Russia’s Lugovoy Law and the Battle for Jurisdiction
July 9, 2025
Sanctions have not only complicated the enforcement of contracts—they have also begun to affect the forums in which transnational disputes may be resolved. Russia’s so-called “Lugovoy Law” allows sanctioned parties to sue in Russian courts even when they have agreed to have their disputes decided elsewhere, and it is backed by threats of steep penalties.
Foreign courts have counter-punched with anti-suit (ASI), anti-anti-suit (AASI), and anti-enforcement (AEI) injunctions to safeguard their own jurisdiction. This post explores the first clashes in this fast-moving jurisdictional tug-of-war and their implications for cross-border litigants in matters affected by sanctions.
The Lugovoy Law
Enacted in June 2020, the so-called Lugovoy Law amended the Russian Arbitrazh (Commercial) Procedure Code to grant Russian courts exclusive jurisdiction over certain disputes involving sanctioned persons. Notably, this law allows a sanctioned Russian party to disregard a contractual forum selection clause and instead sue in Russia if the agreed foreign forum is deemed “unavailable” or “unenforceable” because sanctions impede the sanctioned party’s access to justice. Even ongoing foreign proceedings can be “repatriated” to Russia under this law.
The sanctioned party must show that sanctions created genuine obstacles to justice (e.g. inability to transfer funds for legal fees or to appoint arbitrators), though in practice Russian courts have interpreted this requirement broadly.
Crucially, the Lugovoy Law allows the Russian court to issue an ASI to stop the counterparty from proceeding in the foreign forum. Non-compliance with a Russian ASI can trigger substantial penalties — effectively damages in the amount at stake in the foreign case. Such fines are not theoretical: Russian courts have already issued such penalties in a few cases. Russia’s Constitutional Court recently rejected a constitutional challenge to the law.
The practical effect of the Lugovoy Law in international disputes is significant. It introduces an element of legal uncertainty and risk for anyone contracting with Russian parties. Even if an agreement contains a dispute resolution clause, a sanctioned Russian party can file suit in Russia and obtain an injunction to freeze the foreign case. In a recent decision dated 11 June 2025 (Case No. А40-232285/23-107-1782), the Russian court declined to stay proceedings in favor of Hong Kong courts, despite a contractual jurisdiction clause. Instead, it asserted exclusive jurisdiction over a claim brought by a Hong Kong company linked to a sanctioned Russian individual and ordered JP Morgan Chase to pay US$1 million in damages for blocking funds held in its Hong Kong branch.
The European Union responded in 2024 by banning European entities from participating in Lugovoy-based proceedings. EU courts are also prohibited from enforcing any judgment that is the result of a Lugovoy Law action.
The Lugovoy Law in U.S. Courts
U.S. courts have begun to encounter Lugovoy Law arguments. In Google LLC v. NAO Tsargrad Media, the District Court for the Northern District of California granted an ASI and an AEI to prevent enforcement of a Russian judgment obtained under the law in breach of a forum selection agreement.
As previously discussed at TLB, a Russian media company (Tsargrad), controlled by a sanctioned individual, sued Google in Russia after Google terminated its account to comply with U.S. sanctions. Tsargrad ignored an exclusive California forum selection clause in the agreement, arguing that Russia’s Lugovoy Law gave Russian courts exclusive jurisdiction. The Russian court accepted jurisdiction and ruled in Tsargrad’s favor, ordering Google to restore the account or face a compounding fine that grew to twenty decillion dollars. In response, Google turned to a U.S. federal court in California and obtained an AEI barring Tsargrad from seeking to enforce the Russian judgment anywhere outside of Russia. The court granted this extraordinary relief because: (1) U.S. public policy strongly favors enforcing forum selection clauses; (2) the Russian judgment was obtained through a procedure that undermined Google’s contractual rights; and (3) Tsargrad’s enforcement strategy was vexatious and oppressive.
The Lugovoy Law in English Courts
Google obtained an AEI against the same Russian judgment from the English High Court. English courts have also begun to address the implications of the Lugovoy Law in cases not involving forum selection clauses, a situation that U.S. courts appear not to have faced as yet.
In Magomedov & Ors v. PJSC Transneft & Ors, a Russian businessman, Ziyavudin Magomedov, sued Russia’s state-controlled pipeline company Transneft (among others) in England for an alleged conspiracy to strip him of assets. Transneft, a sanctioned Russian entity, responded by invoking the Lugovoy Law and sought an ASI from the Moscow Arbitrazh Court, aiming to block Magomedov’s U.K. lawsuit. The Russian court not only granted the ASI but also ordered that, if Magomedov and his affiliated company (Port-Petrovsk Ltd.) pursued the English case, they would face penalties up to the full amount of the claim.
Anticipating that its jurisdiction might be thwarted by the Russian order, the English court issued an AASI against Transneft. An AASI is, in effect, an injunction restraining a party from seeking or enforcing a foreign ASI. Here, the English AASI ordered Transneft not to pursue the Russian ASI and to adjourn the Russian proceedings pending the English court’s decision on its own jurisdiction. The English court also granted an AEI to prevent Transneft from enforcing the Russian orders and penalties against the claimants. The AASI and AEI were to last until the English court could hold a full hearing on whether Magomedov’s lawsuit belonged in England.
The stage was thus set for a transnational injunction duel: a Russian court order penalizing the claimants for suing in England, and an English court order barring the defendant from giving effect to that Russian order.
