Our annual survey provides updates on significant legal reforms affecting arbitration in jurisdictions in North and South America, Asia, Europe, Africa and the Middle East, as well as discussions of major court rulings around the globe that affect arbitration.
What to Watch
Recent Developments
- Argentina | Brazil | Canada | Costa Rica | Egypt | France | Germany | Hong Kong | India | Kenya | Peru | People’s Republic of China | Saudi Arabia | Singapore |
South Korea | United Arab Emirates | United Kingdom | United States | Venezuela
What to Watch
Africa
Increasing government involvement in resource extraction. Many African jurisdictions with rare earth minerals and other natural resources have been undergoing significant geopolitical and regulatory changes. Governments are seeking to boost public finances and assert greater control over extractive industries, often in response to fiscal pressures, shifting public sentiment, and increasing unemployment. These developments have resulted in increased regulatory scrutiny, stricter local ownership requirements, and, in some cases, direct state intervention, all of which pose greater challenges going forward for all entities operating in these jurisdictions.
Botswana
In November 2024, the ruling party was replaced after 58 years in power. On October 1, 2025, the Botswana Mines and Minerals Act came into force, requiring new companies to sell a 24% stake (increased from 15%) in new concessions to local investors if the government declines to take a stake. Botswana is the world’s largest producer of diamonds by value.
Ghana
Following a change of government in December 2024, the Ghanaian parliament passed a law in April 2025 that granted exclusive authority over gold mining and trading to a newly established state body, the Ghana Gold Board. The new law effectively excludes foreign participation in the domestic gold value chain, in an effort to boost national revenue and streamline the country’s mining sector. Ghana is Africa’s largest gold producer and the sixth largest in the world.
Guinea
In May 2025, the Guinean government cancelled 129 mineral exploration permits — including for bauxite, gold, diamonds, graphite and iron — citing underutilization and non-operation. This has resulted in several potential and actual claims against the state, including, most recently, International Centre for Settlement of Investment Disputes (ICSID) proceedings commenced by an Emirati mining company. Guinea has the world’s largest reserves of bauxite.
Mali
Over the past few years, the government of Mali has introduced significant changes in the mining sector through legislative reform and direct intervention. For example, in November 2024, the government detained the CEO of a major Australian mining operator until the company agreed to pay $160 million to resolve a dispute with the government. Similarly, in ICSID arbitration proceedings commenced in December 2024, a major Canadian mining company accused Mali of seizing its gold assets and detaining its employees. (That dispute settled in November 2025.)
Tanzania
In November 2025, President Samia Suluhu Hassan was sworn in for a second term following general elections. She and her government are seeking to finalize an agreement with a consortium of foreign investors for the construction of a $42 billion liquid national gas (LNG) project in the Lindi Region of Tanzania. The project has been delayed for more than a decade, with the latest delays attributable to local content use issues. Separately, in August 2025, the Mauritian subsidiary of a natural gas operator commenced ICSID arbitration proceedings against Tanzania over the $1.2 billion Songo Songo gas-to-electricity project.
In February 2025, a tailings dam collapsed at a copper mine in northern Zambia, releasing acidic waste into the Kafue River, one of the country’s main water sources, raising concerns about environmental management and regulatory oversight. The incident has drawn comparisons to the Fundão tailings dam collapse in Brazil. In Zambia, the affected villagers have commenced proceedings in local courts against two mining companies.
Asia-Pacific
Statutory framework updates. Various Asia-Pacific (APAC) jurisdictions have introduced, announced or are considering amendments to their arbitration legislative frameworks: Amendments to the People’s Republic of China (PRC) Arbitration Law took effect in March 2026; amendments to the Singapore International Arbitration Act 1994 are working through the legislative process; and Hong Kong has established a working group to review and make recommendations to amend its Arbitration Ordinance.
Updates to institutional rules. Several arbitral institutions in the APAC region have introduced amendments to their rules. New rules were introduced in 2025 by the Singapore International Arbitration Centre (SIAC), Badan Arbitrase Nasional Indonesia (BANI) in Indonesia, and the Mumbai Centre for International Arbitration (MCIA). In addition, new rules were introduced in 2026 by the Korean Commercial Arbitration Board (KCAB) in South Korea, and the Asian International Arbitration Centre (AIAC) in Malaysia.
A central theme across these rules reforms is cost-effective dispute resolution, as seen in the introduction or expansion of expedited and streamlined procedures in the updated KCAB, BANI and SIAC rules. At the same time, there is a marked shift toward greater transparency and disclosure, with updates to third-party funding disclosure requirements in the updated KCAB, AIAC and SIAC rules.
Hong Kong
Reaffirmed pro-arbitration stance. The Hong Kong courts continue to reinforce their pro-arbitration stance. For example, the Hong Kong courts recently (1) dismissed an application to set aside an award on the basis that the tribunal exceeded its jurisdiction by deciding matters beyond the scope of the submission to arbitration (specifically, by deciding issues that did not feature in the pleadings or the agreed list of issues) (C1 and Others v IBS [2025] HKCFI 227); and (2) ordered an award debtor incorporated in the Cayman Islands to pay security for costs in its application to set aside the final award (Borrower v Lender [2025] HKCFI 3197). Such decisions signal that the Hong Kong courts will continue to support interim measures, dismiss what they see as tactical court challenges, and enforce final awards. The recent 2025 HKIAC statistics show that Hong Kong remains a preferred seat for arbitration.
Potential amendment of Hong Kong’s Arbitration Ordinance. The Hong Kong chief executive’s 2025 policy address noted that the government will review and consider amending Hong Kong’s Arbitration Ordinance. In October 2025, the Department of Justice established a working group to undertake this review and make recommendations to amend the law, with a view to further strengthening Hong Kong’s position as an international arbitration center.
India
The Mumbai Centre for International Arbitration (MCIA) recently rolled out its third edition of arbitration rules, bringing in faster timelines, expanded powers for tribunals to summarily dismiss claims and new requirements for transparency. The new rules provide a comprehensive framework for multiparty and multi-contract disputes, including consolidation, joinder and concurrent proceedings. Further, the new rules provide for publication of redacted awards unless a party objects within six months, enhancing transparency and aligning the MCIA with international best practices. These changes are expected to streamline proceedings and increase confidence in MCIA-administered arbitrations.
People’s Republic of China
In March 2026, the Revised Arbitration Law of the People’s Republic of China came into effect, introducing key reforms to the country’s arbitration framework. The amendments will allow parties in foreign-related arbitrations to agree in writing on the seat of arbitration and permit ad hoc arbitration in certain foreign-related disputes. The law also enhances procedural tools, enabling parties to seek preservation measures, including in emergencies before arbitration is filed. Notably, the new law will expand the doctrine of “kompetenz-kompetenz,” empowering arbitral tribunals to rule on the validity of arbitration agreements, although the People’s Court will retain the ultimate authority if the parties approach both the arbitral tribunal and the court. The new law is expected to improve and modernize the arbitral offerings in Mainland China.
Republic of Korea
The new Korean Commercial Arbitration Board (KCAB) Rules came into effect on January 1, 2026. This is the first comprehensive revision of the KCAB Rules since 2016, and is designed to align South Korea with global best practices in international arbitration. The reforms focus on faster and more transparent KCAB-administered proceedings, as well as a higher quality of arbitral awards. A cornerstone of the reforms is the creation of the KCAB Court. The manner in which these developments will be operationalized, and indeed their success, will be watched closely as arbitrations start to be administered under the new framework.
Singapore
In August 2025, SIAC launched the Restructuring and Insolvency Protocol. The protocol is the first of its kind among arbitration institutions and is intended to provide a tailored framework for arbitration of restructuring and insolvency disputes. The adoption of the protocol and its operation in initial test cases will be closely watched, and the protocol may serve as a model for other arbitral institutions to introduce similar mechanisms as the number of cross-border insolvency cases continues to rise.
Europe
France
Modernization of French arbitration law. On December 12, 2025, the French Ministry of Justice released a draft decree that is designed to be a first step in modernizing French arbitration law and invited practitioners to provide feedback by the end of January 2026. The draft has been submitted to the French Council of State for review. The prime minister is expected to sign the decree later this year. The main aspects of the draft decree are (i) the codification of case law developments, and (ii) the increased flexibility of the French arbitration system to better adapt to the needs of the parties.
The Ministry of Justice is expected to release additional decrees throughout 2026 and 2027, possibly addressing contentious aspects of French arbitration law that were not addressed in the initial decree. Looking further ahead, once France’s arbitration law reform is complete, it is expected that France will enshrine its arbitration legal framework in a self-contained Arbitration Code.
Germany
Reform of German arbitration law. In 2025, Germany held elections of the Federal Parliament of Germany (Bundestag). The new German government re-initiated reforms to the German arbitration law. On January 27, 2026, the Federal Ministry of Justice and Consumer Protection (BMJV) published a new draft bill aimed at modernizing the German arbitration law. This reform initiative is part of a broader strategy to strengthen Germany as a hub for international dispute resolution and to ensure that its legal framework remains competitive and attractive for cross-border arbitration. Overall, it represents an effort to update the German arbitration law in line with international standards and current technological developments.
The proposed reforms include:
- Video hearings. The new law would expressly permit the use of video hearings and the issuance of arbitral awards in electronic form. This move is designed to facilitate the digitalization of arbitral proceedings, making them more efficient, while also aligning the treatment of arbitral awards with that of decisions by state courts. The reform also seeks to modernize the formal requirements for arbitration agreements, allowing them to be concluded and documented in a technology-neutral manner, provided that documentation is available for evidentiary purposes.
- Documents in English. Under the new proposal, parties will be able to submit English-language documents to state courts in matters related to arbitration without the need for translation, unless a court specifically requests it. Furthermore, certain proceedings before specialized Commercial Courts and the Federal Court of Justice (Bundesgerichtshof) may be conducted entirely in English. These measures are intended to enhance Germany’s appeal as a venue for international arbitration and to facilitate cross-border dispute resolution.
