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Trade Sanctions and Public Policy in International Arbitration

JFT 5/2016 s. 523–540
15.12.2016
Asiantuntija-artikkeli

If a trade sanction forms a part of the lex causae, an arbitrator should as a general rule apply it. Trade sanctions may, however, have an effect on the parties’ contractual performances even outside the applicable law if a trade sanction emanating from a third country renders the contractual performance impossible, or subjects a party to criminal or administrative sanctions for failure to comply with such sanctions.

This article aims to answer two specific questions in relation to such situations. First, it is asked whether an arbitrator may apply or give effect to trade sanctions that do not form a part of the lex causae, and

if so, in what manner. For instance, can American trade sanctions or Russian import restrictions be given effect in an arbitration governed by Finnish substantive law involving Finnish and Russian parties?

Second, it is discussed whether a failure to give effect to trade sanctions by arbitrators may lead to a situation where the arbitral

award may be set aside or refused recognition and enforcement in Finnish judiciaries. Can judges in Finnish judiciaries adjust the material conclusions of arbitral awards, should they fail to give effect to applicable trade sanctions? (Edilex-toimitus)

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