OWH SE iL v RTI Ltd & Anor

I have before me three applications arising from an order of Robin Knowles J made on 10 July 2025, in which he gave the Claimant (“OWH”) permission pursuant to section 66(1) of the Arbitration Act 1996 (the “1996Act”) to enforce an LCIA arbitration award dated 25 September 2024 (the “Permission Order”). The award ordered the Defendants (to whom I shall refer as “RTI” and “Rusal” respectively) to pay OWH some €214 million, none of which has to date been paid.

On 21 August 2025, Robin Knowles J made a further order authorising OWH to effect service by alternative methods (the “Alternative Service Order”).

In the normal way, both orders were made without notice such that the Defendants were given liberty to apply to set them aside.

On 10 September 2025, Rusal applied to set aside the Permission Order on the grounds that enforcement would be contrary to English public policy. On 17 September 2025, it applied to set aside the Alternative Service Order.

On 13 November 2025, Baker J directed that the present hearing be fixed (i) to determine the application to set aside the Alternative Service Order and (ii) to consider whether the application to set aside the Permission Order should be determined summarily.

On 16 March 2026, Rusal served a witness statement in support of an application to adjourn its application to set aside the Permission Order. On the following day, it notified OWH that it was withdrawing the application to set aside the Alternative Service Order and would not raise any objection to an order for costs in OWH’s favour.

In the event, therefore, the only live applications before me are Rusal’s applications (i) to set aside the Permission Order (the “Set Aside Application”)and (ii) to adjourn that self-same application (the “Adjournment Application”). OWH’s position in a nutshell is that the Adjournment Application should be refused and that the Set Aside Application has no real prospect of success and should be summarily dismissed. As will become apparent, the two applications are inextricably entwined since the reasons for which adjournment is sought necessarily require the court to assess the merits of the underlying application.

OWH is a German credit institution which is regulated by the German Federal Financial Supervisory Authority, Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) and has been in solvent liquidation since 1 April 2023. It is an almost wholly-owned subsidiary (99.39%) of PJSC VTB Bank (“VTB Russia”) and, until 1 January 2024, was known as VTB Bank (Europe) SE. It is not in dispute that VTB Russia is designated as a sanctioned entity in, amongst other countries, the US, the UK, the EU and Jersey. OWH was designated by OFAC but subsequently de-listed in April 2024. It has never been designated by the UK, the EU or Jersey.

Rusal is the parent company of a Russian aluminium group. It was originally incorporated in Jersey but later re-domiciled to Russia. Rusal has never been sanctioned in either the UK or the EU. It was sanctioned in the US in 2018 but was subsequently de-listed in 2019 after its major shareholder, Mr Deripaska, reduced his shareholding to a minority holding and ceased to control the company. RTI is an indirect Jersey subsidiary of Rusal. It has been in provisional liquidation since July 2025 and in liquidation since January 2026. At the material times, the majority of its board of directors was resident in Gibraltar.

In order to make sense of what follows, it is helpful at this stage to set out the relevant provisions of both UK and Jersey sanctions legislation.

The principal UK sanctions relevant to this case are contained in The Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”) made under the auspices of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”) as follows:

It is therefore clear and, indeed, was common ground before me, that in respect of UK nationals or entities, the Russia Regulations regulate conduct anywhere in the world, but in respect of non-UK nationals or entities, they only apply to conduct within the UK.

Some protection against the potentially adverse consequences of compliance with the Russia Regulations on other contractual commitments is provided by section 44 of SAMLA as follows:

Article 11 of the Sanctions and Asset-Freezing (Jersey) Law 2019 (“SAFL”) provides as follows:

Between December 2014 and 11 February 2021, Jersey also implemented the provisions of EU Regulations No.s 208/2014 and 269/2014, both of which contained a protective provision similar to section 44 of SAMLA in the following terms:

As a consequence of Brexit, however, Jersey moved on 12 February 2021 from implementing EU sanctions to implementing UK sanctions which it achieved by means of the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021. Notably, the regulations which were thereby incorporated into Jersey law did not include section 44 of SAMLA or any equivalent provision notwithstanding that Article 10(1) of the EU Regulations ceased to apply in Jersey at the same time. This left a lacuna in Jersey law which was only filled some eighteen months later, following an audit carried out by the intergovernmental Financial Action Task Force which recommended the inclusion of a measure protecting the rights of bona fide third parties acting in good faith in perceived compliance with sanctions regulations.

With effect from 8 June 2022, Article 46A was accordingly inserted into SAFL as follows:

Article 46A thus effectively mirrors section 44 of SAMLA

The underlying dispute between the parties arises out of a series of currency swap transactions entered into between RTI and OWH in order to hedge the Rusal Group’s exposure to movements in the value of the Russian rouble. The transactions were carried out pursuant to the terms of an ISDA Master Agreement made between the parties on 11 September 2019. RTI’s obligations under the agreement were guaranteed by Rusal under a Guarantee and Indemnity of even date. Both the Master Agreement and the Guarantee were governed by English law and subject to LCIA arbitration.