- Restitution. The reforms introduce a new basis for challenging arbitral awards through an action for restitution. This mechanism is intended to apply where annulment proceedings are no longer permissible, but a party learns that one of the enumerated restitution grounds exists. These include that an award has been obtained through bribery or that a party — through no fault of its own — belatedly finds a document that would have led to a decision in its favor. Requests for restitution must be brought no later than five years after the award was issued.
- Transparency. Finally, the draft bill aims to improve transparency in arbitration. It provides for the publication of arbitral decisions under certain conditions, unless the parties object, and mandates the publication of certain court decisions in annulment, recognition and enforcement proceedings.
New arbitral tribunal for Nazi-looted art. Effective December 1, 2025, Germany established the Schiedsgerichtsbarkeit NS-Raubgut, a new set of arbitral rules for the adjudication of claims related to Nazi-looted art. The new system replaces a seldom-invoked advisory commission that could only issue nonbinding recommendations. Unlike the former advisory commission, tribunals established under the new rules will have authority to issue binding decisions. Public institutions (such as museums) that are willing to be subject to the rules will declare a binding offer to arbitrate, enabling claimants to initiate proceedings at their will.
Each arbitral panel will consist of five members drawn from a closed roster of arbitrators, which was developed in collaboration with the Central Council of Jews in Germany and the Jewish Claims Conference. Each party to the dispute will appoint one arbitrator with legal expertise and one with qualifications in history or provenance research. These four appointees will then select a chairperson — preferably a judge, but in any event a jurist — by majority vote. The establishment of the Schiedsgerichtsbarkeit NS-Raubgut marks a significant advancement in Germany’s implementation of the Washington Principles on Nazi-Confiscated Art and sets a new international benchmark for the restitution of cultural property confiscated by the Nazis.
United Kingdom
Implementation of new arbitration law. The Arbitration Act 2025 (2025 Act) came into force on August 1, 2025. The law introduces amendments to the Arbitration Act 1996, and its new provisions apply to all court or arbitral proceedings commenced on and after that date. They are aimed at ensuring that London remains one of the leading centers for international arbitration. The key aspects of the law include:
- Governing law of the arbitration agreement. Unless the parties expressly choose otherwise, the law of the seat of the arbitration now governs the arbitration agreement. The choice of law governing the contract containing the arbitration agreement will not constitute a choice of law governing the arbitration agreement.
- Jurisdictional challenges. The process for jurisdictional challenges under section 67 of the Arbitration Act 1996 is now a review only, not a full rehearing of the evidence, as was the case under the 1996 Act. A full rehearing will only be permitted in exceptional cases.
- Other. The 2025 Act also strengthens arbitrators’ immunity; introduces a new power to ensure that the orders of emergency arbitrators can be enforced; introduces a new power of summary judgment; expands the court’s powers to make orders against third parties; simplifies the process for referring a point of law to the English courts; and codifies arbitrators’ duties of disclosure.
Latin America
EU and Mercosur sign trade deal. After a quarter-century of discussions, the European Union and Mercosur have signed a trade agreement aimed at reducing tariffs and increasing trade between the two regions. The EU-Mercosur agreement establishes one of the world’s largest free trade zones, encompassing 31 countries and a combined population of 700 million people. The trade agreement still requires approval from the European Parliament and ratification by the legislatures of Mercosur member countries before it comes into force. Meanwhile, the European Parliament has voted to refer the terms of the agreement to the Court of Justice of the European Union. The court will review the treaty to ensure it complies with European regulations and the legal foundations of the agreement.
Brazil
Brazil considers new Civil Code. The Brazilian Congress is debating a proposal to enact a new Civil Code. The bill, presented to the Brazilian Senate in early 2025, is now before a special commission and public hearings are being held to gather commentary. Commentators suggest that the bill would effect a material change to the current system of obligations, contracts and liability, and may require the review of countless contracts.
The bill also introduces provisions that overlap with the Brazilian Arbitration Act, which commentators warn could lead to confusion concerning the tolling of certain statutes of limitations. In addition, the bill requires bylaws to specify whether disputes between shareholders or between shareholders and the company “will be decided by arbitration.” Commentators suggest that this could have the unintended consequence of making it harder for companies to adopt or forego arbitration as a dispute-resolution mechanism in cases where company bylaws require unanimity to make future changes. The Brazilian Senate’s special commission responsible for the bill expects its work to conclude in June 2026, at which point it will become clear whether these and other proposals will become part of the Civil Code.
Chile
President José Antonio Kast was elected president and took office in March 2026, marking a significant political shift toward conservatism. The new government is expected to prioritize stricter security measures, tighter immigration control and a reduction in public spending over the first 18 months. Investors may be affected in several ways.
The administration has indicated that it plans to lower corporate taxes and reduce regulatory burdens in an effort to stimulate growth. In addition, under the Social Security Reform approved in 2024, employer contributions will increase progressively, with employers expected to bear a 3.5% contribution starting in August 2026, up from 1% in 2025, without reducing employees’ net salaries.
Colombia
Colombia faces a pivotal 2026 election cycle because current President Gustavo Petro, the first left wing leader to be elected to the presidency, is constitutionally barred from reelection, raising uncertainty about whether his policies will continue post-election. From a legal and regulatory perspective, several trends warrant close attention. Tax reform and enforcement remain priorities, with DIAN (National Directory of Taxes and Customs) presently focusing on anti-evasion efforts and potential reforms targeting online gambling, electronic services and stricter rules on indirect asset transfers. Energy transition and mining policy continue to generate legal debate as the government advances its shift away from fossil fuels toward renewable energy and sustainable agriculture.
Venezuela
Following the U.S. military action in January 2026 that resulted in a new government, in January 2026, Venezuela enacted a landmark reform to its hydrocarbons regime, marking the most significant change since the sector was nationalized in 1976. The overhaul of the Organic Hydrocarbons Law fundamentally reshapes the participation of private and foreign companies in the country’s oil and gas industry.
Notably, the reform allows private companies incorporated in Venezuela to directly engage in exploration, extraction and commercialization of oil and gas through contracts with state-owned operators, bypassing the previous requirement to form majority state-owned joint ventures. These “Upstream Contracts” are exempt from public procurement laws, streamlining their negotiation and execution, and require companies to demonstrate financial and technical capacity. The reform also introduces an economic stabilization mechanism to protect Upstream Contracts from subsequent adverse changes, and expands rights for minority shareholders in mixed public-private companies in which the state has control.
A notable aspect of the reform is the introduction of increased flexibility in dispute resolution, enabling contracts to incorporate arbitration or local court provisions without requiring prior approval from government authorities. For foreign investors, these adjustments represent significant progress toward opening and liberalizing the sector, though many practical aspects still require clarification. The overall effect of the reform will ultimately depend on future regulatory guidance and the manner in which the Venezuelan government implements these new measures.
Middle East
Modernization and promotion of arbitration in the Middle East. Over the last decade, the Middle East has witnessed a significant transformation in its arbitration landscape, with countries across the region actively working to position themselves as leading centers for dispute resolution. This drive has been marked in part by the establishment of various new arbitral institutions. This includes (1) the launch of the Abu Dhabi International Arbitration Centre in 2024, replacing the Abu Dhabi Commercial Conciliation and Arbitration Centre; (2) the creation of the Oman Commercial Arbitration Centre 2018; (3) the creation of the Saudi Sports Arbitration Centre in 2016; and (4) the launch of the Emirates Maritime Arbitration Centre in 2016.
Additionally, several countries and institutions recently updated their regulatory frameworks to introduce new rules regarding both the use of technology and expedited procedures, and emergency arbitrator rules, in order to create systems that aim to be more efficient and able to handle disputes at speed. Such updates include:
- On January 1, 2025, the Qatar International Center for Conciliation and Arbitration introduced a new Arbitration Act, featuring expedited procedures available for small claims and emergency arbitration provisions allowing for urgent interim relief. The rules also provide parties with the ability to file submissions electronically and for the tribunal to sign arbitral awards electronically.
- The Cairo Regional Centre for International Commercial Arbitration updated its rules in January 2024 for the first time in 12 years, introducing provisions to address the joinder of additional parties and consolidation of arbitrations, early dismissal of claims, expedited procedures for small claims and emergency arbitrator provisions. The rules additionally allow parties to send communications electronically.
- In September 2023, the United Arab Emirates (UAE) brought into force Federal Law No. 15 of 2023, which introduced amendments to Federal Law No. 6 of 2018, the framework underpinning arbitration in the UAE. These new advancements include provisions for parties to hold hearings virtually.
- The Dubai International Arbitration Centre released new Arbitration Rules in March 2022, now allowing for hearings to take place and witnesses to give evidence virtually and for awards to be signed electronically. The rules also provide for powers regarding consolidating arbitrations, and for expedited procedures and emergency arbitrations.
- The Saudi Center for Commercial Arbitration implemented new rules in May 2023, allowing for joinder and consolidation provisions, technology integration, online dispute resolution and expedited processes for small claims.
These developments reflect a regionwide commitment to modernizing and enhancing procedural efficiency. Together, they aim to make the Middle East an increasingly attractive and competitive seat for arbitration going forward.
North America
Canada
U.S. tariffs on Canada. In February 2025, relying on the International Emergency Economic Powers Act (IEEPA), the Trump administration imposed a 25% ad valorem tariff on goods from Canada (excluding goods compliant with the U.S.-Mexico-Canada Agreement), as well as a 10% tariff on energy or energy resources, by declaring an emergency at the U.S.’s northern border related to the flow of fentanyl. The Trump administration then increased the 25% tariffs to 35% in July 2025.
