Written By: Apoorv Agarwal, Bandita
The last decade has seen a massive global disruption impacting all functions of life. The global disturbance has also impacted the way legal proceeding has been functioning including the function of the arbitral hearings. The COVID‑19 pandemic prompted a massive shift to remote hearings and digital procedures to mitigate lockdowns, while the Russia–Ukraine war and renewed Iran–US tensions have injected complex sanctions and jurisdictional issues into arbitral practice. Tribunals and institutions have adopted guidance encouraging virtual hearings, e‑signatures and other remote tools to maintain efficiency. Enforcement and recognition of awards faced delays as courts closed or slowed. Sanctions regimes, by contrast, have upended choice of seat and remedies: Russian Lugovoy laws and EU/US measures can compel disputes into courts or void awards, while U.S. sanctions on Iran hinder payments and access to arbitral forums.
Impact of COVID‑19 on Arbitration
Procedural delays and virtualisation: As COVID‑19 spread in early 2020, courts and tribunals rapidly shifted to teleconferencing. Major institutions updated rules or issued guidance: e.g. ICC’s April 2020 Guidance Note urged parties to use virtual hearings, electronic communication and e‑signatures to avoid delays. Internation Centre for Settlement of Investment Dispute in its Caseload Statistics reported even pre‑pandemic that 60% of its hearings were already by videoconference. Many institutions published protocols addressing scheduling, technical security, witness conferencing and cybersecurity for remote hearing. As a result, international arbitration continued largely uninterrupted, albeit in new formats. However, some jurisdictions with closed courts saw delays: enforcement actions under the New York Convention were postponed when courts reduced operations. Shipping original awards by mail became slow, prompting even ICC to suggest electronic notification of awards.
Emergency measures and evidence: Travel restrictions and lockdowns increased demand for interim relief. Parties frequently invoked emergency arbitrator provisions in ICC, LCIA and ICSID rules to freeze assets or preserve evidence. National courts in some countries also relaxed rules to allow online emergency orders. Likewise, taking evidence shifted online: tribunals admitted remote witness testimony via videoconference, while some witness statements were treated as the new normal in lieu of live hearsay. Notably, recent guides like the Seoul Protocol, highlight data security and confidentiality as key concerns in virtual settings. Overall, the quick procedural adaptations – wide use of emergency arbitration and virtual evidence – helped maintain case momentum during lockdowns.
Enforcement of awards: The pandemic’s greatest arbitration impact was on enforcement speed. With courts closed or functioning at reduced capacity in 2020–21, many arbitration awards could not be filed promptly for recognition. Postal delays and travel bans also hindered delivery of award originals, often needed by domestic court for execution of the award. Some courts insisted on hard-copy submissions, adding weeks to proceedings. Although the New York Convention remained in force, parties risked missing enforcement deadlines as jurisdictions counted down, and sought to rely on COVID‑related hardship like citing Article V(1)(b) NY Convention to resist enforcement on fairness ground. To counter this, tribunals encouraged e‑notification of awards and institutions offered digital platforms for filing enforcement requests. The Supreme Court of India waived the limitation period for filing all judicial and quasi-judicial proceedings nationwide from March 15, 2020, to October 2, 2021, due to the COVID-19 pandemic and further granted buffer of 90 days from October 3, 2021, to resume their filings.
Impact of the Russia–Ukraine Conflict
Sanctions and seat selection: The 2022 Russia – Ukraine conflict triggered sweeping sanctions affecting arbitrations with Russian or Ukrainian parties. Sanctions have fractured the traditional appeal to neutrality, parties now consider whether a seat’s laws might bar awards or expose arbitrators to sanctions. For instance, many tribunals now avoid seats in jurisdictions that impose blanket enforcement bans on awards involving sanctioned parties like the EU/Swiss no-claims clauses. Conversely, Russia’s Lugovoy Law grants Russian courts exclusive jurisdiction over disputes involving sanctioned parties. In practice, Russian courts have aggressively applied this law to seize arbitrations away from foreign seats, claiming sanctions make arbitral clauses unenforceable. The EU and U.S. have countered by banning enforcement of any judgments arising under the Lugovoy Law.
Emergency measures and asset freezes: The war has seen heightened use of provisional remedies and conservatory measures. Claimants often seek early injunctions to attach assets before sanctions regimes lock them down. Arbitral rules like ICC providing for emergency arbitrators have been vital to secure evidence and assets at risk of international freezing. Courts in some states have also issued similar freeze orders. However, enforcing such interim relief has been complicated by sanctions on banks and payment systems.
Enforcement of awards: Post‑award enforcement in this context is thorny. Several states like the EU, Switzerland, UK enacted rules that preclude enforcement of arbitration awards against them where the claim arises from contracts tainted by sanctions. Notably, EU law in 2025 for Russia and Belarus adopted a public policy bar for awards that would violate sanctions. Conversely, Russia itself refuses to enforce any award that requires payment in hard currency, or that conflicts with its Lugovoy-exclusive-jurisdiction stance. Ukrainian courts have their own measures to protect domestic companies and enforce USD contracts amidst war. In short, enforcement of award requires careful navigation of overlapping sanction regimes and public-policy exceptions in multiple jurisdictions post the Russia – Ukraine conflict.