Following the Russian invasion of Ukraine, wide-ranging sanctions were imposed by the international community on Russian banks, companies and individuals. In particular, on 24 February 2022, VTB Russia became a designated person under UK, Jersey and Gibraltar sanctions legislation and the US sanctions authority, (“OFAC”) designated both VTB Russia and OWH.

At around the same time, BaFin took a series of measures (the “BaFin measures”)designed to segregate OWH and its assets from the VTB group. Thus:

(a)

(b)

(c)

(d)

(e)

(f)

The invasion prompted a sharp and dramatic fall in the value of the rouble. This led OWH to issue a margin call to RTI under the Master Agreement on 25 February 2022 requiring payment of US$43.5 million. The Royal Jersey Court concluded in proceedings to enforce the Award in Jersey that RTI did not pay the margin call or, indeed, any subsequent margin calls because to do so might put it in breach of sanctions. While OWH itself was not a designated person under Jersey sanctions legislation, there was a concern that payment to OWH would nonetheless result in funds being made directly or indirectly available to its parent, VTB Russia, which was. Discussions between the parties over the following weeks failed to identify any mutually acceptable mechanism by which the margin calls could be lawfully paid.

Eventually, OWH declared an Event of Default under the Master Agreement and sent Notice of an Early Termination Event (the “Termination Notice”)designating 25 March 2022 as the date for closing out the transactions. The close-out amount payable by RTI to OWH on early termination was calculated as some €214 million. Payment was not made and on 24 June 2022, OWH commenced arbitration proceedings claiming this amount against both RTI as principal debtor and Rusal as guarantor.

In the arbitration RTI/Rusal challenged the Termination Notice on a number of grounds. Of particular relevance for present purposes were its arguments that:

(a)

(b)

(c)

The distinguished tribunal (Jonathan Nash KC, Dame Elizabeth Gloster, DBE, and Andrew Lenon KC) held that RTI was estopped by convention (based on a common assumption) from denying that service of the Termination Notice had been validly effected. Moreover, it could not rely on a Relevant Sanctions Event because the Jersey and Gibraltar sanctions authorities were not within the contractual definition of persons whose measures would qualify as giving rise to such an event.

In relation to Illegality, the Tribunal held as a matter of construction that prompt notice of the illegality conforming to the contractual requirements of the Master Agreement was a condition precedent to reliance on the Illegality provisions. Following RTI/Rusal’s concession in closing submissions that valid notice had not been given promptly, it followed that RTI could not rely on Illegality to excuse non-payment.

The Tribunal expressly declined to rule on whether payment of the margin calls would in fact have breached any relevant sanctions legislation.

Accordingly, on 25 September 2024 the Tribunal issued its award on liability upholding the validity of the Termination Notice and holding the Defendants liable to pay the close-out amount.

It issued a second and final award on 29 August 2025 dealing with interest and ordering the Defendants to pay some £200,000 of arbitration costs and approximately £3.6 million and €2 million of legal costs.

Since the publication of the Tribunal’s award on liability, RTI/Rusal have made a series of applications challenging the decision in one way or another. OWH characterises these as nothing more than cynical attempts to avoid payment, to increase costs and generally to disrupt and delay any enforcement proceedings for as long as possible. Putting forensic hyperbole to one side, it is fair to note that none of these attempts has hitherto met with any conspicuous success. It is unnecessary to go into detail, and the following is but a brief summary.

Time for challenging the first award expired on 1 November 2024. On 5 February 2025, the Tribunal notified the parties that it intended to issue its award on interest and costs on 14 February and invited them to agree a figure for interest. On 13 February 2025, EPAM Law Offices in Dubai sought permission by email to be added as an authorised representative of the Defendant and requested further time to finalise an application regarding the Tribunal’s retained jurisdiction over interest, costs and other matters.

On 19 February 2025, EPAM made an application, although it was rather different in nature from that originally intimated. Instead the Defendants:

(a)

(b)

(c)

A hearing was fixed for 20 March 2025 but, in the event, none of the proposed applications was maintained in the terms set out above. Instead, the Tribunal was invited to admit that the award contained a textual error which was said to undermine a key factual finding as to whether there had in fact been a common assumption for the purposes of an estoppel. It was accepted that application (b) would be difficult to sustain if the Tribunal declined to admit such an error and application (c) was not pursued.

On 1 April 2025, the Tribunal issued a procedural ruling declining to admit any textual error and dismissing the application to stay or suspend the Defendants’ undertakings.

