim exclusive jurisdiction over sanctions-related commercial disputes and to issue anti-suit or anti-arbitration injunctions – backed by financial penalties of up to the full claim amount – against parties who pursue proceedings abroad. For foreign creditors holding unpaid invoices or seeking enforcement of a judgment against a Russian counterparty, this mechanism can transform a straightforward debt collection exercise into a procedural minefield. Understanding how the framework operates, how Russian courts have applied it, and where its limits lie is now an essential step in any cross-border recovery strategy.
The Legislative Architecture: Articles 248.1 and 248.2 APC RF
Russia introduced Articles 248.1 and 248.2 into the APC RF as a direct legislative response to Western sanctions pressure. They form a two-part mechanism: the first pillar asserts jurisdiction; the second enforces that assertion through injunctive relief and economic coercion.
Article 248.1 grants Russian Arbitrazh courts exclusive jurisdiction over disputes involving persons or entities subject to restrictive measures (sanctions), where those measures are found to prevent or materially impede access to a foreign court or arbitral tribunal. The logic is straightforward on its face: if a party cannot obtain a fair hearing abroad because of sanctions-related obstacles, Russia steps in as the competent forum. In practice, however, the provision has been invoked far more broadly than that narrow rationale might suggest.
Article 248.2 provides the enforcement mechanism. A Russian court that has assumed jurisdiction under 248.1 may issue an injunction prohibiting the counterparty from commencing or continuing foreign proceedings. Non-compliance carries a financial penalty – a so-called kompensatsiya – of up to the full amount of the claim in dispute. This is not a nominal sanction. For significant commercial disputes, the kompensatsiya can equal tens or hundreds of millions of roubles, creating enormous pressure on foreign creditors to abandon legitimate international proceedings in order to avoid asset exposure in Russia.
Who Is at Risk: The Practical Profile of a Targeted Creditor
Any foreign entity that holds a claim against a Russian debtor and has assets, subsidiaries, bank accounts or contractual counterparties in Russia is potentially vulnerable. The typical scenarios include:
- A European supplier with an unpaid invoice from a Russian buyer, commencing ICC or LCIA arbitration under the contract's dispute resolution clause;
- A foreign lender seeking to enforce a loan agreement or a court judgment in the jurisdiction where the contract was governed;
- An investor attempting to use a bilateral investment treaty mechanism to recover losses from expropriation or regulatory interference;
- A creditor relying on a payment order obtained in a foreign jurisdiction and seeking recognition or enforcement in Russia.
In each case, the Russian debtor may apply to an Arbitrazh court – typically the court at the debtor's registered seat – for an injunction under Article 248.2 halting the foreign proceedings. If the creditor has any Russian-nexus assets or income streams, the risk of the kompensatsiya being levied against them is real. Even where direct enforcement is impossible, the injunction can complicate the creditor's relationships with Russian counterparties and create reputational and compliance uncertainty for their Russian-law counsel.
Constitutional Court Ruling No. 999-O: A Necessary Corrective
For several years following the introduction of Articles 248.1 and 248.2, courts applied the provisions with considerable latitude, and there was a perception among practitioners that a Russian debtor could trigger the mechanism almost automatically. Constitutional Court Ruling No. 999-O of 29 April 2025 introduced a significant qualification: the exclusive jurisdiction and injunctive relief under these articles are not automatic. The applicant must demonstrate real, concrete obstacles to access to justice in the foreign forum – a mere abstract reference to sanctions is insufficient.
This ruling was analytically important for several reasons. First, it placed the burden on the Russian debtor to adduce evidence, not simply to assert that sanctions create a problem. Second, it signalled that Russian courts should scrutinise applications under Article 248.2 rather than grant them as a matter of course. Third, it provided foreign creditors – and their Russian counsel – with a procedural hook: a creditor facing an injunction application can now challenge the adequacy of the debtor's evidence of actual obstacles.
The practical impact of Ruling No. 999-O should not be overstated, however. The standard it imposes remains vague in application, and individual Arbitrazh courts have interpreted "real obstacles" with varying degrees of rigour. The ruling narrowed the mechanism's theoretical scope without eliminating the risk that a motivated debtor will be able to satisfy a sympathetic court.
Supreme Court Thematic Review No. 8/2026: Consolidating the Practice
By June 2026, the volume of Article 248.1/248.2 litigation had grown sufficiently that the Supreme Court of Russia published Thematic Review No. 8/2026, consolidating the developing case law. This review represents the most authoritative guidance available on how Arbitrazh courts are expected to apply the provisions in practice, including the evidential standards articulated in Ruling No. 999-O.
For foreign creditors, the review is both a resource and a warning. It signals that the mechanism is now an embedded feature of Russian commercial procedure – not a temporary emergency measure – and that courts across the country are expected to apply it consistently. At the same time, it reflects the evolution toward a more structured, evidence-based approach, which creates space for well-prepared defendants to contest applications on the merits.
Cross-Border Implications: Late Payment Interest, Asset Freezing and Enforcement of Judgments
The interaction between Articles 248.1/248.2 and other procedural tools creates layered complexity for foreign creditors. Several dimensions merit particular attention.
Late payment interest and debt recovery. A creditor who has obtained a payment order or judgment abroad and seeks to collect late payment interest as part of the claim faces the risk that any attempt to enforce in Russia – or to use foreign proceedings to establish the quantum of the debt – will be met with an Article 248.2 injunction. This can effectively trap the creditor in a forum they did not choose, under procedural rules they may be unfamiliar with.
Asset freezing. Russian Arbitrazh courts have procedural powers to order interim asset freezing measures in support of domestic proceedings. If a debtor successfully invokes Article 248.1, it can simultaneously seek a freeze on the creditor's Russian-nexus assets – including receivables from Russian counterparties – to secure the kompensatsiya claim. The practical effect can be to immobilise funds that the creditor expected to repatriate.
