An Analysis of the Role and Impact of International Sanctions on the Process of International Commercial Arbitration and the Enforcement of Arbitral Awards in the Light of International Law
Volume 1, Issue 9, September 2025, Pages 552-558
https://doi.org/10.5281/zenodo.17507819
Ameneh Abyar
Abstract Economic sanctions are an increasingly central instrument of statecraft. Their proliferation since the early 2000s — and particularly after 2014 and 2022 in response to high-profile geopolitical events — has created complex tensions between public international law, domestic sanctions regimes, and the private-law regime of international arbitration. This article analyzes how sanctions shape (1) the jurisdictional and arbitrability questions tribunals face, (2) procedural conduct and due process in arbitration, and (3) the recognition and enforcement of arbitral awards in domestic courts. First, the paper maps the legal architecture: the New York Convention, ICSID framework, UNCITRAL rules, domestic sanctions regimes (notably U.S. OFAC and EU restrictive measures) and counter-measures such as EU blocking statutes. Second, it examines doctrinal fault lines — choice of law, public policy defenses, supervening impossibility/frustration, and state immunity — and how tribunals and courts have addressed them. Third, it surveys practical impediments: asset freezes that render awards effectively unenforceable, restrictions on counsel/arbitrators caused by sanctions, seat selection and institutional compliance, and the chilling effect on dispute settlement. The analysis integrates recent scholarship and institutional guidance to show that (a) sanctions often convert solvable contractual disputes into multi-jurisdictional legal puzzles; (b) tribunals retain procedural and substantive tools to manage sanctions-related disputes but their remedies are uneven; and (c) enforcement of awards is increasingly contestable where sanctions and sovereign immunity intersect. The paper concludes with recommendations: refined drafting (sanctions clauses, payment/escrow mechanisms), tribunal powers to order interim relief cognizant of sanctions law, coordinated institutional guidance, and diplomatic-legal responses (blocking statutes, targeted licenses) to protect the effectiveness of international arbitration without undermining legitimate sanctions policy.