Notwithstanding that time had by then long since expired, the Defendants applied on 11 April 2025 to challenge the award under section 68 of the 1996 Act for serious irregularity and for an extension of time if necessary. The principal irregularity relied upon related to the fraud previously adumbrated in the 19 February application, namely a knowing failure by OWH to disclose documents bearing on the question of whether the Default Notices had been validly and properly served on RTI/Rusal. As regards the extension of time, the Defendants’ primary submission was that no extension was required since the February application amounted to an “arbitral process of appeal or review” such that time did not in fact start to run until the Tribunal’s procedural ruling on 1 April 2025.

At the same time, the Defendants also applied for the Tribunal’s award on interest and costs to be deferred pending determination of the section 68 challenge but this application was dismissed by the Tribunal in a further procedural ruling on 2 May 2025.

On 11 July 2025, the section 68 applications came before Butcher J, who dismissed them both. He held that an application to a tribunal to admit an error was not an “arbitral process of appeal or review” and did not therefore postpone the running of time to challenge the award. On the facts, there was no basis to grant an extension but he would in any event have dismissed the section 68 challenge on the merits as the Defendants had not shown that they had any real prospect of successfully showing that the award had been obtained by fraud or procured in a way which was contrary to public policy.

The Defendants were ordered to pay costs on an indemnity basis but have not to date done so.

On 15 May 2025, the Defendants applied under Article 10.1 of the LCIA Rules to revoke the appointment of all three members of the Tribunal on grounds of bias arising from their refusal to admit any error or irregularity in the award or to delay their award on interest and costs.

This application was dismissed by Professor Jan Paulsson (the Honorary Vice-President of the LCIA) on 24 July 2025. He characterised the application as “unserious” and “unmeritorious” and took the view that the Defendants’ purpose in making it had been “temporary avoidance of an inevitable conclusion.”

On 18 November 2024, OWH obtained permission from the Jersey Bailiff to enforce the award in Jersey against the Defendants. RTI applied to set aside the order on the grounds that enforcement would be contrary to Jersey public policy because Article 46A of SAFL either provided it with a retrospective defence to the claim, or because it was reflective of public policy in Jersey and should therefore be given effect in substance if not in terms.

These arguments were rejected by the Jersey Royal Court in a judgment handed down on 22 May 2025

. The Royal Court held that Article 46A was not retrospective and did not apply to acts or omissions occurring before it came into force on 8 June 2022. It further held that there was no equivalent public policy prior to 8 June 2022; a defendant either had the defence or it did not. The Defendants could not therefore avail themselves of Article 46A and enforcement of the award would not be contrary to public policy.

While not strictly necessary to decide the point, the Royal Court went on to find that RTI had held a genuine subjective belief that payment of the margin call would breach Jersey sanctions by making funds indirectly available to VTB Russia as a designated person, but that this belief was not objectively reasonable as required under Article 46A because:

(a)

(b)

RTI’s further appeal to the Jersey Court of Appeal was also dismissed on 27 November 2025. In relation to retrospectivity, the Court of Appeal agreed with the Royal Court that Article 46A was not retrospective and that there was no pre-existing Jersey public policy prior to 8 June 2022 in favour of immunity. As to reasonableness, it did not dissent from the Royal Court’s findings as to RTI’s subjective belief and two of the judges would also have upheld the judgment, if necessary, on the grounds that the belief was not objectively reasonable for the reasons given at first instance. In a separate addendum to the judgment, however, McCullough JA stated that he saw force in RTI’s submissions that its belief was reasonably held in the circumstances pertaining in March 2022, given that it had relied on external legal advice, although he declined to express any concluded view on the point as the Court’s decision on retrospectivity made it unnecessary to do so.

As is apparently customary, the Jersey Court of Appeal refused permission to appeal to the Judicial Committee of the Privy Council. I was informed by Mr Fergus Randolph KC, who appeared with Mr Tim Taylor KC, Mr Paul Wright and Mr Kartik Sharma on behalf of Rusal, that RTI was nonetheless preparing an application for permission to the Privy Council and would do so before expiry of the deadline on 7 April 2026. Since preparing this draft, I have been notified that the application was indeed lodged on 2 April 2026 and has been accepted by the Privy Council for consideration. Mr Randolph submits that the proposed appeal has a real prospect of success.

On 30 January 2026, OWH applied to enforce the award in Hong Kong and issued a statutory demand against Rusal which opened up the possibility of a winding up petition being brought at any time after 20 February 2026. This was on the basis that Rusal is listed on the Hong Kong stock exchange.

