In the 2024 edition of the Yearbook, we discussed key sanctions-related judgments of the English courts and the implications for financial institutions balancing obligations under the UK sanctions regime with contractual obligations to clients and counterparties. Now, over three years into the expanded international sanctions regime against Russia, we provide a snapshot of the state of UK sanctions litigation in 2025 and look ahead.
It is more than three years since the massive expansion of financial, trade and other sanctions imposed by the UK and other Western governments on Russia and its allies following the Russian invasion of Ukraine in February 2022.[1] Unsurprisingly, given the scale of restrictions imposed, many disputes have arisen as parties seek to comply with their commercial obligations within the boundaries of the complex and ever-changing international sanctions regime.
The English courts have been asked to resolve many of those disputes. The combination of legal, commercial and broader policy issues thrown up in sanctions-related disputes has proven challenging for not just the parties involved but also the courts, with appellate courts reversing prior judgments on appeal in key cases such as RTI Ltd v MUR Shipping and Celestial Aviation v UniCredit.[2] In parallel, the UK Office of Financial Sanctions Implementation (OFSI) has acknowledged the “intense uncertainty” associated with the rapidly expanded regime and has invested significantly in areas such as licensing and the provision of additional guidance in an attempt to enhance business confidence through greater transparency and predictability.[3] To illustrate, OFSI reported in March 2025 that in the prior year it had increased its licensing function fourfold, doubled its guidance and engagement function, and launched an online repository of up-to-date answers to over 140 of its frequently asked questions to supplement its primary published guidance. While such an expansion in support has been welcomed, the framework of international sanctions regulations remains difficult to navigate for financial institutions and other businesses.
Snapshot: Sanctions litigation in 2025
The number of new sanctions-related commercial claims has levelled off over the past 12 months following the flurry observed in 2023, which was driven in large part by claims for insurance coverage of aircraft and engines stranded in Russia from February 2022. Nevertheless, recent judgments from the English courts, including in high-profile sanctions designation challenges such as that involving the superyacht Phi,[4] have demonstrated that they continue to provide a valuable role in assisting commercial counterparties and other relevant actors to resolve sanctions-related disputes and in developing the associated body of caselaw.
1.
The English courts support commercial parties affected by sanctions in contentious and non-contentious cases by granting directions and declarations. This type of relief provides clarity in difficult cases as to the legality of actions that commercial parties are concerned may breach sanctions regulations and risk civil and criminal liability.
Thomas v PJSC National Bank Trust (January 2025)[5]
The High Court permitted trustees in bankruptcy to make distributions in two bankruptcies to a Russian bank (“NBT“) via payments to the client account of its solicitors. NBT was regulated and majority owned by the Central Bank of Russia and was in run-off following its collapse in 2014. The decision (i) adds to caselaw concerning whether an entity is “controlled” by a designated person such that sanctions will apply. Unlike in the earlier case of PJSC National Bank Trust v Mints,[6]NBT did not concede in this case that it was subject to the “control” of a designated person (i.e. President Putin) and, after having discussed and applied the legal test for control established in recent cases, the Court concluded that NBT was not in fact controlled by a designated person. The decision also (ii) demonstrates the Court’s willingness to assist commercial parties, even in “friendly” (i.e. unopposed) cases, to understand what the law is, particularly where the legal question is difficult and the consequences of being wrong entail criminal liability. The Court ultimately made directions permitting the distributions under the Insolvency Act. However, the Court’s reasoning applied principles relevant to the grant of declaratory relief and left open the possibility that a declaration as to no criminal liability may be granted in an appropriate case.
2.
The English courts continue to be called upon to assist commercial parties by granting anti-suit injunctions to restrain foreign proceedings. Although the grant of an anti-suit injunction is a discretionary remedy, the English commercial courts have generally proven willing to grant them in sanctions cases in support of the UK’s sanctions regulations. The recent Court of Appeal decision in Renaissance Securities (discussed below) is significant as the claim’s procedural history (i) illustrates different circumstances in which the courts will and will not be prepared to grant an anti-suit injunction in a sanctions context and (ii) clarifies that the courts may grant an anti-suit injunction even where there is no alternative forum for the claim to be heard.