Force majeure/hardship and public policy: The conflict has prompted fresh force majeure claims. Russian clients have invoked war or sanctions to excuse non-performance, while Western contractors claim breach by Russian counterparts working under pressure. International tribunals have yet to award on these specifically, but investment treaty claims by expropriation or security have multiplied. Public policy now includes war‑related norms: for instance, certain military or dual-use contracts may now be void for violating sanctions laws. Arbitrators must scrutinize parties’ compliance with international obligations at the award stage, lest an award be annulled as contrary to public policy in Europe or the U.S. In sum, the war has imported a new layer of geopolitical public policy considerations into arbitration.
Impact of Iran–US Tensions
Jurisdiction and forum: Iran is not a party to the ICSID Convention; most Iran‑related investment disputes proceed under UNCITRAL rules or under the Washington Convention via bilateral investment treaties. The post‑2018 reinstatement of U.S. sanctions after the JCPOA collapse has curtailed Iran’s access to international forums. Iranian entities have long clauses invoking international arbitration, but the threat of U.S. secondary sanctions against any entity or individual supporting Iran has chilled tribunals. Arbitrators from or dealing with U.S. institutions risk being targeted.
Procedural issues: Travel to or from Iran is limited, but less so than Russia/Ukraine (pre-conflict). Virtual hearings have been used in Iran-related cases similarly to the COVID period. Confidentiality is a special concern in Iran disputes, given extensive U.S. surveillance of financial transactions. Parties often insist on extreme digital-security measures. Arbitrator availability is also impacted: few Western arbitrators are keen to take Iran cases; many arbitrations are served by arbitrators from India or Middle Eastern jurisdictions.
Enforcement: This is the crux of the problem. U.S. Treasury regulations essentially forbid U.S. banks or companies from performing transactions that benefit Iranian SDNs without special OFAC licenses. Before 2026, some sanctions regimes allowed legal fees, but these safe harbours are narrow. In effect, many foreign awards for Iranian parties have become pyrrhic victories: even when a tribunal finds for Iran, collecting is near-impossible if assets in Western jurisdictions are frozen. Moreover, the U.S. courts have signaled they will enforce the 1955 Treaty of Amity, allowing Iran to sue the U.S. at the ICJ but may be hostile to contract awards. Enforcement of any award against a U.S. party is risky; against non‑U.S. parties, it depends on local sanctions compliance.
Public policy: Perhaps more than any other crisis, the Iran‑US standoff makes public policy enforcement a real barrier. U.S. courts and regulators explicitly view judgments favoring Iranian SDNs as contrary to U.S. national interest. Notably, Iran invoked public policy defense at the ICJ, arguing U.S. sanctions violate the Treaty of Amity’s commercial protections. While Iran has won a provisional ICJ ruling preserving certain rights, the general atmosphere is that Western courts will deny enforcement of awards seen as undermining sanctions.
Recommendations & Way Forward
Arbitration must continue evolving to withstand future shocks. Key recommendations include:
- Harmonised guidance on sanctions: Arbitral institutions like ICC, UNCITRAL, LCIA and states should issue clear rules on how tribunals must or may treat sanctions. For instance, model provisions could require parties to seek licenses for fees, or allow substituted performance. Mutual recognition instruments for arbitral awards could include carve-outs ensuring awards satisfying one state’s laws do not conflict with another’s sanctions. Likewise, states should clarify that exercising jurisdiction under laws like Lugovoy is incompatible with their international obligations. Notably, the EU’s 2024 ban on Lugovoy‑based awards sets one model for member states.
- Institutional and technological modernization: The success of virtual hearings during COVID suggests retaining hybrid models. Institutions should embed remote proceedings in their rules as LCIA 2014 does and invest in secure platforms. Cybersecurity standards should be codified in guidance like the Seoul Protocol. Similarly, courts should accept e‑notifications and e‑signatures uniformly, avoiding exigent searches like Italy’s when original awards are digital.
- Flexible emergency relief frameworks: Given recurrent crises, arbitral rules might allow even faster interim tribunals. For example, expedited appointments within 48 hours and reduced fee bonds in emergency arbitrations can be considered. National courts should streamline cross-border interim relief.
- Public policy and treaty dialogue: The high stakes of public policy in sanctions warrants diplomatic/legal dialogue. For Ukraine‑related disputes, global consultation on enforceability could prevent blanket bans. States could consider multilateral arbitration safe havens e.g., require domestic courts to refer sanction cases to a neutral review body before blocking an award.
- Capacity building for developing jurisdictions: Crises often hit countries with weaker arbitration infrastructure hardest. ICC, UNCITRAL and courts like that off UK, Singapore should continue training on conducting remote proceedings, especially in conflict-affected regions. Financing support e.g. ICSID’s resumed grant program for low-income states can help ensure access to arbitration in global crises. The EU’s 2023 initiative to expedite arbitration access for Ukrainian companies is a model worth expanding.
- Future-proofing contracts: Finally, parties should update arbitration clauses and force majeure provisions to explicitly cover pandemics, wars, and sanctions. Model clauses like ICC’s 2021 pandemic force-majeure clause guidelines (UNCITRAL’s work) should become standard.
By blending these legal, procedural and technological strategies, international arbitration has emerged more resilient and can become more ready for future disturbances. It remains the preferred mechanism for cross-border disputes precisely because it adapts: as COVID‑19 proved, so do arbitrators and institutions adapt.