On 16 March 2026, Rusal served on OWH a Request for Arbitration which it had lodged with the LCIA seeking resolution of a dispute between Rusal on the one hand, and OWH and the FRG on the other. The claim against the FRG is asserted pursuant to the BIT referred to in paragraph 31(c) above. No prior warning had been given in correspondence of this claim, although a claim under the BIT had previously been adumbrated in the February 2025 application made to the Tribunal. Mr Taylor KC (who argued this part of the case on behalf of the Defendants) explained that it had been triggered by the very real possibility that Rusal could face a winding-up petition at any moment as a result of the Hong Kong enforcement proceedings. However, it would have a defence to any such petition if it could demonstrate a pending arguable cross-claim against the petitioner as a result of which it would be a net creditor. A reverse umbrella clause in the BIT enables claims against both OWH and the FRG to be brought in LCIA arbitration. The LCIA had accepted the Request for Arbitration and a tribunal will therefore be constituted in due course.

OWH reserved all its rights in relation to the proposed claim, which it has not yet had a proper opportunity to consider. I return to the BIT arbitration in paragraphs 95ff. below.

Logically, the Adjournment Application should fall for consideration before the substantive question of the whether the Set Aside Application can be determined summarily. In the circumstances of this case, however, it is impossible to adjudicate on the one without also addressing the other. Accordingly, I heard argument on both matters together.

There was some debate before me as to whether the purpose of this hearing was simply to determine whether the set aside application should be summarily dismissed. If so, the parties agreed that the appropriate test was the usual test for summary judgment. However, Mr Richard Handyside KC, who appeared with Mr Paul Casey for OWH, suggested that the question of summary dismissal was in fact a red herring. He submitted that there was no need for disclosure or witness evidence in this case and that the court could and should determine the application once and for all on the basis of the available material. I am inclined to agree and subject only to the question of adjournment, I propose to take that course.

As to the Set Aside Application, I start by clarifying what is and, more pertinently, what is not in issue before me. Thus:

(a)

(b)

(c)

(d)

The central plank of Rusal’s argument is that RTI has at least a good arguable case that the decision of the Jersey courts was wrong and that:

(a)

(b)

(c)

(i)

(ii)

(iii)

(iv)

Mr Randolph submitted that the Defendants have every hope and expectation of vindicating this position before the Privy Council. If so, then he argues that RTI was in fact entitled to rely on Article 46A directly, alternatively that there was at all times a public policy in favour of immunity identical to that reflected in section 44 of SAMLA such that enforcement in Jersey should be set aside. In those circumstances, and irrespective of the fact that section 44 does not itself apply, he submits that it would be contrary to English public policy to enforce the award in England when, as a matter of an identical Jersey statutory provision and/or public policy it could not be enforced in Jersey.

I am prepared to accept that there is at least a good arguable case that the decision of the Jersey courts is open to doubt on the issue of retrospectivity. The wording of Article 46A is materially the same as that of section 44 and the very recent judgment of the Supreme Court in Celestial Aviation Services Ltd v UniCredit Bank GmbH, London Branch, [2026] UKSC 10 lends some support for the argument that it is to be interpreted as applying to all civil proceedings commenced after its entry into force, without any temporal limitation on the acts in respect of which protection is provided:

Admittedly, there is no indication that their Lordships had in mind the particular situation that arises here, but there is equally nothing in the passage quoted to suggest that it is relevant to enquire when the relevant non-payment occurred. If that is right, then RTI would have been able in principle to claim the protection of Article 46A in civil proceedings commenced after it came into force (i.e., the arbitration), notwithstanding that the margin call had fallen due for payment before that date.

It is undoubtedly true that the Jersey legislature could have provided expressly that Article 46A applied retrospectively to conduct pre-dating its enactment. Alternatively, it could have implemented section 44 of SAMLA directly. It might therefore be said (as the Jersey courts posited) that its failure to do so represented a conscious choice on the basis that the purpose of the provision was to encourage sanctions compliance and that, by definition, it would be too late to achieve that objective in relation to acts which had already occurred. However, there is an equally strong argument that the lacuna in Jersey law arose by oversight rather than deliberate choice in circumstances where an equivalent immunity had existed under the EU regulations and there was no obvious reason why it should have been abandoned, given the obvious imperative to achieve a unified and seamless sanctions regime across the international community despite Brexit.

I also consider that there is a plausible argument that RTI’s subjective belief that payment would contravene Jersey sanctions law was objectively reasonable, essentially for the reasons given by McCullough JA. Nor would service of a formal Notice of Illegality have achieved much, if anything, in practical terms.

Mr Handyside did not necessarily accept any of this, but he was nonetheless content not to dispute it, and to proceed on the basis that RTI had a reasonable prospect of succeeding before the Privy Council. However, he submitted that even if the appeal succeeded, Mr Randolph’s fundamental argument was still flawed and that there was no reason to adjourn the Set Aside Application which should be dismissed. This, then, is the critical issue for determination since if Mr Handyside is right, Mr Randolph accepts that his case on both applications rests solely – and rather less comfortably – on the proposed BIT arbitration.

