Introduction
In a decision dated 25 September 2026, the Arbitrazh Court of the North-Western District in case number A56-49741/2026 rendered a judgment on an application to restrain NET4GAS s.r.o. from continuing arbitration in the Czech Republic under Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code.
The court dismissed NET4GAS’s cassation appeal and upheld the order of the Arbitrazh Court of Saint Petersburg and the Leningrad Region dated 19 June 2026. That order prohibited NET4GAS from continuing Czech arbitration No. Rsp:430/25 and imposed monetary consequences, equal to the amounts claimed in the arbitration, if the prohibition was not obeyed.
NET4GAS was the claimant in the Czech arbitration. Gazprom Export LLC and PJSC Gazprom were the applicants in the Russian proceedings and the parties whose access to justice in the Czech Republic was said to be restricted.
Factual Background
The dispute arose from a long-term gas transportation relationship. The judgment records three agreements between Gazprom Export, the Russian Federation and NET4GAS:
- a contract dated 1 November 1999 for the transportation of Russian natural gas through the Czech Republic to Western European countries;
- a General Gas Transportation Agreement dated 29 January 2013; and
- Gas Transportation Services Agreement No. 1 dated 24 March 2017.
Under the General Agreement, NET4GAS, as transporter, was to receive gas from or deliver gas to Gazprom Export at agreed entry or exit points in the transportation system. Gazprom Export, as customer, was to deliver or accept the agreed quantities and pay the agreed transportation charge.
The judgment reproduced the substance of Article VII(5) of the General Agreement. In an unofficial English translation from the Russian text of the decision, it provided:
“All disputes between the transporter and the customer arising from or in connection with the gas transportation contract, which do not fall within the jurisdiction of the Energy Regulatory Office under Act No. 458/2000 (the Energy Act), shall be resolved by three arbitrators of the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic in accordance with its statutes and rules.”
On 25 December 2025, NET4GAS commenced arbitration before that institution. It sought EUR 57,919,678.18 jointly and severally from Gazprom Export and Gazprom, together with a further EUR 60,789,479.36 from Gazprom. According to the judgment, the claims concerned transportation capacity that had been reserved but not used. The arbitration was registered as No. Rsp:430/25.
Gazprom Export and Gazprom then applied to the Arbitrazh Court of Saint Petersburg and the Leningrad Region. They argued that foreign restrictive measures made the parties’ Czech arbitration agreement inoperative because those measures obstructed their access to justice. They requested an order preventing NET4GAS from continuing the arbitration and monetary relief in the event of non-compliance.
The first-instance court granted the application in full on 19 June 2026. NET4GAS filed a cassation appeal with the Arbitrazh Court of the North-Western District.
The Parties’ Arguments on Appeal
NET4GAS argued that the first-instance court had applied substantive law incorrectly, violated procedural law, and made findings inconsistent with the facts and evidence. It asked the cassation court to set aside the order and terminate the Russian proceedings.
Its jurisdictional argument rested on the arbitration agreement and the 1958 New York Convention. NET4GAS submitted that the Russian court lacked competence because Gazprom Export and NET4GAS had agreed to arbitrate disputes before the Czech institution. In its view, the first-instance court was required to recognise that agreement under the Convention and had misapplied Articles 248.1 and 248.2 of the Russian Arbitrazh Procedure Code.
NET4GAS also disputed that the Russian applicants faced a real restriction on access to justice. It argued that Gazprom Export and Gazprom were not included in European Union sanctions lists, were not barred from entering the Schengen area, and remained able to instruct foreign representatives for proceedings in the European Union, including in the Czech Republic.
NET4GAS further relied on a mechanism under Czech law. It submitted that a person refused legal assistance by more than two lawyers could ask the Czech Bar Association to appoint counsel. In its submission, this provided an available route to representation.
Finally, NET4GAS challenged the monetary consequences attached to the injunction. It argued that the first-instance court had selected the amounts arbitrarily and had not examined whether they were fair and proportionate.
Gazprom Export and Gazprom opposed the appeal and asked the cassation court to leave the first-instance order unchanged.
Legal Considerations
The cassation court began with Article 247(2) of the Russian Arbitrazh Procedure Code, under which Russian arbitrazh courts hear economic disputes involving foreign persons where Articles 248 and 248.1 place the matter within their exclusive competence.
Under Article 248.2, a Russian legal entity affected by restrictive measures imposed by a foreign state, state association, union or institution may apply to the Russian court at its place of establishment for an order prohibiting the initiation or continuation of proceedings before a foreign court or international commercial arbitral tribunal outside Russia. The application must state the circumstances said to establish the exclusive competence of the Russian courts.
Article 248.1(4) extends that exclusive competence to disputes involving a person affected by foreign restrictive measures where an arbitration agreement cannot be performed because the measures create obstacles to that person’s access to justice.
