The firm’s arbitration team has secured a landmark victory: its lawyers successfully defended the interests of the world’s largest producer of nickel and palladium in the LCIA and subsequently secured enforcement in Hong Kong of an arbitral award for more than €30 million against a Canadian bank.
The dispute arose out of bank guarantees. In 2022, a Russian company issued demands for payment to a Canadian bank, but the bank refused to pay relying on Canadian sanctions. In summer 2025, our lawyers secured a victory on all key issues in the LCIA proceedings. The arbitral tribunal dismissed the bank’s sanctions defence and ordered it to pay the debt with interest.
The Russian company then applied to the Hong Kong courts to enforce the award. The bank opposed enforcement, again relying on Canadian sanctions. According to the bank, enforcement of the arbitral award would be contrary to Hong Kong public policy, as it would expose the bank and its employees to the risk of criminal prosecution for breaching Canadian sanctions.
On 3 June 2026, the High Court of Hong Kong dismissed the bank’s arguments in their entirety. In particular, the court was not persuaded that there was a real risk of actual prosecution. However, even if such a risk had existed, Hong Kong public policy would still not have been engaged. The court made an important finding that Hong Kong public policy should not be dictated by the idiosyncrasies of any particular domestic regulatory environment, as such vulnerability would be fundamentally inconsistent with the pro-enforcement ethos of the New York Convention. The court expressly stated that it should not be required to choose between the foreign policies of different states. Canadian sanctions do not apply in Hong Kong and do not form part of its public policy. Accordingly, the award shall be enforced.
This decision is of precedential and historic value for cross-border disputes involving the Russian business. The Hong Kong judiciary has reaffirmed its commitment to the New York Convention and its readiness to prevent sanctions from being used as a universal tool for evading obligations.
The decision will undoubtedly become an important reference point for other Russian creditors in Hong Kong and may serve as guidance for courts in other jurisdictions on the topical issue of the interplay between foreign sanctions and public policy.
The case has drawn close attention from international law experts and leading business media. The team’s successful strategy and the details of the proceedings were also covered by GAR (Global Arbitration Review), a leading international arbitration journal, further underscoring the firm’s standing and expertise in the global disputes market.
On behalf of Nikolskaya the case was handled by: partners Alexei Roudiak and Ivan Teselkin, associates Alexey Vyalkov, Alexander Sopko, and Yaroslav Druzhkin.
The dispute arose out of bank guarantees. In 2022, a Russian company issued demands for payment to a Canadian bank, but the bank refused to pay relying on Canadian sanctions. In summer 2025, our lawyers secured a victory on all key issues in the LCIA proceedings. The arbitral tribunal dismissed the bank’s sanctions defence and ordered it to pay the debt with interest.
The Russian company then applied to the Hong Kong courts to enforce the award. The bank opposed enforcement, again relying on Canadian sanctions. According to the bank, enforcement of the arbitral award would be contrary to Hong Kong public policy, as it would expose the bank and its employees to the risk of criminal prosecution for breaching Canadian sanctions.
On 3 June 2026, the High Court of Hong Kong dismissed the bank’s arguments in their entirety. In particular, the court was not persuaded that there was a real risk of actual prosecution. However, even if such a risk had existed, Hong Kong public policy would still not have been engaged. The court made an important finding that Hong Kong public policy should not be dictated by the idiosyncrasies of any particular domestic regulatory environment, as such vulnerability would be fundamentally inconsistent with the pro-enforcement ethos of the New York Convention. The court expressly stated that it should not be required to choose between the foreign policies of different states. Canadian sanctions do not apply in Hong Kong and do not form part of its public policy. Accordingly, the award shall be enforced.
This decision is of precedential and historic value for cross-border disputes involving the Russian business. The Hong Kong judiciary has reaffirmed its commitment to the New York Convention and its readiness to prevent sanctions from being used as a universal tool for evading obligations.
The decision will undoubtedly become an important reference point for other Russian creditors in Hong Kong and may serve as guidance for courts in other jurisdictions on the topical issue of the interplay between foreign sanctions and public policy.
The case has drawn close attention from international law experts and leading business media. The team’s successful strategy and the details of the proceedings were also covered by GAR (Global Arbitration Review), a leading international arbitration journal, further underscoring the firm’s standing and expertise in the global disputes market.
On behalf of Nikolskaya the case was handled by: partners Alexei Roudiak and Ivan Teselkin, associates Alexey Vyalkov, Alexander Sopko, and Yaroslav Druzhkin.