It was common ground between the parties that the court has a discretion to refuse enforcement of a domestic arbitration award under section 66 of the 1996 Act and that public policy is a legitimate reason at common law for doing so. It was also not in dispute that there is a strong public interest in upholding the finality of arbitration awards and in enforcing them.

I was referred to a number of authorities which articulated the need for a court to exercise extreme caution before refusing enforcement of an arbitration award on grounds of public policy. These include the following passage from the judgment of Sir John Donaldson MR in Deutsche Schachtbau-und Tiefbohr GmbH v R’As al Khaimah National Oil Co., [1987] 3 WLR 1023 at 1035D-E:

In the event, I derived limited assistance from previous authorities. Many concerned either foreign awards or situations where English public policy differed from public policy under the law of the seat or the governing law. By contrast, this is a case concerning a domestic English award with an all-English tribunal adjudicating on a contract governed by English law and where (on this hypothesis) English public policy is identical to Jersey public policy.

Ultimately, it seemed to me that the question is simply one of deciding how the balance between competing public interests should be struck after taking into account all relevant factors and circumstances, both for and against the relief sought. Decided cases are undoubtedly helpful in assessing the importance to be ascribed to certain public policy considerations. For example, as the Eternity case (supra) demonstrates at [141], the public interest in upholding the principles of consumer legislation is so strong that it is unnecessary to differentiate between different categories of consumer protection. However, a different combination of interests may lead to a different balance and it is not necessarily possible to transpose previously decisions directly. Ultimately, I did not understand either party to dissent from this approach.

Mr Handyside’s first, threshold, point was that it was not open to Rusal now to raise any argument based on English public policy because public policy is a point which could and should have been taken, if at all, in the arbitration.

The relevant test in this regard was accepted by both parties as that set out by Lord Bingham in Johnson v Gore Wood, [2002] 2 AC 1 at 30-31 in the following terms:

Mr Randolph accepted that the question of English public policy was not raised in the arbitration but submitted that it could not have been because English public policy as such was irrelevant. Section 44 and the Russia Regulations did not apply directly and the only point open to RTI in the arbitration was public policy or illegality under Jersey Law. He accordingly argued that RTI and Rusal were not precluded by the doctrine in Henderson from relying on English public policy when it came to enforcement in England.

He also accepted that no defence was raised in the arbitration under Article 46A and that there was no evidence before the Tribunal relating directly to the factual elements necessary to establish the defence. The finding of the Royal Court as to RTI’s subjective belief was based on witness evidence and documentary disclosure (including communications with RTI’s legal representatives over which privilege had been waived) which had not been placed before the Tribunal.

Nonetheless, it was common ground that RTI/Rusal’s skeleton argument and closing submissions in the arbitration did argue that payment would be illegal under Article 11 of SAFL. Witness evidence was also adduced that referred to concerns about a breach of Jersey sanctions law (albeit not a belief that payment would breach sanctions) and to RTI’s unsuccessful attempts to obtain advice on Jersey law in circumstances where its long-standing legal advisers had refused to act for it further following the invasion. It might, therefore, be said that there was material before the Tribunal on the basis of which a submission could have been made that RTI reasonably believed that payment of the margin call would be caught by the sanctions regime. But it is not disputed that there was no mention of Article 46A in terms, even as an alternative to Illegality.

In the event, the Tribunal did not consider the sanctions position under either Jersey or English law at all because it held that (i) the only relevant sanctions regime for establishing whether there was a Relevant Sanctions Event was the US regime; and (ii) the Defendants were prevented from relying on Illegality because the mandatory notice provision had not been complied with. In other words, the Defendants lost on a procedural rather than a substantive point.

Mr Randolph also pointed out that when RTI raised the question of Article 46A in the Jersey enforcement proceedings, it was never suggested by OWH that it was barred by the rule in Henderson v Henderson from doing so. In point of fact, this is not entirely accurate: Henderson v Henderson was raised by OWH but only in relation to Article 11. Its argument in that context was that Article 11 required “reasonable cause to suspect” and that since there was no evidence on this point in the arbitration, RTI was barred from relying on Article 11 at the enforcement stage. Article 11 differs in this regard from Article 46A which refers to reasonable belief. I accept, therefore, that the rule in Henderson was not raised by OWH as an objection to reliance by RTI on Article 46A in the Jersey enforcement proceedings.

Mr Randolph further argued that, even if Article 46A had not been explicitly raised in the arbitration, nonetheless the court was obliged to determine of its own motion whether the Tribunal’s application of the sanctions regime was consistent with the statutory provision or not. He relied in support of this proposition on a passage in the Opinion of Advocate General Biondi delivered on 26 February 2026 in the European case of Reibel v JSC VO Stankoimport, Case C-802/24, although he accepts that this is as yet only an opinion which may not ultimately be adopted by the European Court.

