Author
Assoc Prof Aleksandr Molotnikov
Organisation/Institution
Lomonosov Moscow State University
Country
RUSSIA
Panel
International Arbitration and Dispute Resolution
Title
Asian Arbitration Practice for Russian Businesses: Legal Protection and Strategic Transition
Abstract
Abstract This paper examines the accelerating migration of Russia-related commercial and investment disputes toward Asian arbitration centres, particularly SIAC, HKIAC, CIETAC, and JCAA, in response to sanctions, geopolitical fragmentation, and the growing politicisation of Western dispute-resolution forums. Asian jurisdictions increasingly provide the combination of procedural neutrality, absence of unilateral sanctions, enforceability, and high-quality judicial oversight that Russian businesses can no longer consistently expect in Europe. The analysis is illustrated through two contemporary case studies: the Singapore Court of Appeal's 2025 judgment in Power Machines v PetroVietnam, a landmark articulation of the fair-hearing principle; and Fridman v Luxembourg, a 2024 UNCITRAL-based investment treaty arbitration administered ad hoc through HKIAC, examining whether EU sanctions constitute indirect expropriation. Together, these cases demonstrate the emergence of a polycentric Eurasian dispute-resolution order in which Asian arbitration institutions play a central structural role. 1. Introduction Arbitration practice in Eurasia is undergoing a systemic transformation. Russian businesses historically relied on European arbitral venues such as the LCIA, SCC, and ICC, but the post-2022 sanctions landscape has rendered these institutions less accessible or unavailable. Western courts and arbitral centres are now subject to mandatory sanctions screening, restrictions on counsel appointments, refusal of payments, and institutional risk aversion. Asian arbitration institutions, by contrast, maintain non-alignment with unilateral sanctions, preserving open procedural access for Russian parties. Courts continue to apply the UNCITRAL Model Law and New York Convention autonomously. This shift reflects a deeper realignment of commercial dispute resolution along new Eurasian economic corridors. 2. Legal Architecture and Access to Justice Russia's arbitration reforms (2020-2024) affirmed the domestic status of institutions such as SIAC and HKIAC. Asian institutions expanded digital case management, remote hearings, multilingual proceedings, and rules for complex disputes. Russian companies increasingly use cascade arbitration clauses listing alternative Asian venues that can be activated depending on sanctions or payment risks. 3. Institutional Neutrality and Protection Mechanisms Asian arbitration centres offer: neutrality regarding sanctions sophisticated courts applying the Model Law safe financial channels visa accessibility arbitrators from non-sanctioning jurisdictions 4. Case Illustrations 4.1 Power Machines v PetroVietnam (Singapore Court of Appeal, 2025) A SIAC arbitration arose from an EPC contract for the Long Phu Thermal Power Plant. The tribunal awarded Power Machines approx. USD 570 million in 2023. PetroVietnam sought to set aside the award, alleging breach of natural justice. The Court of Appeal partially set aside the award due to a violation of the fair-hearing rule, as the tribunal adopted an interpretation not advanced by the parties. The Court refused remission under Article 34(4) of the Model Law. 4.2 Fridman v Luxembourg (UNCITRAL ad hoc through HKIAC, 2024-) In 2024 Mikhail Fridman initiated a USD 16 billion arbitration against Luxembourg, arguing that EU sanctions constituted indirect expropriation under the 1989 Belgium-Luxembourg-USSR Investment Treaty. Hong Kong was chosen as the seat due to neutral sanctions policy, visa-free entry, counsel availability, and the ability to make payments through Chinese banks. 5. Comparative and Strategic Outlook Asian arbitration has become the default for Russia-related disputes, offering enforceability under the New York Convention, geopolitical neutrality, and judicial fairness. The Belt and Road Initiative reinforces this trend. 6. Conclusion The Power Machines and Fridman cases confirm a structural shift: Asian institutions are now the most reliable venues for resolving Russian commercial and investment disputes. Bibliography Agreement on the Reciprocal Promotion and Protection of Investments (Belgium-Luxembourg-USSR, 1989). Luxembourg Times, "Luxembourg acknowledges receipt of Fridman arbitration notice" (August 2024). Reuters, "Russian tycoon files USD 16bn arbitration over asset freeze" (14 August 2024). Singapore Court of Appeal, Vietnam Oil and Gas Group v Joint Stock Company Power Machines [2025] SGCA 50. SIAC, Final Award in Power Machines v PetroVietnam (2023). Footnotes Singapore Court of Appeal, Vietnam Oil and Gas Group v Joint Stock Company Power Machines [2025] SGCA 50 paras 548-555. Ibid paras 603-612. Investment Treaty (Belgium-Luxembourg-USSR, 1989) art 10. Luxembourg Times (August 2024).
Biography
Alexander Molotnikov is an Associate Professor of Business Law at the Law Faculty of Lomonosov Moscow State University, where he also serves as Executive Director of the Scientific-Educational Center “Law and Business” and Executive Manager of the Centre for Asian Legal Studies. He holds a PhD in civil, business, family and private international law (MSU, 2006), and has been professionally active since 1999. His international academic experience includes appointments as Academic Visitor at the Institute of European and Comparative Law, University of Oxford (2017), and Visiting Fellow at the Centre for Business Research, Judge Business School, University of Cambridge (2020). He has acted as an expert in proceedings before Russian arbitrazh courts and foreign courts including the Cyprus Court, Australian Federal Court, and the High Court of Justice (London), and serves as arbitrator at the Russian Arbitration Centre as well as the Langfang and Harbin Arbitration Commissions in China. Molotnikov is a member of leading international professional associations such as the International Academy of Commercial and Consumer Law, the European Corporate Governance Institute, the Inter-Pacific Bar Association, and the Russia–Japan Lawyers Council. He has held multiple advisory positions, including membership in the Public Council of the Russian Federal Customs Service and the Scientific Advisory Board of the Court of Intellectual Property Rights. His research focuses on business and corporate law, financial markets, M&A, venture investment, intellectual property, law and new technologies, and Asian legal systems. He is the author and editor of numerous books, textbooks and casebooks on corporate and business law.