Renaissance Securities v ILLC Chlodwig Enterprises (April 2025)[7]
Although the appellant in this case was unsuccessful in maintaining an interim anti-suit injunction to restrain certain proceedings in Russia, the Court would have been prepared to grant the relief in principle even if it meant there was no alternative forum for the claims to be heard. In overview, the appellant (“RS“) entered investment service agreements with several Russian companies (“Cs“), which were governed by English law and provided for English seated arbitration. Following a dispute arising, the Cs requested the return of assets held pursuant to the agreements and RS refused on the basis that it was precluded from doing so by sanctions. RS obtained an anti-suit injunction to restrain proceedings brought against it by the Cs in Russia, on the basis of breach of the relevant arbitration clause. The Cs also brought proceedings in the Russian courts against RS’s Russian affiliated companies, based on the Cs contractual claims against RS. RS sought to additionally restrain the Russian proceedings against its affiliates and was initially successful. However, the Court of Appeal held that it would not be an appropriate exercise of the Court’s discretion to uphold the anti-suit injunction in relation to the affiliate proceedings given that the evidence filed was insufficient to establish that those parties remained affiliated with RS and whether RS was at risk of any liability in those proceedings sufficient to justify the grant of such relief. Although it was not necessary to decide the point, Lord Justice Males suggested that he would have been prepared to grant an anti-suit injunction in-principle to restrain “artificial” claims in the Russian courts whose true purpose was to circumvent the obligation to arbitrate in London.
3.
The English courts have historically been and remain a key forum for the determination of significant international insurance coverage disputes, including where such disputes arise from the imposition of sanctions, due to the prominence of the London-based insurance and reinsurance industry.
Judgment of the High Court is currently awaited in the AerCap v AIG group of claims,[8] in which the key issue is, essentially, whether contingent liability insurance policies respond to cover billions of pounds in losses suffered by aircraft leasing companies in respect of aircraft and engines stranded in Russia following Russia’s invasion of Ukraine and the concurrent imposition of significant Western sanctions. The claims were tried before Mr Justice Butcher over approximately 10 weeks between October 2024 and February 2025 and judgment is reserved. At the same time, the so-called operator policy group of over 70 claims (Zephyrus v Fidelis) continues to work its way through the High Court in respect of aircraft and engines stranded in Russia, following March and June 2024 judgments of Mr Justice Henshaw declining to enforce exclusive jurisdiction clauses in favour of the Russian courts but upholding the equivalent clauses in favour of the Ukrainian courts.[9] In addition to the flurry of aviation insurance claims filed in 2023, new claims continue to be filed against insurers by entities affected by sanctions in other sectors. For example, in March 2025 the administrators of VTB Capital bank filed a claim against Zurich Insurance and other insurers in respect of an estimated £20m worth of debts related to winding down agreements concerning credit default insurance, in circumstances where the bank was unable to continue operating in 2022 due to the impact of sanctions.[10]
Looking ahead
Despite the overall drop in the number of sanctions-related claims since 2023, there are various reasons to expect that the English commercial courts will continue to see a steady pipeline of sanctions-related litigation in 2025 and beyond.
Broadening of sanctions regimes and anti-circumvention
As Western sanctions against Russia and its allies have taken effect over the past 3 years, Russia has gone to great lengths to counter the impact of sanctions regimes, including by seeking alternative markets and establishing alternative trade routes and, according to the UK Government, also through use of “deceptive tactics“.[11] In response, the UK and its allies have increasingly focused on anti-circumvention measures,[12] with the UK Government reporting it is “cracking down” on sanctions evasion by Russia and its third-country trading partners.[13] As with the prior sanctions packages, there is the potential for these new and expanded sanctions measures to affect commercial counterparties in the UK and lead to litigation in the English courts.
Recent regulatory developments – UK
The UK Office of Trade Sanctions Implementation (OTSI) was launched in October 2024 and released (i) new guidance in January 2025 regarding best practice for including “no re-export to Russia” clauses in export contracts to mitigate the risk of Russia obtaining sanctioned items (which is closely aligned with pre-existing EU rules[14]) and (ii) updated guidance in February 2025 to assist exporters in countering sanctions evasion, including by listing over 50 “red flag” indicators of potential sanctions evasion.
In February 2025, the UK Government released its largest Russia sanctions package since 2022, which included (among various measures) sanctions against (i) producers and suppliers of dual-use and military goods based in third countries including Central Asian states, Turkey, Thailand, India and China and (ii) for the first time, a foreign financial institution, the Kyrgyzstan-based OJSC Keremet Bank, to further disrupt Russia’s use of the international financial system.
The shift toward enforcement
The burden of sanctions compliance on UK businesses, particularly financial institutions, remains very high. At the same time, OFSI has reported that it has increased its enforcement team fourfold and opened a record number of cases in 2023-24. A number of these cases are expected to result in a public outcome during 2025, given the complexity of financial sanctions breaches and need to exhaust internal avenues of review before penalty decisions are published. Although most of the suspected sanctions breaches reported to OFSI are low severity, low value and reported out of caution, it is striking that 60% of the 373 suspected breaches recorded in 2023-24 were reported by the financial services industry, followed by 12% by the legal industry.
