Introduction
In a decision dated 7 September 2026, the Arbitrazh Court of the Moscow Region (АС Московской области) in case number А41-31041/2026 rendered a judgment on whether a Russian buyer could sue in Russia for the return of an advance payment under international supply contracts, notwithstanding foreign court/arbitration clauses, where sanctions allegedly hinder access to justice abroad.
The court accepted jurisdiction under Article 248.1 of the Russian Arbitrazh Procedure Code (APC) and ordered recovery of EUR 2,830,319 paid as an advance for electronic modules that were never delivered after the Swiss seller suspended cooperation with Russian clients.
Facts
The claimant, OOO “Tavrida SVK” (a Russian company), sued AKA Powertrade AG in Liquidation (a Swiss company) seeking EUR 2,830,319.
The dispute arose from three supply contracts for electronic modules:
- Contract No. 20211215 dated 15 December 2021
- Contract No. 20211223-1 dated 23 December 2021
- Contract No. 20211223-2 dated 23 December 2021
Under Specification No. 1 to each contract, delivery deadlines were set as follows:
- Contract 20211215: delivery by 30 June 2022
- Contract 20211223-2: delivery by 30 September 2022
- Contract 20211223-1: delivery by 30 September 2022
The payment mechanism in the specifications was described by the court as:
- “50% prepayment is made no later than 04.01.2022;
- final payment is made within 30 calendar days after delivery of the goods.”
The claimant paid the seller EUR 2,830,319 in prepayments to the defendant’s account, broken down as:
- EUR 2,364,165 (payment order No. 5 dated 22.12.2021) under contract 20211215
- EUR 140,000 (payment order No. 6 dated 27.12.2021) under contract 20211223-2
- EUR 326,154 (payment order No. 7 dated 28.12.2021) under contract 20211223-1
The defendant did not deliver within the contractual time limits and did not return the prepayments. The court noted that on 28 February 2022 the defendant sent a letter to the claimant suspending cooperation with Russian clients, including performance of the contracts, referring to EU/US sanctions affecting supplies of electronic components to Russia.
By 29 September 2025, the claimant stated it had lost interest in performance due to the prolonged non-delivery and issued a notice of refusal/termination and a demand for return of the “unutilised advance” within seven days after delivery of the notice.
The court recorded service steps:
- Notice emailed 2 October 2025 (delivered and read the same day), and also sent by EMS on 3 October 2025, received by the defendant on 17 October 2025.
- A pre-trial demand (claim) was sent by EMS and received on 13 November 2025, and also emailed on 5 November 2025.
The defendant did not appear in the hearing but was found duly notified; the court proceeded in its absence under Russian procedural rules.
Legal considerations
Jurisdiction: Article 248.1 APC and sanctions-related barriers
A central feature of the decision is the court’s reliance on Article 248.1 APC, a Russian mechanism that can give Russian arbitrazh courts exclusive jurisdiction where a foreign forum clause is “unenforceable” because restrictive measures (sanctions) against a party create obstacles to access to justice abroad.
The contracts contained foreign dispute resolution clauses:
- For contract No. 20211215, disputes were to be referred to the International Arbitral Centre of the Austrian Federal Economic Chamber (VIAC) in Vienna, and “recourse to state authorities is excluded” (as quoted by the court from clause 9.1.2).
- For contracts No. 20211223-1 and No. 20211223-2, disputes were to be heard by a civil court at the defendant’s seat (i.e., Swiss state courts).
The court held that these clauses were agreed before sanctions escalated (December 2021) and that, as a result of later restrictive measures, access to justice in Switzerland/Austria became objectively difficult for the Russian claimant.
In support, the court cited:
- The Supreme Court’s approach that Article 248.1 APC is designed to ensure judicial protection not only when foreign litigation is impossible, but also when it becomes “significantly difficult” (the decision references a Supreme Court ruling dated 28.11.2024 No. 305-ЭС24-13398).
- The Supreme Court’s 2023 practice review indicating that the very fact of restrictive measures against a Russian person is presumed sufficient to infer impediments to access to justice abroad (the decision refers to Review No. 3 (2023) and related Supreme Court case law).
The court treated Switzerland and Austria as “unfriendly” states for Russian law purposes, noting their alignment with EU sanctions, and reasoned that sanctions create practical obstacles including:
- Payment obstacles (banking restrictions, SWIFT-related limits) affecting the ability to pay arbitration fees and associated costs administered in the EU (VIAC).
- Restrictions on legal services (the decision refers to EU measures including restrictions on providing legal consultancy services to Russian entities).
- Travel and visa-related barriers to physical participation.
- The risk that payments and procedural steps could be blocked or require authorisations.
The court also cited a VIAC “note on sanctions” (referenced as published on VIAC’s website) as confirmation that sanctioned parties may face difficulties making/receiving payments and that approvals by competent authorities cannot be guaranteed.
On that basis, the Arbitrazh Court of the Moscow Region concluded it had competence to hear the dispute, and that the claim was properly filed in the claimant’s home region (Moscow Region) under Article 248.1 APC.
Governing law and public policy reasoning (as stated by the court)
The court set out the governing-law language for contract No. 20211215 (clause 9.3), stating that disputes would be governed by:
- the contract terms;
- in matters not covered, the UN Convention on Contracts for the International Sale of Goods (CISG, Vienna 1980); and
- in matters not covered, the substantive law of the seat of arbitration (the decision describes this as “material law of Russia or Austria”).
For the other two contracts, the court noted a “law of the court at defendant’s seat” approach (Swiss law).
However, the court stated that Swiss and Austrian law should not be applied in this Russian proceeding, reasoning that the contractual agreement to apply those laws was invalid under Article 168(2) of the Russian Civil Code as contrary to Russian public policy, and inconsistent with Russia’s legislative approach to “unfriendly” states and sanctions (the decision references Federal Law No. 127-FZ (04.06.2018) and a Constitutional Court position that rights conditioned on following foreign sanctions regimes are not judicially protectable in Russia).
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Merits: non-delivery, termination, and return of advance
On the merits, the court accepted that:
- The claimant paid the advance amounts.
- The defendant failed to deliver within agreed deadlines.
- The defendant expressly suspended cooperation with Russian clients in February 2022, referencing sanctions.
- The claimant validly sent a notice terminating/refusing performance and demanded return of the unutilised advance; the defendant did not refund after the deadline indicated in the notice and after a subsequent pre-trial demand.
The court therefore found the claim for recovery of the EUR 2,830,319 advance payment to be supported by the evidence and granted it (as reflected in the operative description that the case was brought “о взыскании 2 830 319 евро” and the court’s conclusion that the statement of claim was subject to satisfaction).
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