This case arises from a reference by the Swedish court relating to a seller’s failure to supply goods under a sale contract on grounds that export was prohibited by Article 11 of Regulation 833/2014. The buyer sued for compensation for non-delivery and also to recover certain advance payments it had made. The Swedish arbitration tribunal disallowed the claims for compensation on the basis that they fell within Article 11 but held the repayment claim did not and therefore succeeded. The seller applied to the Swedish court to set aside the award. Swedish law permits an award to be declared null and void where it is manifestly incompatible with Swedish/EU public policy and the court referred to the European Court the question of whether Regulation 833/2014 is part of EU public policy.

Advocate General Biondi’s Opinion recognises that the questions raised are:

Mr Randolph also drew attention to the following passage in Mr Justice Bright’s judgment in Eurochem (supra):

In response, Mr Handyside relied on the decision of Cockerill J in Alexander Brothers Limited (Hong Kong S.A.R.) v Alstom Transport SA, [2020] EWHC 1584 (Comm) where she said this in reaching her conclusion that a point which had not been raised in the arbitration could not, on the evidence before her, be raised on enforcement:

In relation to Reibel, Mr Handyside submitted that even if the Advocate General’s Opinion, were to be accepted by the European Court, it does not assist Rusal. Reibel raises a straightforward question of actual illegality: was the sale prohibited or not? In that context, it is easy to see why the court is bound to consider the matter independently, and references to it doing so “of its own motion” have to be read in that context. In any event, the defence of illegality had been taken in the arbitration in that case and was not being raised for the first time only at the enforcement stage. By contrast, the situation here is completely different. Article 46A and section 44 do not depend on actual illegality but on reasonable belief and Advocate General Biondi’s Opinion cannot be taken as expressing any view on provisions of that nature. Accordingly, there was no reason why the Tribunal should have taken any point on public policy of its own motion, let alone English public policy, in the absence of being alerted to it or being presented with evidence to support it.

OWH also relied on Mr Justice Bright’s comments in Eurochem (supra) at [469] set out above to argue that where a breach of foreign law is involved which is sufficiently serious to engage English public policy, it can operate as a defence to a claim. Accordingly, Mr Handyside submitted, if there really was an available defence based on English public policy, it both could and should have been taken in the arbitration.

Persuasively as these arguments were put, however, I do not consider that Rusal is barred by the rule in Henderson from taking a point on English public policy in these English enforcement proceedings. Despite Mr Handyside’s submissions to the contrary, I do not accept that the Defendants could and should have argued in the arbitration that because Article 46A applied to RTI as a Jersey company, the Tribunal should have given effect to that defence as a matter of English public policy simply because the regimes were aligned. The judgment in Eurochem was only delivered on 31 July 2025 and so was not available at the date of the arbitration hearing. Furthermore, there is nothing in the material before me to indicate that the Defendants made a deliberate decision not to run the point, or to defer it to enforcement for tactical reasons. On the contrary, the fact that Article 11 was explicitly relied upon suggests the opposite, if anything, and there was evidencebefore the Tribunal explicitly addressing RTI’s concerns about breach of Jersey sanctions. Accordingly, while Article 46A could and possibly should have been raised, it is less easy to say that the Defendants should have raised English public policy as a defence when it was not a point which had apparently occurred to any of their lawyers.

I therefore reject Mr Handyside’s threshold objection to Rusal’s argument, although I accept his submission that Reibel is not directed at the circumstances in issue here and provides no support for Rusal’s argument.

Mr Randolph relied on Celestial (supra), the comments of Mr Justice Bright at [469] in Eurochem(supra) and the Opinion of Advocate General Biondi in Reibel (supra) in support of the proposition that the sanctions regulations engaged vital public interests.

He also laid great stress on the statement of Jersey public policy articulated in paragraph 46 of the judgment of the Royal Court as follows:

Mr Randolph submitted that this was an accurate reflection, mutatis mutandis, of English public policy with regard to section 44 of SAMLA, and that it should make no difference that the relevant statutory provision was one of Jersey law since the two systems were completely aligned. I have two immediate concerns with this proposition. First, I note that the paraphrase of this passage in his skeleton argument had been somewhat massaged to refer to a defence under section 44 that the English court found was “or was arguably applicable”. I am not persuaded that this is a legitimate refinement, since it seems to me that the English court would at the very least need to be satisfied that the defence was available before concluding that English public policy was engaged.