It remains to be seen who will be penalised for sanctions breaches in 2025 and beyond and the broader implications of regulatory action taken by OFSI and other regulators. At the time of writing, claims by hundreds of investors worth approximately £1.5bn are progressing through the High Court against Standard Chartered bank pursuant to the Financial Services and Markets Act 2000.[15] The claims stem from the bank’s breaches of US sanctions against Iran between 2001 and 2007, in respect of which the FCA found “serious and sustained” shortcomings in the group’s financial crime controls, customer due diligence and ongoing monitoring.[16] The claims are expected to go to trial in 2026, some 25 years after the original sanctions breaches began. If there is anything to be gleaned from that, it is that now is the time for businesses to prioritise sanctions compliance as there may yet be a long tail to Russia sanctions-related litigation in the English commercial courts.
Footnotes
[1] For further background on the UK, EU and US sanctions regimes against Russia see: UK sanctions relating to Russia – GOV.UK (UK), EU sanctions against Russia – Consilium (EU) and Ukraine-/Russia-related Sanctions | Office of Foreign Assets Control (US).
[2] See further discussion of these cases in the 2024 Yearbook. On 1 November 2024, the UK Supreme Court granted permission to appeal in the linked cases of UniCredit v Celestial Aviation and UniCredit v Constitution Aircraft Leasing.
[3] OFSI Annual Review 2023-24: Engage, Enhance, Enforce – GOV.UK (21 March 2025).
[4] In January 2025 the UK Supreme Court heard a challenge to the decision of the Secretary of State for Transport to detain the £38 million superyacht Phi under the Russia (Sanctions) (UK Exit) Regulations 2019: Dalston Projects Ltd and others (Appellants) v Secretary of State for Transport (Respondent) – UK Supreme Court.
[5] Thomas & Ors v PJSC National Bank Trust [2025] EWHC 75 (Ch) (23 January 2025).
[6] Mints & Ors v PJSC National Bank Trust & Anor [2023] EWCA Civ 1132 (06 October 2023). Although the Mints parties obtained permission to appeal to the UK Supreme Court in January 2024, the case has now settled and the appeal has been withdrawn.
[7] Renaissance Securities (Cyprus) Ltd v ILLC Chlodwig Enterprises & Ors [2025] EWCA Civ 369 (03 April 2025).
[8] AerCap Ireland Ltd. v AIG Europe SA and another, case numbers CL-2022-000294, CL-2022-000557, CL-2022-000662, CL-2022-000697 and CL-2023-000148, in the High Court (Commercial Court).
[9] Zephyrus Capital Aviation Partners 1D Ltd & Ors v Fidelis Underwriting Ltd & Ors (Re Russian Aircraft Operator Policy Claims (Jurisdiction Applications)) [2024] EWHC 734 (Comm) (28 March 2024) and AerCap Ireland Capital Designated Activity Company & Ors v PJSC Insurance Company Universalna & Ors (Re Ukrainian Aircraft Operator Policy Claims (Jurisdiction Applications)) [2024] EWHC 1365 (Comm) (06 June 2024).
[10] As part of VTB Group (Russia’s second largest financial services group), VTB Capital (a UK bank) found itself unable to continue due to the impact of international sanctions regimes on its activities and was placed into administration in March 2022. Case number BL-2025-000355.
[11] Countering Russian sanctions evasion – Guidance for exporters (updated 25 February 2025); House of Commons, Research Briefing: Sanctions against countries supporting Russia’s invasion of Ukraine (17 January 2025).
[12] In September 2024, the G7 group of countries (i.e. Canada, France, Germany, Italy, Japan, the UK, the US and the EU) published joint guidance to prevent Russian export control and sanctions evasion.
[13] UK Office of Trade Sanctions Implementation Blog, (11 October 2024).
[14] For more on the EU measure, see Section 2 of our June 2024 Briefing: Sanctions Update: new US guidance for overseas sanctions enforcement, the impact of the EU’s “no Russia” clause for certain businesses, the EU’s new liability directive and some notable sanctions de-listings and challenges.
[15] Various Claimants v Standard Chartered PLC [2025] EWHC 698 (Ch) (25 March 2025).
[16] Various Claimants v Standard Chartered PLC [2023] EWHC 2756 (Ch) (08 November 2023).