The U.S. Supreme Court’s February 20, 2026, decision in Learning Resources, Inc. v. Trump, No. 24-1287 (see “Trump administration imposes new tariffs after invalidation of IEEPA tariff program” below) invalidated these and other tariffs declared under IEEPA (including tariffs on goods from Mexico and China). However, the Trump administration has since imposed a new 10% on certain goods from Canada as part of a global tariff under Section 122 of the Trade Act. These tariffs went into effect February 24, 2026, and are set to expire on July 24, 2026, unless extended by congressional approval. On May 7, 2026, the U.S. Court of International Trade (CIT) ruled that the imposition of duties under Section 122 was unlawful in the consolidated cases of State of Oregon v. Trump (No. 26-cv-01472) and Burlap and Barrel, Inc. v. Trump (No. 26-cv-01606), Slip Op. 26-47 (U.S. Ct. Int’l Trade, May 7, 2026). The CIT’s ruling, which applies only to the plaintiffs found to have standing, has been stayed pending appeal to the U.S. Court of Appeals for the Federal Circuit. A new set of tariffs under a different legal authority, Section 301 of the Trade Act of 1974, is widely anticipated to be rolled out in the coming months.
The Learning Resources decision does not, however, affect tariffs the Trump administration imposed on steel and aluminum. In March 2025, relying on separate authority under Section 232 of the Trade Expansion Act, the administration extended the 25% tariff to imports of steel, aluminum and their derivatives. In June 2025, the administration increased this to 50%. Nor does Learning Resources affect the 25% tariffs imposed on automobiles and automobile parts from Canada in 2025 (excluding certain automobiles or automobile parts entitled to preferential treatment under the U.S.-Mexico-Canada Agreement), which were also issued under Section 232.
Companies purchasing, importing or selling goods subject to tariffs (particularly in the steel, aluminum and auto industries) may face cost increases and supply chain disruptions. Disputes arising out of tariff-impacted relationships may play out in domestic and foreign courts, as well as arbitral tribunals, for years to come, and may implicate legal issues including whether the terms of parties’ contracts excused nonperformance based on a “change in law” or force majeure, or whether performance was excused under common-law doctrines such as changed circumstances, frustration of purpose, illegality or impossibility.
Additionally, and as discussed further below (see “Trump administration imposes new tariffs after invalidation of IEEPA tariff program”), disputes may arise over parties’ entitlement to refunds issued by the Trump administration for the now-invalidated IEEPA tariffs.
Initiatives of new Liberal government. In March 2025, Mark Carney, leader of Canada’s Liberal Party, formed a new Liberal government after elections. Policy changes as a result of this election may bring about changes to the Canadian regulatory environment, in particular as it relates to energy policy, given the energy-related campaign promises of the Liberal Party. In particular, the Liberals announced plans to expand investment in clean energy and critical minerals, accelerate certain energy-related project approvals, reduce Canada’s energy reliance on the U.S., and deepen Indigenous partnerships in energy projects.
As an early demonstration of this, Carney doubled funding of the Indigenous Loan Guarantee Program, which aims to unlock capital for Indigenous communities to gain full equity ownership in natural resource and energy projects, from $5 billion to $10 billion. In October 2025, Carney announced a $2 billion investment to support the construction and operation of four small modular reactors at the Darlington New Nuclear Project in Ontario.
More recently, the government has focused its attention on supporting Canada’s electric vehicle (EV) transition and responding to the Trump’s administration’s tariffs affecting its automotive sector. Carney has unveiled a series of initiatives intended to bolster EV transition, including decreased tariffs on Chinese EVs and a memorandum of understanding with South Korea to encourage Korean automobile and battery manufacturing in Canada. In February 2026, the government unveiled a series of initiatives intended to reduce reliance on the U.S. and to expand domestic car production (including incentives for EV buyers). These and future initiatives aimed at boosting innovation in infrastructure development and advancing energy sovereignty may include measures that affect existing or planned investments in the energy sector, which may impact foreign investors.
Mexico
In 2026, Mexico’s legal and economic landscape will be shaped by the upcoming mandatory review of the U.S.-Mexico-Canada Agreement on trade (USMCA), heightened pressure from the U.S. regarding goods and components linked to China, strengthened tax enforcement and potentially significant changes in labor regulation.
The USMCA will undergo its official review on July 1, 2026, with key focus areas expected to include rules of origin, stricter environmental and labor enforcement, scrutiny of Chinese investments and supply chain participation in the Mexican manufacturing sector.
Other regulatory developments to monitor include the introduction of a new federal Circular Economy framework in 2026, which is expected to harmonize national and state policies and impose stricter obligations on producers regarding waste management, reuse and recycling. Water law reform is also anticipated, prioritizing human consumption over industrial use and potentially increasing operational costs and regulatory exposure for manufacturing, mining and agriculture. In the energy sector, continued restrictions on private investment in generation are expected, with the state-owned electric utility maintaining a dominant role.
United States
Trump administration imposes new tariffs after invalidation of IEEPA tariff program. On February 20, 2026, the U.S. Supreme Court in Learning Resources, Inc. v. Trump, No. 24-1287, invalidated much of the Trump administration’s tariff program under the IEEPA.
In the days following the U.S. Supreme Court decision, the Trump administration imposed a new 10% global tariff under Section 122 of the Trade Act. Section 122 authorizes temporary tariffs under certain limited conditions, not to exceed 15% and not to extend beyond a period of 150 days. The Section 122 tariffs are scheduled to expire on July 24, 2026, unless extended by Congress. On March 5, 2026, 24 states challenged the legality of the new Section 122 tariffs in federal court, alleging that the administration has not met the narrow circumstances and conditions under which the statute may be invoked, and that the tariffs exceed the scope of tariffs that may be imposed under the statute. On May 7, 2026, the CIT ruled that the imposition of duties under Section 122 was unlawful. The CIT’s ruling, which applies only to the plaintiffs found to have standing, has been stayed pending appeal to the U.S. Court of Appeals for the Federal Circuit. The Trump administration is widely expected to attempt to replicate the IEEPA tariff program under other legal authorities in the coming months.
Following the Supreme Court’s decision in Learning Resources, importers turned to the CIT for refunds of previously paid tariffs. While more than 2,000 cases were filed in the CIT, those cases were all stayed. On March 4, 2026, the CIT then issued a decision in Atmus Filtration, Inc. v. United States, in which a single judge ordered the government to craft a program to refund duties on nearly all of the more than 53 million entries on which IEEPA tariffs had been paid. Although Atmus was later voluntarily dismissed by the plaintiff, the judge issued a similar order in Euro-Notions Florida, Inc. v. United States on April 7, 2026.
Following these decisions, the government has been preparing a multiphase refund system — Consolidated Administration and Processing of Entries (CAPE) — that allowed it to begin processing refunds for an initial group of entries on April 20, 2026. See our March 24, 2026, client alert “Tariff Refund Mechanism Takes Shape After Supreme Court’s IEEPA Ruling.” In a May 12, 2026, declaration filed with the CIT, the government reported that 126,237 CAPE declarations have been submitted, of which 86,874 had passed the initial validation checks as part of CAPE’s initial phase.
The ongoing refund process may lead to disputes between commercial counterparties as to which party bears responsibility for seeking refunds for the invalidated IEEPA tariffs, and/or which party is then entitled to the benefit of those refunds. Under U.S. law, the “importer of record” bears responsibility for paying the tariff in the first instance and, as such, any refunds will be issued to the importer of record. See 19 U.S.C. § 1484(a)(1). However, parties to whom the tariff cost was subsequently shifted may bring suit arguing that they are entitled to the refunds either under the parties’ contract or under a common-law, quasi-contract theory like unjust enrichment.
U.S. arbitral institutions incorporate AI into arbitration. U.S. arbitral institutions continue to incorporate the use of AI into their capabilities. In November 2025, the American Arbitration Association’s (AAA) International Centre for Dispute Resolution (ICDR) launched an “AI Arbitrator” function to evaluate claims, generate recommendations and prepare draft awards to be reviewed by human arbitrators. This will be used initially in documents-only construction cases, although the AAA has advised it may expand its use to other case types. More recently, in March 2026, the AAA announced its “Resolution Simulator,” a tool powered by the AI Arbitrator that offers an AI-generated simulated decision to assess potential exposure and evaluate dispute resolution strategies (also intended for use in documents-only construction disputes).
These developments follow the ICDR’s release of “Guidance on Arbitrator Use of AI Tools,” which, among other things, advised that arbitrators should disclose their use of generative AI tools when use of such tools materially impacts the arbitration process or the reasoning underlying their decisions. The implementation of these tools can be expected to evolve as they are tested by arbitrators and practitioners.
Recent Developments
Argentina
Appellate Court Reverses $16.1 Billion YPF Judgment Against Argentina
On March 27, 2026, the United States Court of Appeals for the Second Circuit (Second Circuit) reversed a $16.1 billion judgment against the Republic of Argentina in Petersen Energía Inversora, S.A.U. et al. v. Argentine Republic (S.D.N.Y. Sept. 15, 2023), which had been described as the largest money judgment awarded against a sovereign nation in U.S. court.
The judgment had been obtained by two minority investors in Yacimientos Petroliferos Fiscales (YPF), Argentina’s largest oil and gas company. When Argentina privatized YPF in the 1990s, in order to attract investors, it amended the bylaws to provide that if the company were ever renationalized, the Republic would make a tender offer to all shareholders. In 2012, Argentina renationalized YPF and did not make any tender offer. Two minority investors, Petersen Energía and Eton Park Capital Management, alleged that Argentina was therefore liable for breach of contract damages.
The Southern District of New York agreed and granted summary judgment against Argentina. After issuing the judgment awarding damages, the District Court ordered Argentina to turn over its 51% stake in YPF to partially satisfy the $16.1 billion judgment. There were also extensive enforcement proceedings worldwide, including in the U.K., France, Ireland, Canada, Australia, Luxembourg, Brazil and Cyprus.
Argentina appealed to the Second Circuit, which analyzed issues of Argentine law de novo. The Second Circuit reversed the judgment on the basis that, under Argentine law, the bylaws did not create a bilateral promise giving rise to a contractual obligation running from the Republic to the other shareholders. In other words, a breach of contract damages claim was not cognizable as a matter of Argentine law. The court further found that even if the YPF bylaws would otherwise be enforceable as a bilateral contract, their application in this case would violate Argentina’s General Expropriation Law.