The cassation court referred to Russian Supreme Court decisions of 9 December 2021, No. 309-ES21-6955(1-3), and 4 July 2023, No. 307-ES23-4890. It stated that, under that case law, the affected party does not have to prove how the restrictive measures specifically impaired performance of the arbitration agreement. The existence of restrictive measures against a Russian party participating in foreign arbitration is treated as sufficient to infer restricted access to justice and to create justified doubts that proceedings in a state applying such measures will satisfy guarantees of a fair hearing, including tribunal impartiality.
The court also relied on the Russian Government’s Order No. 430-r of 5 March 2022, which lists European Union Member States, including the Czech Republic, as states and territories taking “unfriendly actions” against the Russian Federation and Russian persons. It agreed with the first-instance court that, under the restrictive measures then in force, Gazprom Export and Gazprom could not fully exercise their procedural rights or protect their economic interests in the Czech Republic. On that reasoning, their rights could presently be protected only within Russian territory and jurisdiction.
Why the Court Found Access to Justice in the Czech Republic Restricted
The court’s analysis focused on practical access to qualified legal assistance, freedom to choose counsel, and the wider conduct of European service providers.
First, the court referred to Article 5n of Council Regulation (EU) No. 833/2014. As the judgment described it, this provision prohibited EU lawyers and law firms from providing certain legal services to Russian persons. The decision mentioned notarial services, legal advice on commercial transactions and the application or interpretation of law, participation in transactions and negotiations, and the drafting, preparation and review of legal documents.
Second, the court noted public statements by leading European law firms that they would no longer work with Russian counterparties. It regarded refusals by firms in European jurisdictions to act for Russian legal entities as an obstacle to a fair process in the Czech Republic. Without qualified legal assistance, it held, Gazprom Export and Gazprom could not properly exercise their procedural rights in Czech proceedings or in any later challenge to an arbitral award.
Third, the court rejected the argument that appointment through the Czech Bar Association cured the problem. It treated NET4GAS’s reliance on that mechanism as confirming unequal treatment: Gazprom Export and Gazprom would first have to obtain refusals from more than two lawyers and then seek appointed counsel, while NET4GAS remained free to select its own legal advisers for the arbitration. The court therefore viewed the issue not merely as whether some lawyer could ultimately be appointed, but whether both sides had an equal ability to choose their legal team.
Fourth, the court relied on what it called “over-compliance” in jurisdictions considered unfriendly by Russia. It described businesses as adopting internal policies to avoid dealings with Russian persons for risk-management or reputational reasons, including refusing transactions or payments even when they were not prohibited by sanctions. The court treated that broader commercial caution as a further practical constraint on the Russian applicants’ ability to participate fully in proceedings abroad.
The court did not accept NET4GAS’s points that the applicants were absent from EU sanctions lists, could enter the Schengen area, and could in principle use foreign representatives. Applying the presumption derived from the cited Russian Supreme Court case law, it considered the combination of the EU legal-services restrictions, refusals by European firms, restricted choice of counsel, and over-compliance sufficient to uphold the finding that access to justice in the Czech Republic was limited.
Monetary Consequences for Non-Compliance
Article 248.2(10) permits a Russian arbitrazh court to order payment if the restrained party fails to comply with an injunction against foreign litigation or arbitration. The court must apply principles of fairness and proportionality and prevent a party from benefiting from unlawful or bad-faith conduct. The amount may not exceed the claims made in the foreign proceedings together with the affected party’s legal costs.
The first-instance court ordered that, if NET4GAS continued the Czech arbitration contrary to the injunction, it would have to pay the ruble equivalent of EUR 57,919,678.18 jointly to Gazprom Export and Gazprom, and the ruble equivalent of EUR 60,789,479.36 to Gazprom, calculated at the Central Bank of Russia exchange rate on the payment date.
The cassation court held that these amounts did not exceed the limits in Article 248.2(10). It rejected NET4GAS’s challenge to their fairness and proportionality, observing that the arguments raised on appeal had already been examined and properly rejected by the first-instance court.
Outcome
The Arbitrazh Court of the North-Western District found no error of law and no procedural violation warranting reversal. It left the order of 19 June 2026 unchanged and dismissed NET4GAS’s cassation appeal. The prohibition on continuing Czech arbitration No. Rsp:430/25, together with the monetary consequences for non-compliance, therefore remained in place.
Related kdb.legal Coverage
The interaction between Russian injunctions under Articles 248.1 and 248.2 and foreign arbitral proceedings is also discussed in Clash of jurisdictions – AIFC Court recognises an ICC award despite opposing Russian anti-arbitration injunction. That article concerns separate Naftogaz-Gazprom proceedings and a Russian court’s treatment of sanctions as obstacles to access to justice; it does not concern the NET4GAS arbitration addressed here.