Enforcement of foreign judgments and awards. Recognition and enforcement of foreign judgments in Russia has always been subject to the reciprocity and public policy filters applicable under Russian procedure. Articles 248.1/248.2 add a further layer: a foreign judgment rendered in proceedings that were the subject of a Russian anti-suit injunction may be refused recognition on the basis that the foreign court lacked jurisdiction under Russian law. This creates a direct conflict between the recognition rules of the creditor's home jurisdiction and those of Russia.
Government Commission oversight. Transactions involving foreign parties and Russian debtors – including settlement agreements and cross-border payments – may also require clearance from the Government Commission on the Control of Foreign Investment. This adds a further procedural and timeline constraint that foreign creditors must map before any recovery strategy is finalised.
If your organisation is navigating a Russia-related debt collection or enforcement matter, the strategic interaction between these procedural mechanisms is a critical early assessment. Ferraz & Whitmore's team is available to discuss your situation at info@ferrazwhitmore.com or via our contacts page.
Strategic Options for Foreign Creditors
Given this environment, foreign creditors require a carefully sequenced approach. No single strategy eliminates the risk posed by Articles 248.1/248.2, but a combination of the following measures can materially reduce exposure and preserve optionality.
- Early assessment of Russian-nexus exposure. Before commencing any foreign proceedings, creditors should map their Russian-nexus assets – including subsidiaries, receivables, bank accounts and counterparty relationships – to understand what could be subject to a kompensatsiya levy or asset freeze.
- Choice of forum and governing law review. Where contracts are not yet in dispute, revisiting the dispute resolution clause to minimise the debtor's ability to invoke Articles 248.1/248.2 may be worthwhile. Where proceedings have already commenced, early advice on whether the chosen forum creates additional vulnerability is essential.
- Challenging the evidential threshold. Following Ruling No. 999-O, foreign creditors served with an Article 248.2 application have a legitimate basis to contest the adequacy of the debtor's evidence of real obstacles. This requires timely engagement with Russian procedural counsel who are familiar with both the constitutional ruling and the Supreme Court's Thematic Review No. 8/2026.
- Parallel enforcement outside Russia. Where the debtor has assets in third-country jurisdictions – including jurisdictions with favourable enforcement treaties or practice – pursuing enforcement of judgment there in parallel may allow recovery without direct exposure to the Russian procedural framework.
- Monitoring the Government Commission process. Any negotiated resolution involving cross-border payment will need to account for applicable Government Commission requirements. Understanding the current approval landscape is a prerequisite to structuring any settlement.
- Anti-suit countermeasures. Some jurisdictions are developing their own anti-suit or anti-enforcement mechanisms in response to instruments like Articles 248.1/248.2. Creditors with a strong connection to those jurisdictions should assess whether such tools are available. For context on how other legal systems are approaching analogous issues, see our analysis of Switzerland's Article 29d anti-suit shield.
For clients with broader Russia sanctions and trade compliance concerns that intersect with debt recovery, our sanctions and trade practice for Russia addresses the regulatory dimension of cross-border positions.
Open Questions and the Evolving Landscape
Despite the consolidating effect of Supreme Court Thematic Review No. 8/2026 and the Constitutional Court's intervention, a number of important questions remain unresolved or contested in practice.
First, the precise evidential standard for "real obstacles" under Ruling No. 999-O has yet to be uniformly applied. Some Arbitrazh courts continue to accept relatively thin evidence; others require detailed documentation of the specific procedural impediment in the foreign forum. Until higher-court supervision produces a more consistent standard, outcome predictability for foreign creditors remains limited.
Second, the interaction between Articles 248.1/248.2 and Russia's international arbitration obligations – including its commitments under bilateral investment treaties and the New York Convention – remains legally contested. Russian courts have so far applied domestic procedure without significant deference to international arbitration principles, but this tension may generate further litigation and, potentially, further rulings from the Supreme Court or the Constitutional Court.
Third, the scope of the "sanctions-related" trigger in Article 248.1 is not precisely defined by statute. Courts have interpreted it to cover not only parties who are themselves directly sanctioned, but also parties whose operations are affected by sanctions on their counterparties, on correspondent banks, or on the broader transaction environment. This expansive reading increases the pool of potential applicants and, correspondingly, the number of foreign creditors who may find themselves targeted.
Outlook
The Russian legislature's introduction of Articles 248.1 and 248.2, and the subsequent refinement of their application through Constitutional Court Ruling No. 999-O and Supreme Court Thematic Review No. 8/2026, reflects a deliberate policy choice to use procedural law as a tool of economic statecraft. The mechanism is unlikely to be repealed in the current geopolitical environment, and the appetite of Russian Arbitrazh courts to exercise the jurisdiction it confers appears durable.
For foreign creditors, the practical consequence is that Russia-related debt recovery and enforcement of judgment strategies must now be designed with Articles 248.1/248.2 as a baseline constraint rather than an exceptional risk. Claims that might previously have been pursued through international arbitration or foreign court proceedings with relative confidence now require a more granular assessment of the Russian procedural landscape, the debtor's likely litigation behaviour, and the creditor's own exposure profile.
Ferraz & Whitmore advises international clients on cross-border debt collection and enforcement strategies involving Russia. Our debt recovery practice for Russia covers the full cycle from claim analysis to enforcement, including assessment of Article 248.1/248.2 exposure. If you are dealing with an unpaid invoice, a payment order dispute or a judgment enforcement challenge, we welcome an initial discussion at info@ferrazwhitmore.com or through our contacts page.
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.