According to public statements, the investors intend to pursue investment treaty arbitration against Argentina and may seek further review of the decision in U.S. courts.
Brazil
UK Court Finds Mining Parent Companies Liable for Dam Collapse in Brazil in Phase One Trial
On November 14, 2025, in Município de Mariana and other Claimants v. BHP Group UK Limited (Formerly BHP Group PLC) and BHP Group Limited [2025] EWHC 3001 (TCC) (Nov. 14, 2025), the English High Court issued a ruling following a Phase One trial in which it found BHP Group liable under Brazilian environmental and civil law. The U.K. group action was brought against BHP Group Limited (the parent company of BHP Brasil) (BHP), and BHP Group (UK) Limited (a former dual-listed U.K. entity) by over 600,000 Brazilian claimants seeking damages in relation to the Samarco Fundão dam failure that occurred in November 2015 in Brazil. The English High Court held the parent companies responsible for actions of the non-operated Brazilian joint venture, holding that BHP was liable on the basis that it is a “polluter” under Brazilian environmental law and at fault under the Brazilian civil code (but did not find liability under Brazilian corporate law). In addition to the liability finding, the English High Court decision upheld the validity of releases of approximately 240,000 of the claimants in the U.K. action who already had been compensated in Brazil. BHP has appealed the decision.
Subject to that appeal, a second-phase trial will decide additional issues, including whether losses claimed by certain lead claimants were caused by the dam failure. This second-phase trial is currently scheduled from March 2027 with closings to end by April 2028. Following any decision and appeals in that Phase Two trial, a Phase Three trial may also be required, in which each remaining claimant would need to prove its individual damages. This third trial is unlikely to occur before 2028.
Canada
ADRIC’s New Arbitration Rules Come Into Force
The ADR Institute of Canada (ADRIC) introduced new arbitration rules and an arbitrator appointment protocol, effective March 1, 2025, aimed at modernizing procedures. The new rules are designed for Canadian commercial disputes but also are applicable to international and non-commercial matters. They emphasize party autonomy, flexibility and efficiency to facilitate fair and final dispute resolution, while reducing reliance on courts. Key features include a customizable menu of ADRIC support services, the removal of distinctions between international and non-international disputes, a revised and more inclusive arbitrator appointment process, an expedited and confidential arbitrator challenge procedure, and enhanced standards for conflicts disclosure inspired by recent case law. Additionally, the new rules provide guidance aimed at making arbitration more accessible, transparent and effective for all parties.
Ontario Court of Appeals Rules That Arbitral Award Must Be Set Aside Where Reasonable Apprehension of Arbitrator Bias Is Established
A recent decision, Vento Motorcycles, Inc. v. Mexico, 2025 ONCA 82, established a new precedent in Ontario for considering the impact of arbitrator bias on an award. Vento Motorcycles Inc., a U.S.-based motorcycle manufacturer, brought a North America Free Trade Agreement (NAFTA) Chapter 11 arbitration claim against Mexico, alleging that Mexico’s denial of preferential import tariffs destroyed its business in Mexico. The arbitral tribunal, composed of three members (one appointed by each party and a chair appointed by ICSID), unanimously dismissed Vento’s claim.
After the award, Vento discovered that the Mexican-appointed arbitrator had communicated with Mexican officials during the arbitration, including being invited to apply for, and ultimately being appointed to, rosters of arbitrators for future trade disputes by Mexico. Vento applied to set aside the award, arguing these communications gave rise to a reasonable apprehension of bias. The application judge agreed there was a reasonable apprehension of bias but declined to set aside the award, reasoning that the bias did not undermine the reliability of the tribunal’s decision or result in real unfairness, especially because the other two arbitrators were not implicated and the arbitral award was unanimous.
In February 2025, the Ontario Court of Appeal overturned the application judge’s decision, holding that a finding of reasonable apprehension of bias is a serious breach of procedural fairness that cannot be balanced away by considerations of cost, inconvenience or the impartiality of other tribunal members. The court emphasized that the integrity and legitimacy of the adjudicative process require that any decision tainted by a reasonable apprehension of bias must be set aside. The court also rejected the notion that the unanimity of the panel or the presumed impartiality of the other arbitrators could cure the taint of bias. The court concluded that the appropriate remedy was to set aside the tribunal’s award. The Supreme Court of Canada dismissed Mexico’s application for leave to appeal to the Court in September 2025.
Ontario Superior Court of Justice Affirms High Standard for Setting Aside International Arbitral Awards
In The United Mexican States v. Gordon G. Burr, 2025 ONSC 5724, the Ontario Superior Court of Justice (Commercial List) reinforced the high threshold for setting aside arbitral awards on procedural fairness grounds and for courts to second-guess a tribunal’s discretionary rulings. In this case, Mexico granted a gambling permit to a group of U.S. nationals who operated a casino business in Mexico. Following a change in political leadership, Mexico revoked the permit and forcibly closed the casinos. The investors claimed that the revocation and closure were arbitrary and destroyed their investment, and brought a NAFTA arbitration.
The arbitration process spanned nine years, a complex and lengthy discovery phase with over 150 document requests, four rounds of legal submissions totaling more than 1,500 pages, and a nine-day hearing with over 20 witnesses. The arbitral tribunal ultimately found Mexico liable for breaching NAFTA’s fair and equitable treatment standard and ordered it to pay damages of over $80 million.
Mexico challenged the arbitral award in the Ontario Superior Court, arguing that the tribunal’s denial of certain document production requests and failure to address specific arguments constituted procedural unfairness and a denial of natural justice. In October 2025, the court dismissed Mexico’s application to set aside the arbitral award, finding that the arbitration process was comprehensive, fair and conducted with due process. The court found that the tribunal had broad discretion over document production, acted within international arbitration norms, and made reasonable decisions regarding the relevance and materiality of requested documents.
The court emphasized that a party is entitled to a fair hearing, not a perfect one, and that procedural rulings on document disclosure do not amount to procedural unfairness unless they result in a fundamentally flawed process. The Ontario court also rejected Mexico’s argument that the tribunal’s failure to address every argument individually constituted a denial of natural justice, noting that tribunals are not required to reference every argument in their awards. The court concluded that there was no evidence of real unfairness or practical injustice in the arbitration process and that the high threshold for setting aside an international arbitral award on the grounds of procedural unfairness was not met.
Costa Rica
Reform of Arbitration Law
On October 1, 2024, Costa Rica enacted Law No. 10535 to Harmonize Costa Rican Arbitration, which entered into force on April 2, 2025.
The reform marks a critical milestone in Costa Rica’s arbitration landscape, implements significant changes to arbitration practice in the country, and is intended to harmonize the arbitration legal framework, which previously distinguished between domestic and international arbitrations.
Among other things, the law (1) eliminates the distinction between domestic and international arbitration; (2) authorizes arbitral tribunals to issue interim measures in both national and international proceedings; and (3) extends arbitration agreements to include non-signatories, where their consent can be said to derive from their participation in the negotiation, execution or termination of the contract in question, as well as to persons who seek to obtain benefits from those contracts.
Egypt
Court Annuls Arbitral Award Denominated in Foreign Currency on Public Policy Grounds
In a landmark decision, the Egyptian Court of Cassation (Appeal Nos. 32779 & 32790/93J, Hearing of May 8, 2025) annulled an arbitral award denominated in foreign currency on public policy grounds.
A foreign buyer commenced an arbitration, seeking 58 million Egyptian pounds in damages from Egyptian sellers for breach of a memorandum of understanding (MoU) relating to the sale of shares in an Egyptian joint stock company. The MoU was governed by Egyptian law and provided for Egypt-seated arbitration administered by the Cairo Regional Centre for International Commercial Arbitration. The tribunal awarded the investor approximately $23 million in damages, denominated in U.S. dollars. The sellers challenged the award on the basis that it violated Article 212(1) of the Egyptian Central Bank Law No. 194 of 2020, which requires domestic transactions to be conducted in Egyptian pounds unless otherwise provided by law.
The Egyptian Court of Cassation annulled the award because it called for payment in a foreign currency in Egypt without an express agreement between the parties to that effect, which violates foreign exchange laws. In this decision, the Egyptian courts expanded the scope of the public policy exception to include mandatory foreign exchange laws related to public order.
Parties entering into transactions in Egypt should consider whether their contracts permit compensation to be made in a foreign currency or its equivalent in Egyptian pounds.
France
France Moves to Modernize Arbitration Law
As discussed in the Trends to Watch section above, on December 12, 2025, the French Ministry of Justice published a draft decree aimed at modernizing French arbitration law. The draft decree is intended to codify certain landmark case law developments and seeks to achieve three main goals:
- Facilitating the commencement of an arbitration
- In domestic arbitration (as is already the case in international arbitration), agreements to arbitrate will no longer need to be in written form to be legally enforceable. Removing this formalistic requirement seeks to reinforce the consensual nature of the agreement to arbitrate as a standalone contract in whatever form expresses the parties’ common intention.
- Parties will be permitted to submit, within one single arbitration, claims related to multiple contracts, even where such claims are made under multiple arbitration agreements, provided that those agreements are compatible and that having the claims entertained in a single set of proceedings will serve the interests of justice. The draft decree’s new provision, inspired by Article 9 of the International Chamber of Commerce (ICC) arbitration rules, is expected to make matters easier for parties involved in multi-contract disputes.
- Improving arbitral efficiency
- The court responsible for supervising arbitral proceedings (juge d’appui) will have the power to render enforceable any provisional measures granted by the arbitrators, notwithstanding that the procedural order granting such measures does not qualify as an award.
- Once parties have submitted their dispute to an arbitral tribunal, French state courts will be required to decline jurisdiction over the matter automatically. (Pre-decree, a state court could assume jurisdiction over a dispute even after the parties had referred it to arbitration in circumstances where the arbitration agreement appeared manifestly inapplicable or legally unenforceable.)
