High Court Dismisses Public Policy Challenge to €214m LCIA Arbitration Award in OWH SE v RTI and Rusal
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TL;DR
- High Court upholds enforcement of €214 million LCIA arbitration award against RTI and Rusal.
- Rusal's public policy challenge based on Jersey sanctions law rejected.
- Request to adjourn enforcement pending BIT arbitration and Privy Council appeal denied.
- Underlying dispute involved currency swap transactions affected by sanctions after Russia's 2022 invasion of Ukraine.
Overview
The High Court has dismissed Rusal's application to set aside permission to enforce a €214 million London Court of International Arbitration (LCIA) award in favor of OWH SE, a German credit institution formerly known as VTB Bank (Europe) SE. The judgment, handed down by Mrs Justice Dias on 1 May 2026, also denied an adjournment request tied to a pending BIT arbitration and proposed Privy Council appeal. The dispute centers on a series of hedging transactions affected by sanctions following Russia's invasion of Ukraine.
What Happened
The arbitration arose from currency swap contracts documented under an ISDA Master Agreement and governed by English law. After VTB Russia (OWH's parent) was sanctioned by the UK, Jersey, and Gibraltar following the February 2022 invasion of Ukraine, RTI (a Rusal group company) refused to pay margin calls, arguing such payments might indirectly benefit the sanctioned entity.
OWH declared an Event of Default and terminated the contract, leading to a claimed liability of approximately €214 million. The arbitral tribunal sided with OWH, concluding RTI was estopped from disputing valid service and could not rely on illegality defenses not timely raised.
Rusal challenged the enforcement in the English courts, arguing, among other points, that Jersey's sanctions law (Article 46A) provided immunity from enforcement as a matter of English public policy. Mrs Justice Dias found that, even assuming some merit to Rusal's legal arguments, the public policy exception was not triggered: the regime offered a potential defense but did not outright prohibit payment, the issue was not argued before the tribunal, and Rusal could not take advantage of Jersey's rules as a non-Jersey entity.
The court further refused Rusal's requests for an adjournment based on a recently filed BIT arbitration against OWH and Germany, determining the BIT claim lacked persuasive grounds and would introduce unjustified delay.
Context
Rusal's enforcement challenge follows multiple failed attempts since the arbitral award was issued in September 2024. The enforcement action relates to margin call liabilities under financial contracts impacted by rapidly shifting sanctions regimes. Rusal's arguments referenced international and domestic legal changes and recent jurisprudence, including a UK Supreme Court decision on the interpretation of sanctions legislation.
The reported BIT arbitration, brought by Rusal against both OWH and the German state, alleges unjust enrichment and conspiracy linked to financial regulatory (BaFin) actions during the ring-fencing of VTB Russia's assets.
Why It Matters
- The judgment reaffirms the English court's approach to arbitration enforcement in the context of sanctions, clarifying that optional statutory defenses do not, without additional factors, block enforcement as a matter of public policy.
- It confirms that issues not raised before arbitral tribunals may still be raised in enforcement proceedings but will be weighed accordingly.
- The outcome further demonstrates judicial reluctance to delay enforcement based on speculative or parallel proceedings, such as newly commenced BIT arbitrations.