Secondly and in any event, I harbour some doubts about paragraph 46 of the Royal Court’s judgment as a statement of Jersey public policy. I would have thought that much might depend on why the award gave no consideration to a possible immunity defence. After all, there is a wide difference between a point being raised which the tribunal simply overlooks or ignores, and a point which the tribunal declines to address because the party in question is contractually precluded from relying on it. A case where the point was raised but not supported by sufficient evidence might fall somewhere in between. Be that as it may, it is not for me to set myself up as the arbiter of public policy in Jersey. I merely note that I am far from persuaded at present that there is any English public policy of quite this width.

I nonetheless accept without question that, as has been reiterated time and again in the case law, there is a vital public interest attaching to the sanctions regime, the purpose of which is to bring pressure to bear on Russia to cease its operations in Ukraine. I also recognise the importance of the immunity provisions in section 44 of SAMLA and Article 46A of SAFL as a critical part of that sanctions regime. By mitigating the otherwise potentially harsh consequences of sanctions on persons who are caught between complying with their contractual obligations on the one hand and the sanctions legislation on the other, they allow the sanctions net to be cast more widely: see, by analogy, Celestial (supra) at [76]-[79].

Mr Handyside nonetheless suggested that there was an element of the pot calling the kettle black in Rusal’s submissions. He argued that refusal of enforcement would not further the purpose of the sanctions regime in any way because OWH was in any event banned from making payments to its parent company by the BaFin measures. If anything, the boot was on the other foot since Rusal is a Russian company and (presumably) a Russian taxpayer and so permitting enforcement would actually do more to further that purpose and incidentally deprive the Russian state of tax revenues.

Mr Randolph’s riposte to this was that while OWH is a regulated entity in Germany, it is not regulated in the UK and payments to it would fall foul of UK sanctions because its parent, VTB Russia, is a designated person. By contrast, Rusal is not sanctioned in either the UK or the EU and, following its de-sanctioning by the US, it has undertaken strict monitoring and reporting obligations to OFAC.

Ultimately, it did not seem to me that a consideration of which side’s case was more or less likely to further the purpose of the sanctions regime tilted the balance appreciably one way or the other.

On the other hand, it is acknowledged that there is a well-established and strong public interest in the finality and enforcement of arbitration awards. Clear reason is required before enforcement will be refused.

I recognise that this is perhaps not a case where the highest degree of caution is required before invoking public policy. There is no question here of imposing English public policy on a foreign award which is perfectly lawful under its foreign law. On the contrary, it is a domestic English award and the premise of the argument is that English and Jersey public policy are completely aligned and, moreover, part of a vital international consensus. As such, it could be said that section 44 and Article 46A both reflect international public policy.

However, Article 46A is not itself a primary sanctioning provision, such as was before Mr Justice Bright in Eurochem. If payment would actually put one or other of the Defendants in breach of sanctions law in the country of its incorporation that is one thing. But that is not alleged here. Article 46A/section 44 are rather ancillary provisions designed to support the primary sanctions by providing immunity in certain circumstances. As Mrs Justice Cockerill pointed out in Alexander (supra), corruption is not a “one size fits all” category and the court must therefore assess whether the nature and degree of corruption involved in the particular case engages public policy. Some may; some may not. Similarly, in my judgment, with the sanctions regime. Different components of that regime may carry different weight from a public policy perspective and just because the Article 46A/section 44 immunity is part of the sanctions regime does not mean that it necessarily attracts the same public policy interest as the primary sanctioning provisions.

In this context, Mr Handyside made the powerful point that there is no obligation on a party to avail itself of a defence under Article 46A/section 44. It can always take the risk of a breach and pay. If, in fact, it turns out that there is no illegality then no harm will have been done. He submits that in this case there is no allegation of actual illegality and the fact that RTI could have relied on a defence which it was not obliged to take and which it did not take is no reason, per se, to refuse enforcement.

I agree. While the public policy underlying the immunity is important, I do not regard it as sufficiently important to require enforcement here to be refused. This is for the following reasons in particular:

(a)

(b)

(c)

In this regard, I do not consider that there is any inconsistency between (c) and my conclusion on the Henderson point. Although I have held in the latter context that a failure to take the point before the arbitrators is not a bar to raising it now, that does not mean that it cannot and should not go into the balance to be weighed along with all other relevant factors.

Mr Handyside made the further point that even if the award was ultimately held not to be enforceable in Jersey, it could still be enforced elsewhere. Accordingly, there could be no public policy against enforcing it against Rusal as guarantor which, not being a Jersey or an English company, could not itself rely on Article 46A/section 44. Mr Randolph’s riposte was to submit that if this were a good argument, a court could never refuse enforcement on grounds of public policy unless there was complete uniformity across the world – or at least in all jurisdictions where the defendant was likely to have assets.