- Improving the efficiency of post-arbitration litigation before French courts
- In setting-aside proceedings before the Paris Court of Appeal (which determines applications to set aside international arbitration awards), a party will not be permitted to introduce arguments that it could have but failed to make before the arbitral tribunal.
- It will be possible to conduct setting-aside proceedings confidentially if all parties so request or on the Court of Appeal’s own initiative.
Germany
Two Cases Enforce the EU’s Post-Achmea Position on Intra-EU Arbitration
On March 27, 2025, the German Federal Court of Justice (BGH) (Ref. no.: I ZB 64/24) issued a decision declining to enforce a cost award issued in an intra-EU investment arbitration between German investors and the Czech Republic. The dispute arose from legislative changes in the Czech energy sector, with the investors asserting claims under both the Germany-Czech Republic Bilateral Investment Treaty (BIT) and the Energy Charter Treaty (ECT). The arbitration, conducted pursuant to the United Nations Commission on International Trade Law (UNCITRAL) Rules, resulted in the dismissal of the investors’ claims and an order requiring the investors to pay approximately $1.75 million in costs to the Czech Republic.
The BGH determined that the arbitration agreements, which were based on Article 26 of the ECT and Article 10 of the BIT, were invalid under EU law. It based this decision on the European Court of Justice’s (CJEU) rulings in Achmea and Komstroy, which held that investor-state arbitration is inadmissible in an intra-EU context. The BGH emphasized that the invalidity of the arbitration agreements under EU law not only precludes enforcement of awards on the merits, but also extends to cost awards. The court rejected arguments that cost awards should be treated differently, and that the UNCITRAL Rules or the arbitral tribunal’s “inherent powers” could provide an independent basis for jurisdiction over costs. Additionally, the BGH held that due to the supremacy of EU law, investors are not estopped from challenging the validity of the arbitration agreement, even after having initiated the arbitration.
In a separate decision dated July 31, 2025, the German Federal Constitutional Court (Ref. no.: 2 BvR 1277/23) declined to allow a constitutional complaint challenging the BGH’s ruling that an intra-EU International Centre for Settlement of Investment Disputes (ICSID) arbitration under the ECT was inadmissible. The underlying dispute arose from claims brought by Irish investors against Germany, following regulatory changes impacting offshore wind projects. The investors sought damages through ICSID arbitration proceedings.
The BGH asserted jurisdiction to rule on the admissibility of the ICSID arbitration based on Section 1025(2) and Section 1032(2) of the German Code of Civil Procedure. These provisions allow a party, prior to the constitution of the arbitral tribunal, to petition a German court to determine the admissibility or inadmissibility of arbitral proceedings, even where the seat of arbitration is located outside of Germany. Although ICSID arbitrations do not have a designated seat of arbitration, the BGH reasoned that, in light of the supremacy of EU law and the jurisprudence of the CJEU in Achmea and Komstroy, intra-EU investor-state arbitration clauses under the ECT are invalid. Accordingly, the BHG held that German courts are required to ensure the effectiveness of EU law by preemptively blocking such arbitral proceedings.
The Federal Constitutional Court upheld the BGH ruling and decided that the BGH’s approach did not violate constitutional rights or constitute impermissible judicial lawmaking. The court noted that, under Article 41 of the ICSID Convention, the competence to decide on the admissibility of the claim lies with the ICSID tribunal. It emphasized that the BGH’s reasoning was nevertheless methodologically sound and consistent with both the German Constitution’s commitment to EU law and the prevailing consensus among EU member states that EU law prevails even over international treaties. On that basis, the Constitutional Court held that the intervention of German courts would not violate the rights of claimants in non-EU jurisdictions or before ICSID tribunals.
Both decisions reaffirm Germany’s alignment with the EU’s post-Achmea legal framework, confirming that German courts no longer consider intra-EU investor-state arbitration under the ECT to be viable, including in the context of ICSID proceedings.
Enforcement of Russian Arbitral Awards Refused Due to EU Sanctions
In two separate decisions issued on May 13, 2025, and June 12, 2025, the Higher Regional Court of Stuttgart (Ref. no.: 1 Sch 3/24) and the Higher Regional Court of Frankfurt am Main (Ref. no.: 26 Sch 12/24) declined to recognize and enforce Russian arbitral awards, citing concerns that such enforcement would contravene EU sanctions imposed against Russia.
In the Stuttgart case, the underlying dispute arose from a contract pre-dating Russia’s invasion of Ukraine pursuant to which a German seller agreed to deliver industrial machinery to a Russian purchaser. Following the imposition of EU sanctions in response to the invasion of Ukraine, the German seller suspended deliveries. The Russian buyer subsequently initiated arbitration proceedings in Russia, seeking reimbursement of advance payments made under the contract.
The facts underlying the Frankfurt case are substantially similar, except that the dispute concerned a 2022 contract for the supply of polymer alloys, which was never performed. In both cases, a Russian-seated arbitral tribunal ordered the sellers to reimburse the Russian buyer for advance payments.
Both courts determined that enforcement of the arbitral awards would violate Articles 3k and 11 of Regulation (EU) No. 833/2014. These provisions prohibit the sale, supply or transfer of funds in connection with goods that may contribute to enhancing Russian industrial capabilities. The courts further emphasized that this prohibition extends to the repayment of advance payments, even in circumstances where performance of the contract became impossible as a result of the sanctions. Accordingly, the Stuttgart and Frankfurt courts held that enforcement of the awards would be contrary to German public policy, as set forth in Section 1061 of the German Code of Civil Procedure and Article V(2)(b) of the New York Convention.
These decisions highlight the significant impact of EU sanctions on the recognition and enforcement of foreign arbitral awards in Germany, particularly in cases where the performance of the underlying contract is impeded by sanctions. Both matters are currently pending on appeal before the Federal Court of Justice (Ref. nos.: BGH, I ZB 53/25 (Stuttgart)n and BGH, I ZB 61/25 (Frankfurt).
In the second Federal Court of Justice appeal, on February 6, 2026, the court suspended the proceedings pending a decision by the ECJ in case no. C 802/24. In that case, Sweden’s Svea Court of Appeal (Svea hovrätt) has asked the ECJ to issue a preliminary ruling. The ECJ ruling is expected to clarify if the EU sanctions regime constitutes public policy that courts must enforce when deciding on the annulment or recognition and enforcement of arbitral awards. In his recent non-binding opinion, ECJ Advocate General Andrea Biondi noted that, where a court reviews an arbitral award and finds that it violates provisions of the applicable EU sanctions regulation, it must “grant the application to have the award set aside based on the breach of EU public policy in order to remove the incompatibility from the EU legal order.” The advocate general did clarify, however, whether in his view sanctions-related disputes remain arbitrable.
Hong Kong
Court Rejects Jurisdictional Challenge to HKIAC Tribunal
On March 18, 2025, the Hong Kong Court of First Instance dismissed an application by P1 and P2 (Ps) under Section 34 of the Hong Kong Arbitration Ordinance (HKAO) to set aside a tribunal’s order that it had jurisdiction in an HKIAC arbitration commenced by MR, a minority shareholder of P1, and ordered indemnity costs to MR (PI 1 and PI 2 v MR [2025] HKCFI 1110).
Ps contended that (1) MR’s claims of unfairly oppressive and/or discriminatory conduct by P2, a majority shareholder of P1, were not arbitrable because they fell within the exclusive jurisdiction of the Cayman Islands Law Court to wind up a company on the just and equitable ground (Oppression Claims); and (2) MR’s claims of alleged loss of trust and confidence in P2’s management of P1’s affairs fell outside the scope of the arbitration clause in the transaction agreements, and exceed the contractual jurisdiction of the arbitral tribunal (Loss of Confidence Claims).
With respect to the Oppression Claims, the court applied the Privy Council’s landmark decision in FamilyMart China Holding Co. Ltd. v Ting Chuan (Cayman Islands) Holding Corp. [2023] UKPC 33. The Court of First Instance observed that, under FamilyMart, (1) it is a decision for the Cayman Islands Law Court to make, in the exercise of its discretion, whether it is just and equitable to wind up a company; but (2) disputes between the parties as to whether one party has breached its obligations can be decided by the tribunal, even in the context of a winding-up application made to the court, and even if these matters can be said to be “precursors” to the question to be considered by the Cayman courts.
With respect to the Loss of Confidence Claims, the court considered the earlier decision in Dickson Holdings Enterprise Co. Ltd. v Moravia CV [2019] 3 HKLRD 210. The Dickson case was concerned with notice of meeting and share forfeiture requirements that arose independently of the relevant shareholders agreement. In that case, the court held that disputes arising from rights and obligations associated with the membership of a company that exist independently of the relevant shareholders agreement fall outside the scope of the relevant arbitration agreement.
The Court of First Instance distinguished the Dickson case on the basis that the Loss of Confidence Claims related “precisely” to obligations provided for, and arising under, the transaction agreements. On that basis, the court concluded that, whether contractual provisions were breached so as to establish a loss of trust and confidence, or to constitute oppression or discriminatory conduct, were matters for the tribunal, in accordance with the dispute resolution mechanism agreed to by the parties to the transaction agreements. The court also observed that the arbitration agreement was drafted in terms wider than the language used in the arbitration clause in the Dickson case.
This is the first published judgment in Hong Kong to substantively consider and apply the Privy Council’s landmark decision in FamilyMart. It confirms the pro-arbitration position of the Hong Kong courts and provides further certainty to those considering Hong Kong arbitration in tandem with a Cayman Islands corporate structure.
