The Impact of Sanctions on ADR in International Commercial Disputes: Legal Frameworks and Challenges
Year: 2025
Type: article
Abstract: International sanctions, imposed with increasing frequency and scope, significantly impact international arbitration and commercial disputes.Sanctions create legal and procedural hurdles, affecting jurisdiction, enforceability, and the financial viability of arbitration.According to the World Bank ( 2023), over 1,200 sanctions were imposed globally in the last five years 1 , affecting cross-border trade and arbitration proceedings.The Office of Foreign Assets Control (OFAC) 2 and European Union (EU) sanctions regimes have significantly disrupted contractual performance, causing asset freezes, travel restrictions, and payment limitations.This paper examines how sanctions delay arbitration, escalate costs, and impact enforceability by analyzing recent cases such as Bank Melli Iran v. Telekom Deutschland (2021) 3 and Ministry of Defence of Iran v. Cubic Defense Systems (2019) 4 , where sanctioned entities faced major obstacles in enforcing awards.Data from the International Chamber of Commerce (ICC) 5 and United Nations Commission on International Trade Law (UNCITRAL) reveal that nearly 30% of arbitration cases 6 involving sanctioned parties experience delays or enforcement challenges.Policy recommendations include harmonizing sanction regulations, establishing arbitration-safe payment mechanisms, and enhancing cooperation between arbitral institutions and regulatory bodies.
Authors: Aayush Bhardwaj, Shakshi Sharma
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4407590856