So far as RTI is concerned, that is a powerful point well made. I am here concerned with English public policy and only with English public policy and had I concluded that it was appropriate to refuse enforcement in England against RTI on grounds of English public policy, I would not have been deterred simply because another court elsewhere might take a different view. Even so, the argument does not to my mind assist Rusal. The award still stands and can be enforced against RTI wherever it has assets. Rusal is not a Jersey company and is not entitled to take advantage of Jersey public policy. I can therefore discern no public policy interest in refusing enforcement – even in England – against Rusal as guarantor.

Accordingly, I conclude that even if RTI were to succeed before the Privy Council, that would not justify the English court in refusing to enforce the award here. It necessarily follows that no useful purpose would be served by adjourning the Set Aside Application pending the outcome of the proposed appeal to the Privy Council.

Rusal nonetheless argued that I should still adjourn the Set Aside Application pending disposal of the BIT arbitration rather than deciding it here and now. Mr Randolph accepted that if I was against Rusal on the public policy argument (as I am), then this was the only basis on which an adjournment could be sought.

As already noted in paragraph 31(c), a claim under the BIT was first mooted in February 2025 in the context of the Defendants’ application to the Tribunal for, inter alia, permission to apply to the LCIA court under section 32(2)(b) of the 1996 Act to determine the Tribunal’s jurisdiction over proposed claims under Article 10 of the BIT.

Although the claim was not pursued at that time, Mr Taylor explained that it had received fresh impetus following the threat of a winding-up petition against Rusal in Hong Kong. He submitted that in any event the claim could not have been brought before 25 September 2025 because of a requirement in the BIT to undertake six months of amicable negotiation. However, Rusal was now on the horns of a dilemma. On the one hand, it could be penalised in Russia if it paid OWH. In this connection, he referred me without objection to a letter from the Russian Central Bank making clear that, as a matter of Russian law, Rusal could only pay the money into a blocked account in Russia. On the other hand, it if it paid into a blocked account in Russia, it could be in trouble with OFAC to whom it is required to report.

The claim outlined in the Request for Arbitration asserts that the measures taken in Germany against OWH had the effect of disrupting the carefully constructed hedging arrangements that had been put in place between the Defendants, OWH and VTB Russia. This is said to have amounted to dispossession and/or unlawful and discriminatory measures which caused damage to Rusal’s economic activity by forcibly separating OWH from its parent. Causes of action arising therefrom are asserted against OWH and the FRG in unjust enrichment, unlawful means conspiracy, causing loss by unlawful means and intentionally inducing a breach of contract. The damages sought include the amount of the arbitration award.

I confess that I had some difficulty in following this claim. At times, it appeared to assert that OWH was vicariously liable for the actions of the FRG. At others, it appeared to assert the opposite. On any view, I agree with Mr Handyside that it is difficult to see how measures taken against OWH by BaFin in pursuance of an international sanctions regime can give rise to any of the causes of action alleged, or how OWH can have incurred any liability for what BaFin did. Even if I were to accept, making due allowance for the difficulty and complexity of framing essentially public law arguments in the context of municipal law, that there are valid arguments here, they seem to me to be ambitious and by no means obvious or straightforward. In particular, the suggestion that there was an unlawful conspiracy between OWH and the FRG is bordering on the surreal.

With all due respect to Mr Taylor, who argued this part of the case valiantly, I cannot regard the BIT arbitration as a valid reason for exercising my discretion to adjourn the Set Aside Application. The delay involved is likely to be at least a year and very probably much more than that, and I do not consider the merits of the claims to be so strong as to delay an enforcement that I have held should otherwise proceed. In any event, if the BIT claims ultimately succeed it cannot seriously be said that the FRG would not be good for the money.

There was a faint suggestion in Rusal’s skeleton argument that section 9 of the 1996 Act might apply on the basis that legal proceedings (i.e., the application to enforce) had been commenced against Rusal in respect of a matter which had been agreed to be referred to arbitration, namely the BIT claims. The answer to this, however, was given by Mr Handyside, namely that the relevant “matter” for these purposes is the enforcement of the award which is not a matter itself capable of being referred to arbitration.

For all these reasons, I refuse the application to adjourn the Set Aside Application. I further find that Rusal has no real prospect of successfully raising any objection on grounds of English public policy to enforcement of the award against it and the Set Aside Application itself is accordingly dismissed.

This having been withdrawn, it was common ground that OWH was entitled to recover its costs. Given the Commercial Court’s wish to give junior advocates as many opportunities for oral advocacy as possible, it was unfortunate that time did not allow for argument on costs which would otherwise have been presented by Mr Casey on behalf of OWH. I therefore invited written submissions on paper, which I have now received.

However, since there may yet need to be an oral consequentials hearing in the light of my decision, I propose to defer the determination of costs so that it can be dealt with at the same time. If that gives the junior advocates a chance to address the court, so much the better. If not, I will determine the costs on the papers, together with all other consequential matters.