Arbitrator Challenge on the Grounds of Alleged Hostility, Prejudgment and Inattentiveness/Sleeping Rejected
On August 13, 2025, the Hong Kong Court of First Instance dismissed an application by CNG under Sections 25 and 26 of the HKAO to remove the presiding arbitrator (PA) (CNG v G & Anor [2025] HKCFI 3598). CNG alleged that the PA’s conduct during a hearing on June 24 and 25, 2024, gave rise to justifiable doubts as to his impartiality on the grounds that the PA (1) had treated CNG with overt hostility and had prejudged matters relevant to CNG’s position, and (2) had slept or was inattentive at the hearing.
The court confirmed that the applicable test is one of “apparent bias” — namely, whether “an objective fair-minded and informed observer, having considered the relevant facts, would conclude that there was a real possibility that the tribunal was biased.” Under this test, such observer is neither complacent nor unduly sensitive or suspicious. In the arbitration context, the professional reputation and experience of the arbitrator is a relevant consideration, as an established reputation for integrity and wide experience in arbitration may make any doubts harder to justify.
The court also confirmed that an objection on the basis of bias and the right to an impartial tribunal can be waived. Article 11.7 of the HKIAC Rules requires a party to issue a challenge within 15 days of becoming aware of the circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality or independence. CNG filed its challenge on July 10, 2024. The court found that CNG’s delay in bringing the challenge amounted to an informed and unequivocal waiver of any alleged bias with regard to incidents before June 25, 2024.
With respect to hostility and prejudgment, the court concluded that the PA’s comments reflected his preliminary views on CNG’s case, which were justified in light of the history of the arbitration and the evolution of the relevant claims. The court added that it is reasonable for an arbitrator to express his/her preliminary views (even in a robust or emphatic manner); that an experienced arbitrator would not have his/her mind entirely shut to opposing arguments when finally deciding the matter; and that the “objective fair-minded and informed observer” would recognize this.
With respect to inattentiveness and sleeping, the court concluded that the “objective fair-minded and informed observer” would not infer a real possibility of bias from the alleged fact that the PA had fallen asleep for intermittent periods of 15 minutes. The court found that the alleged sleeping episodes did not occur during a critical or complex part of the case, and CNG’s lawyers did not raise immediate objection (which suggested that they did not regard the PA’s inattention to have any material impact on the possible outcome).
This case is an important reminder that parties should bring any arbitrator challenge within the prescribed time limits, and should raise concerns regarding arbitrator conduct immediately. It is also a clear reminder of the high and fact-specific threshold for such challenges.
India
Supreme Court Rules That Courts Have the Power to Modify Arbitral Awards in Certain Circumstances
In April 2025, a five-judge constitution bench of the Indian Supreme Court issued a 4 to 1 decision in Gayatri Balasamy v ISG Novasoft Technologies Ltd., 2025 INSC 605, with the majority ruling that Indian courts have the power — albeit under limited circumstances — to “modify” an arbitral award under Sections 34 and 37 of the 1996 Indian Arbitration and Conciliation Act (Indian Act). The court’s decision applies to “domestic awards” issued in India-seated arbitrations.
An executive at ISG Novasoft filed a sexual harassment complaint against the respondent company and its CEO. The Madras High Court ordered the parties to arbitrate certain issues relating to compensation owed to the claimant under the arbitration clause in the claimant’s employment contract. A sole arbitrator found in favor of the claimant on certain issues but dismissed others, and the claimant moved to set aside the award under Section 34 of the Indian Act.
When the matter reached the Indian Supreme Court, it considered the question of whether the Court’s powers under “Sections 34 and 37 of the Arbitration and Conciliation Act 1996 will include the power to modify an arbitral award.” Writing for the majority, the chief justice found that Indian courts have a “limited power” to modify an arbitral award under the following circumstances: (1) where a part of the award is severable; (2) where there is a clerical, computational or typographical error that “appear[s] erroneous on the face of the record”; (3) where circumstances justify the modification of post award interest; and (4) where the Supreme Court is exercising its powers under Article 142 of the Indian Constitution to do “complete justice.”
Mumbai Centre for International Arbitration Updates Its Arbitration Rules
In May 2025, the Mumbai Centre for International Arbitration published the third edition of its Arbitration Rules (MCIA Rules).
Key amendments include:
- Early dismissal and summary procedures. The Tribunal is expressly authorized to dismiss a claim or defense that is “manifestly without legal merit,” “manifestly outside the jurisdiction of the Tribunal” or unlikely to succeed “even if the facts alleged by the other party are assumed to be true.”
- Expedited procedures. New expedited procedures apply by default to cases where the claims are less than INR 13 crore (approximately $1.5 million). Under the expedited procedures, the “award shall be made within 6 months from the date when the Tribunal is constituted unless, in exceptional circumstances, the Registrar extends the time.”
- Framework for multiparty/multicontract disputes. Several provisions address complex procedural postures where, for example, a party seeks to commence an arbitration “arising out of or in connection with more than one arbitration agreement” (Article 5), to consolidate arbitrations (Article 6), concurrent proceedings (Article 7) or to join new parties to an arbitration (Article 8).
- Third-party funding. Parties are required to make disclosures regarding agreements with third-party funders, including the identity of the third-party funder, and whether the funder “has undertaken to bear any adverse costs liability” (Article 37).
- Correction of awards. Within 30 days of the date of an arbitral award, a tribunal may “on its own initiative” correct errors (e.g., computation errors, clerical or typographical errors), and the parties may apply for the correction of such errors (Article 41).
- Publication of awards. The new rules provide that the “parties shall be deemed to have agreed that the MCIA may publish any decision, ruling, order, or award, and any reasoned decision by the Council with the names of the parties and other identifying information redacted.” Should a party choose to object to such publication, it must do so “within 6 months after the conclusion of the arbitration” (Article 47). This change marks a move toward more transparent arbitral practices and brings the MCIA Rules in line with other international rules that allow for the publishing of awards, including the ICC.
Kenya
High Court Sets Aside Arbitral Costs Award on Public Policy Grounds
In February 2025, the High Court of Kenya rendered a decision in Ongata Works Limited v Tatu City Ltd. [2025] KEHC 1916 (KLR), setting aside an ICC arbitral award of costs on the basis that it violated public policy.
The underlying ICC arbitration, commenced by a developer against a construction company over the construction of infrastructure in Kenya, was seated in Kenya and governed by Kenyan law. The sole arbitrator awarded the developer approximately $167,000 in damages and approximately $842,000 in costs. The construction company applied to set aside the award of costs on the basis that it violated Kenyan public policy because the costs awarded were five times the amount of the damages awarded.
The High Court of Kenya partially set aside the award as to costs, concluding that it was excessive, punitive and unreasonable relative to the award of damages, and therefore violated public policy in Kenya that legal costs should be reasonable and not arbitrary, and should be guided by reason and justice.
Article V(2)(b) of the New York Convention provides that recognition and enforcement of an arbitral award may be refused if it is contrary to the public policy of that country. Prior to Ongata Works, Kenyan courts interpreted the public policy exception narrowly, applying it in circumstances where the award clearly violated the basic or moral principles of Kenyan society. In Ongata Works, it appears that the court expanded the scope of the public policy exception. It also took the unusual step of criticizing the merits of the arbitrator’s decision.
Parties wishing to designate Kenya as an arbitral seat in their contracts should carefully consider the implications of this decision, and what it could mean for the recovery of legal fees.
Peru
Bribery Probe Leads to Charges Against Arbitrators and Requests Under Section 1782
In August 2025, Peruvian authorities announced the filing of criminal charges against arbitrators accused of taking bribes from the Brazilian construction giant Odebrecht in exchange for favorable arbitral awards. The accusations concern 17 arbitration proceedings related to disputes involving five highway projects.
In addition to the criminal charges, Peru also filed an application in the U.S. under 28 U.S. § 1782 seeking evidence located in the U.S. to be used in the Peruvian criminal proceedings. In November 2025, a federal court in New York granted Peru’s application for information related to Brookfield’s 2016 purchase of a majority shareholding in contractor Rutas de Lima SAC, an entity connected to Odebrecht. In re Application of the Republic of Peru for an Order Pursuant to 28 U.S.C. § 1782 (S.D.N.Y. Nov. 18, 2025).
People’s Republic of China
Revised Arbitration Law Takes Effect
As foreshadowed in last year’s edition of the Update, the Standing Committee of the 14th National People’s Congress has adopted the Revised Arbitration Law of the People’s Republic of China (PRC) (Revised Law) following public consultation. The Revised Law took effect on March 1, 2026.
Key amendments include:
Provisions relating to disputes involving a “foreign element” such as trade outside of China or a non-Chinese party:
- Seat of arbitration (Article 81). Parties may now agree in writing to the seat of arbitration for “foreign-related” arbitrations. In the absence of such an agreement, or the agreement is unclear in this regard, the seat will be determined by the applicable arbitration rules agreed between the parties.
- Ad hoc arbitration (Article 82). Ad hoc (or noninstitutional) arbitration is permitted in specific circumstances: (1) foreign-related maritime disputes, or (2) foreign-related disputes between enterprises established and registered in a Free Trade Pilot Zone approved by the State Council, the Hainan Free Trade Port or other designated areas.
Procedural enhancements:
- Time limit for setting aside arbitral awards (Article 72). The time limit for parties to apply to set aside an arbitral award will be shortened from six to three months from the date of receipt of the award. This aligns with Article 34 of the UNCITRAL Model Law.
- Preservation measures (Articles 39 and 58). Aligning with PRC Civil Procedure Law, parties may invoke the Revised Law to apply for preservation of property, conduct and/or evidence. In cases of emergency, such applications can be made prior to filing for arbitration.
- Doctrine of “kompetenz-kompetenz” (Article 31). Whereas previously a challenge to the validity of an arbitration agreement could be submitted only to the arbitral institution or the competent court of the PRC (People’s Court), a party may now also apply to the arbitral tribunal to make such a challenge. In circumstances where one party lodges a challenge with the arbitral institution or the arbitral tribunal, and the other party lodges a challenge with the People’s Court, the People’s Court retains priority and will rule on the matter.