Jurisdictional Integrity in the Face of Foreign Anti-Suit Injunctions
In a prior case, the Court of Appeals of England and Wales held that the Lugovoy Law, as a piece of foreign public law, cannot automatically oust the court’s jurisdiction, which is governed by English law. In Magomedov, Transneft challenged the jurisdiction of English courts under English procedural law — arguing no jurisdictional gateway and forum non conveniens — not directly under the Lugovoy Law. Justice Bright did not treat the Russian law or court orders as binding, but he also did not dismiss them as irrelevant. Instead, he acknowledged the Russian court’s concern about access to justice as genuine. This suggests that an English judge, when considering forum non conveniens, might consider whether a Russian party truly cannot litigate abroad because of sanctions. Indeed, Transneft argued that point, citing its inability to pay its English legal team because of sanctions as evidence that England was an inconvenient forum.
However, the Lugovoy Law had no prohibitive effect on the English court. The English court was clear that it must be able to decide its own jurisdiction even in the face of the Lugovoy Law. Issuing the AASI was the mechanism to preserve that power. In the end, after fully considering the case, Justice Bright refused jurisdiction — but not because the Lugovoy Law compelled the court to do so. Rather, the court found that the claims were governed by foreign laws and concerned Russian corporate affairs, and that the English court lacked a jurisdictional gateway for the key claims.
There is an interesting irony here: the English court fought to maintain its ability to adjudicate, only to decide not to exercise jurisdiction after all. But that, fundamentally, is the point—the English court itself made the decision on whether to take jurisdiction, not the Russian legislature. The Court of Appeal subsequently found that an appeal would have no real prospect of success and refused permission to appeal.
“Natural Forum” Precondition
When a claimant asks an English court for an ASI absent an exclusive jurisdiction clause, the court requires the claimant to show that England is the natural forum for the dispute and that the foreign proceedings are vexatious or oppressive. This principle was established in other cases, stressing respect for foreign courts unless England has a clear interest in the matter. However, in Magomedov, the court recognized that the very purpose of the Russian ASI was to prevent the English court from ever determining whether England is the natural forum. Requiring the claimants to prove England as the natural forum at the interim stage would defeat the entire point, “put[ting] the cart before the horse.”
Thus, the judge held that in an appropriate case, the English Court must be able to grant an interim AASI, to last until it is able to decide on its own jurisdiction, without first conclusively deciding forum. In this way, the court carved out a narrow exception to the natural-forum precondition: when a foreign ASI is deployed to derail an English jurisdiction challenge, the English court can issue an AASI without a full natural-forum analysis, in order to preserve its ability to eventually make that analysis at the proper time. The court was careful to note this is not a blanket rule for all cases — AASIs are fact-specific and not necessarily appropriate in every case where an ASI is sought in a foreign court.
Comity and Sovereignty Considerations
The Magomedov saga highlights the delicate balance courts have to strike between protecting their judicial authority and respecting the sovereignty of other courts. ASIs have long been controversial for that reason. English courts have emphasized that such injunctions are exceptional remedies to be granted with great caution.
When the injunctions escalate to AASIs, the sovereignty conflict becomes even more stark. Each side’s court tries to shield its proceedings from the other’s interference. In Magomedov, from a Russian perspective, the Russian legislature and courts were simply asserting Russia’s sovereign right to adjudicate disputes involving its sanctioned companies. The English court, for its part, was asserting the right to decide its own jurisdiction, free from foreign interference.
In Magomedov, the court framed the AASI as a limited, interim measure tailored to avoid offense to comity. The injunction was calibrated to maintain the status quo until the jurisdiction hearing, not to permanently bar Russian proceedings. Indeed, the court acknowledged that the Russian court had legitimate concerns under the Lugovoy Law and noted that it was introduced with the intention of addressing a real juridical problem, namely that Russian parties sometimes cannot get access to justice because of the impact of sanctions. In other words, the English court did not characterize the Russian ASI as a bad-faith gambit; rather, both courts were acting defensively to protect their own notions of justice.
Similarly, U.S. judges are mindful that enjoining foreign proceedings or judgments is a sensitive step. They often recite that such injunctions issue only in exceptional cases. Courts consider the nature of the foreign action — whether it is a legitimate parallel proceeding or a tactical maneuver to preempt the U.S. court’s jurisdiction. They also assess whether the foreign forum was agreed upon by the parties or unilaterally chosen. In sum, U.S. courts respect for foreign sovereignty, but they also assert that comity is a two-way street — foreign courts should likewise respect valid forum clauses and the jurisdiction of U.S. courts when chosen by the parties.
Conclusion
Courts have begun to confront the challenges posed by the Lugovoy Law that seeks to dictate jurisdiction in cases involving sanctions. No U.S. court has yet upheld Russian courts’ exclusive jurisdiction based on the Lugovoy Law or sanctions. The English court’s grant of an AASI in Magomedov offers significant reassurance for claimants who might otherwise be left defenseless against the Lugovoy Law. It signals that English courts (and arguably U.S. courts when the issue arises) will not simply wash their hands of a dispute because a foreign law purports to claim exclusive jurisdiction. If there is an arguable case to be heard in London (or New York) —courts will take steps to ensure they, not a foreign court, decide whether the case can proceed.
As sanctions and geopolitical tensions persist, Russian parties may increasingly attempt to invoke the Lugovoy Law. The early case law suggests, however, that U.S. and U.K. courts are unlikely to defer to such unilateral foreign jurisdictional claims when they undermine contractual expectations or jurisdictional interests. Instead, courts will likely continue to apply forum selection clauses and refuse to recognize foreign judgments that contravene principles of equity and public policy.