Saudi Arabia
Reforms to Arbitral Framework Proposed
On September 25, 2025, the National Competitive Centre of the Kingdom of Saudi Arabia (KSA) published the first draft of its new arbitration law, opening a public consultation period that lasted until October 24, 2025. The findings of this consultation are being reviewed and, following any amendments from this consultation, the draft law is expected to be approved by Royal Decree and to enter into force 30 days after publication in the official Gazette.
The draft law introduces a suite of significant reforms aimed at modernizing the KSA’s arbitration framework and aligning it with international best practices. Key changes include:
- Empowering arbitral tribunals to issue emergency, interim and partial awards.
- Clarifying that the law governing the arbitration agreement is the law expressly chosen by the parties or, in the absence of such agreement, the law of the seat of arbitration.
- Introducing provisions for the joinder of parties and the consolidation of related arbitrations.
- Allowing appeals of all enforcement orders.
- Permitting parties to challenge a tribunal’s jurisdictional findings while proceedings are ongoing.
- Granting arbitrators immunity and removing the requirement for arbitrators to hold a degree in Sharia or other law.
- Facilitating virtual hearings and electronic submissions.
These reforms reflect a commitment to enhancing the efficiency, flexibility and international compatibility of arbitration in the KSA, and mark a significant step forward in positioning the KSA as a modern seat for arbitration.
Singapore
SIAC Launches Restructuring and Insolvency Arbitration Protocol
On August 26, 2025, SIAC launched the Restructuring and Insolvency Arbitration Protocol (Protocol). Developed in consultation with judges, practitioners and the SIAC Court of Arbitration, the Protocol is the first of its kind among international arbitration institutions and is intended to provide a tailored framework for the efficient resolution by arbitration of restructuring and insolvency disputes.
The Protocol will apply to any dispute that the parties have agreed to submit to arbitration under the Protocol, either before or after a dispute has arisen. Notably, the Protocol provides that parties who adopt the Protocol waive objections to the arbitrability or scope of claims submitted under the Protocol, subject to statutory or public policy limitations.
Key features of the Protocol include:
- Truncated timelines. The Protocol shortens several timelines under the existing SIAC Rules with the goal of expediting proceedings. For example:
- The time for the respondent to file its response to the notice of arbitration is shortened from 14 days to seven days from the commencement of the arbitration, and the time for the parties to file any challenge to an arbitrator from 15 days to three days from receipt of the notice of appointment, or when the reasons for the challenge became (or should reasonably have been) known.
- While under the existing SIAC Rules the initial case management conference must be held “as soon as practicable” after the tribunal is constituted, the Protocol provides that the conference must be held within seven days of the tribunal’s constitution. The Protocol also states that the final award must be issued within six months from the tribunal’s constitution (unless otherwise agreed or extended by the SIAC Registrar).
- Sole arbitrator. The default position under the Protocol is that a sole arbitrator will be appointed unless the Registrar determines that the complexity of the dispute or other circumstances warrant the appointment of three arbitrators.
- Third-party stakeholders. Where one of the parties is undergoing a parallel restructuring or insolvency proceeding in a national court or before another adjudicative body, the Protocol recognizes that the outcome of the arbitration may be relevant to third-party stakeholders, such as other creditors, and accordingly lists several matters that the tribunal should endeavor to discuss with the parties at the first case management conference. These matters include the parties’ views on the joinder of any third party to the arbitration whose participation in the proceedings may be necessary.
- Balancing the need for transparency in insolvency matters and confidentiality of arbitration. The Protocol states that notwithstanding any provisions on confidentiality in the SIAC Rules, a party may request that (1) the tribunal provide a redacted copy of any decision, ruling, order or award, (2) it be permitted to disclose such redacted copy in any relevant insolvency proceedings; and (3) with the Tribunal’s leave, it be permitted to disclose the status and progress of any arbitration conducted under the Protocol in such proceedings.
South Korea
Commercial Arbitration Board Revises International Arbitration Rules
On January 1, 2026, the KCAB’s revised International Arbitration Rules (KCAB Rules) came into force.
Key amendments to the KCAB Rules include:
- Creation of the KCAB Court. The KCAB Court is an administrative body made up of leading arbitration practitioners with responsibility for key case-administrative functions, including appointment of arbitrators, deciding challenges to arbitrators, replacement and removal of arbitrators, joinder and consolidation.
- Fast-track procedures. The KCAB Rules include new fast-track procedures, which apply by default for claims below KRW 500,000,000 (approximately $350,0000). Under these procedures, the final award must be issued within three months of the tribunal’s constitution.
- Early determination. The KCAB Rules now include an express provision (Article 36) allowing parties to apply to the tribunal for the early determination of claims or defenses that are “manifestly unsustainable or without legal merit.”
- Technological innovations. Article 16 encourages parties and arbitrators to consider how technology may be used to “enhance the efficiency and reduce the environmental impact of the arbitration,” and encourages discussion of the responsible use of AI.
- Scrutiny process. Article 40 introduces a new award scrutiny process by the Secretary-General of the KCAB (and, where appropriate, the KCAB Court) to ensure consistency, quality, and enforceability of arbitral awards issued under the auspices of the KCAB.
United Arab Emirates
Court of Cassation Confirms Power of Arbitral Tribunals to Issue Interim Injunctions
In Case No. 657 of 2025, the Dubai Court of Cassation provided important clarification on the powers of arbitral tribunals seated in the UAE, confirming that arbitral tribunals have the power to order interim or precautionary measures, including anti-suit injunctions.
The case arose after the Dubai Court of Appeal annulled an interim award issued by an arbitral tribunal in an ongoing ICC arbitration seated in Dubai. The tribunal had prohibited the respondent from filing claims in other courts on issues covered by the arbitration agreement, but the Court of Appeal held that arbitration proceedings cannot override a party’s constitutional right to access the courts unless expressly permitted by law. The Court of Appeal also found that the anti-suit injunction did not constitute a valid interim or precautionary measure under UAE law.
On July 3, 2025, the Dubai Court of Cassation overturned the Court of Appeal’s decision. The Court of Cassation held that Article 21 of Federal Law No. 6 of 2018 expressly authorizes arbitral tribunals in UAE-seated arbitrations to grant interim or precautionary measures, and, further held that tribunals have the sole authority to amend or revoke any measures they have ordered. As a result, the Court of Cassation dismissed the application to annul the interim award for lack of jurisdiction.
This decision reinforces the autonomy of arbitral tribunals in the UAE and confirms their authority to issue a broad range of interim measures, including antisuit injunctions, in the course of arbitration proceedings.
DIFC Courts’ Jurisdiction to Grant Interim Remedies in Support of Foreign Arbitration Proceedings
On March 15, 2025, Dubai International Finance Centre (DIFC) Law No. 2 of 2025 (New Law) came into effect, superseding the previous DIFC law and updating the DIFC courts’ judicial framework. Article 15(4) of the New Law codifies the DIFC courts’ independent jurisdiction to grant interim relief — including worldwide freezing orders — in support of foreign litigation and arbitration, even where there is no connection to the DIFC, as established in Carmon v Cuenda, discussed in our April 2025 Update.
Recent case law has further clarified the scope of this jurisdiction. Following the introduction of the New Law, in Nadil v Nameer [2025] DIFC CFI (April 2025), the Court of First Instance refused an application for a UAE-wide freezing order on the basis that enforcement of foreign judgments required the existence of assets within the DIFC. However, the Court of Appeal overturned this decision, holding that there was a sufficiently arguable case for jurisdiction and that the DIFC courts have the power to grant such orders.
The courts subsequently affirmed this position in (1) Trafigura PTE LTD (2) Trafigura India PTV LTD v (1) Mr Prateek Gupta (2) Mrs Ginni Gupta [2025] DIFC CA 001 (September 2025), in which the Court of Appeal held that the New Law does not require a direct link to the DIFC for the issuance of freezing orders in support of foreign proceedings. The court emphasized that these powers are intended to prevent the frustration of the DIFC courts’ jurisdiction by debtors dissipating assets ahead of anticipated foreign judgments that may be recognized or enforced in the DIFC.
Most recently, the DIFC Digital Economy Court issued its first worldwide freezing order under Article 15(4) in Techteryx Ltd v Aria Commodities DMCC [2025] DIFC DEC 001 (October 2025). The court clarified that Article 15(4) does not confer a freestanding jurisdiction but operates as a matter of comity, ensuring that foreign judgments are not undermined by pre-emptive asset dissipation, consistent with the reasoning in Carmon.
These developments together reinforce the power of the DIFC courts to grant interim relief in support of foreign proceedings, providing greater certainty and support for parties seeking to protect assets in cross-border disputes.
United Kingdom
Parties Can Rely on Jurisdictional Objections Made Belatedly in the Arbitration if the Tribunal Addressed the Objections on the Merits
On May 7, 2025, the English Court of Appeal issued its decision in Czech Republic v Diag Human SE [2025] EWCA Civ 588, ruling that, by addressing a late jurisdictional objection on the merits in its award, a tribunal was considered to have allowed the jurisdictional objection to be raised belatedly.
Under Section 73 of the Arbitration Act 1996, a party can lose the right to raise an objection before the arbitral tribunal or the court if the party does not make that objection “forthwith or within such time as is allowed by the arbitration agreement or the tribunal.” Before Diag, there was some uncertainty about whether, under Section 73, a tribunal could be considered to have allowed a jurisdictional objection to be raised later than “forthwith” simply because it addressed the merits of the late jurisdictional objection in its award.
During the underlying arbitration in Diag, the respondent first made its jurisdictional objections in its rejoinder, three months before the hearing. The claimant did not make any timeliness objections, and the tribunal addressed the respondent’s jurisdictional objections but found against the respondent in its award.
The respondent challenged the award before the English courts on several grounds, including on the basis that the tribunal lacked substantive jurisdiction under Section 67 of the Arbitration Act 1996. In response, the claimant argued that the respondent had lost its right to raise jurisdictional objections because respondent raised them late in the arbitration.
The Court of Appeal rejected the claimant’s arguments, finding that the claimant’s failure to make a timeliness objection in the arbitration meant that it was precluded from doing so under Section 73(1)(c). The court also found that, because the tribunal had determined the respondent’s jurisdictional objections in its award, those objections had been made within “the time allowed by the tribunal.” Therefore, the respondent had not lost its right to object under Section 73.
In July 2025, the Commercial Court applied those principles in Tecnicas Reunidas Saudia for Services & Contracting Co Ltd v Petroleum Chemicals and Mining Co Ltd [2025] EWHC 1785 (Comm). That case involved a similar scenario to Diag: The respondent raised a jurisdictional objection belatedly in the arbitration, the claimant failed to raise a timeliness objection in the arbitration, and the tribunal subsequently addressed the respondent’s jurisdictional objection on the merits. The Commercial Court applied Diag and found that the respondent could raise its jurisdictional objection in subsequent challenge proceedings.
The key takeaways from these cases are that: (1) parties who have jurisdictional objections should raise them promptly before arbitral tribunals, and (2) parties facing late jurisdictional objections should raise a timeliness objection promptly in the arbitration.
Validity of Litigation Funding Agreements Entitling a Funder to a Multiple of Its Investment Rather Than a Percentage of Damages Upheld
On July 4, 2025, the English Court of Appeal ruled in Sony Interactive v Neill and Ors [2025] EWCA Civ 841, that litigation funding agreements (LFAs) allowing a funder to recover a multiple of its investment, rather than a percentage of damages, were valid.
In 2023, the U.K. Supreme Court ruled (in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28) that LFAs entitling funders to a percentage of the proceeds of the funded litigation were damages-based agreements (DBAs). This meant that such LFAs were required to comply with the U.K. regulations applicable to DBAs. Because many existing LFAs had not been drafted to comply with the U.K. regulations applicable to DBAs, the decision rendered many LFAs unenforceable.
Following that Supreme Court ruling, many funders revised their LFAs to entitle them to a multiple of their investment, rather than a percentage of damages, in order to avoid the need to comply with the applicable U.K. regulations. The Sony Interactive v Neill appeal concerned such an LFA. The Court of Appeal concluded that LFAs providing that the funder’s fee would be calculated as a multiple of its investment were valid, even if the fees were capped by reference to the level of proceeds recovered.
Following the PACCAR decision by the U.K. Supreme Court, the U.K. government announced in December 2025 that it would introduce legislation clarifying that LFAs are not DBAs (reversing the effect of PACCAR with respect to any future LFAs), and introduce proportionate regulation of LFAs.
United States
Second Circuit Affirms Lack of US Jurisdiction to Vacate Foreign Arbitral Awards
On July 2, 2025, in Molecular Dynamics, Ltd. v. Spectrum Dynamics Med. Ltd., No. 24-2209-cv, 143 F.4th 70 (2d Cir. July 2, 2025), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a petition to vacate arbitral awards rendered in Switzerland, holding that U.S. federal courts lack subject matter jurisdiction to vacate foreign arbitral awards under the New York Convention and its implementing legislation in the Federal Arbitration Act (FAA).
The dispute arose from a failed joint venture in medical imaging technology. Applying New York law, the Geneva-seated arbitration panel issued partial and final awards in favor of the respondents, granting monetary relief, declaratory relief, costs and attorneys’ fees. The petitioners sought to vacate both awards in the U.S. District Court for the Southern District of New York, relying on the forum selection clause contained in the parties’ license agreement, which vested exclusive jurisdiction over matters concerning the arbitration in the courts of New York. The district court dismissed the petition for lack of subject matter jurisdiction, concluding that only courts in the country where the award was made — in this case, Switzerland — could entertain vacatur proceedings under the New York Convention.
The Second Circuit affirmed the district court’s dismissal, albeit on different grounds. The circuit court held that Chapter 2 of the FAA, which implements the New York Convention and should be read together with it, grants federal courts jurisdiction over actions “falling under the Convention.” The convention, the court explained, is primarily concerned with the recognition and enforcement of arbitral awards, not vacatur. Petitioners-appellants could not rely on the convention to bring a vacatur action in a U.S. district court — here, a court of “secondary jurisdiction” — because the awards at issue were made in, and under, the arbitral law of Switzerland, the “primary jurisdiction.”
The court held that the convention’s silence on vacatur in secondary jurisdictions is a deliberate limitation, not a gap to be filled by contract or domestic law. The decision also clarifies that the presence of a U.S. forum selection clause alone — even one purporting to grant exclusive jurisdiction over “matters concerning the arbitration” — does not override the jurisdictional limitations imposed by the convention and the FAA. The Second Circuit expressly declined to decide whether parties to international arbitration could ever, consistent with the New York Convention, validly designate a non-seat forum expressly for vacatur proceedings.
Turnover of Ukrainian State-Owned Assets to Satisfy Arbitration Award Denied Based on International Comity and Martial Law Restrictions
In July 2025, a magistrate judge sitting in the U.S. District Court for the Southern District of Texas recommended denying, without prejudice, a motion by Carpatsky Petroleum Corporation that sought the turnover of funds from a Ukrainian bank account held by OJSC Ukrnafta to satisfy a U.S. judgment confirming a $150 million Swedish arbitral award. The Memorandum and Recommendation in OJSC Ukrnafta v. Carpatsy Petroleum Corp., 4:09-cv-00891 (S.D. Tex. July 14, 2025), relied on the extraordinary circumstances in Ukraine as a result of the Russia-Ukraine conflict, including martial law, state ownership of Ukrnafta and significant legal restrictions on cross-border transfers. Carpatsky withdrew its turnover motion, without prejudice to filing similar motions in the future, before the U.S. District Court for the Southern District of Texas could rule on it.
The underlying dispute stemmed from a development agreement between Ukrnafta, a Ukrainian oil and gas company, and Carpatsky, a U.S. petroleum corporation. A Stockholm-seated arbitral tribunal awarded $147 million in favor of Carpatsky. Ukrnafta sought to challenge the award in Sweden and Ukraine. The Swedish courts ultimately confirmed the award, and the Ukrainian courts refused to recognize it. After resolution of the foreign proceedings, the U.S. District Court for the Southern District of Texas confirmed the award in 2017, and the U.S. Court of Appeals for the Fifth Circuit affirmed in 2020.
Carpatsky then, in September 2024, successfully obtained orders from the magistrate judge in the district court to whom the case was referred requiring Ukrnafta to disclose information to aid in Carpatsky’s asset-tracing efforts. Carpatsky ultimately moved for an order directing Ukrnafta to turn over all funds that had been deposited into a Ukrainian bank account that Ukrnafta used to conduct international transactions. Ukrnafta opposed, citing the impact of Russia’s 2022 invasion, the imposition of martial law and the Ukrainian government’s subsequent nationalization of Ukrnafta as a critical infrastructure provider for the war effort.
The magistrate judge rejected Ukrnafta’s argument that the case presented a nonjusticiable political question, finding that the motion sought only to enforce a final judgment and did not require the court to question U.S. foreign policy decisions regarding aid to Ukraine. Ultimately, however, the magistrate judge agreed with Ukrnafta that international comity concerns were dispositive, finding credible evidence of a “true conflict” between U.S. and Ukrainian law: Ukrainian law, under martial law, prohibits the transfer of funds abroad without government approval, which was unlikely. The magistrate judge also credited evidence that Ukrnafta officials could face criminal prosecution for attempting to comply with a U.S. turnover order, given Ukrnafta’s status as a state-owned operator of critical infrastructure during wartime and Ukrnafta’s use of the targeted funds to purchase supplies for Ukrainian military units.
Balancing the traditional comity factors, the magistrate judge acknowledged the U.S. interest in enforcing its judgments, but found that the risk of inconsistent enforcement actions and potential criminal liability for Ukrnafta officials weighed heavily against granting the motion.
While it carries no precedential effect, the Memorandum and Recommendation highlights the role that international comity can play in the enforcement of arbitral awards against state-owned enterprises, particularly in the context of ongoing armed conflict and martial law.
Venezuela
Court-Approved Citgo Sale: Collection of Arbitral Awards Against Venezuela
For a number of years, various creditors have attempted to enforce arbitration awards against Venezuela in the U.S. In July 2023, the U.S. Court of Appeals for the Third Circuit, which hears appeals from the U.S. District Court for the District of Delaware, affirmed attempts by creditors to attach shares in PDV Holding, Inc., a U.S. subsidiary of state-owned Petróleos de Venezuela, S.A. (PDVSA), which, in turn, owns Citgo. OI European Group B.V. v. Bolivarian Republic of Venezuela, Petróleos de Venezuela, S.A. (3d Cir. 2023)). See our September 2023 article “Latin America Dispute Resolution Update – The Latest Developments in Cross-Border Disputes Involving the US and Latin America.”
This led to the judicial sale process of PDV Holding. In November 2025, in Crystallex International Corp. v. Bolivarian Republic of Venezuela (D. Del. 2025), the U.S. District Court for the District of Delaware approved a $5.89 billion bid from an affiliate of Elliott Investment Management to purchase shares of PDV Holding and stated that the proceeds would be used to satisfy the judgment of certain creditors of Venezuela and PDVSA. The decision has been appealed to the U.S. Court of Appeals for the Third Circuit.
— Associates Pierre-Baptiste Chipault (Paris), Sandip Bhuckory (London), Rafael Bittencourt (New York), Juliet Butcher (London), William Chandler (Washington, D.C.), Danuta Egle (New York), David Hu (London), Guillaume Huan (Paris), Max Novak (New York), Amanda Raymond-Kalantirsky (New York) and Paul E. Zschunke (Germany); registered foreign lawyers Liam Lambert (Hong Kong) and James Tennison (Hong Kong); international visiting professionals Tatiana Murta (New York) and Alejandra Prieto (New York); and intern Gaia Laurentia Zizi (Paris) contributed to this report.
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