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  • Azerbaijan Arbitration Days 2025 And The Baku Arbitration Centre Inauguration

    Azerbaijan Arbitration Days 2025 And The Baku Arbitration Centre Inauguration

    A strong sense of motion defines modern Azerbaijan. Known as the land of fire and ice, the country is enjoying stability in terms of commerce and the rule of law. Nowhere does progress echo more loudly than in Baku, where old stone meets glass, and aspiration is as bright as the Flame Towers at dusk.

    The inauguration of the Baku Arbitration Centre (BAC) was neatly folded into the wider spectacle of the Azerbaijan Arbitration Days 2025. This was not simply a regional conference. To myself and Waleed, it signalled a significant shift: from hydrocarbons to commercial hubs, from handshake deals to robust legal rules written for an international age.

    Our observations were that neutrality, transparency, and fairness run through the BAC. This shows in the new rules, the leadership, and the inclusive bilingual approach. Chief Justice Karimov and Justice Minister Ahmadov delivered the centrepiece speech in excellent English, reflecting Azerbaijan’s readiness to engage in international trade and commerce. The BAC opens the door to locally resolved, internationally respected commercial disputes.

    Inclusion and accessibility matter. BAC’s publications and training initiatives support a new generation of lawyers keen to shape the future of Eurasian law.

    What are Azerbaijan’s primary industries?

    This land has always traded in contrasts. In the twenty-first century, energy stands at the centre, with oil and gas bankrolling infrastructure and social change. GDP is climbing steadily. Foreign investment follows suit, turbocharged by pipeline deals and new gas fields that stretch Azerbaijan’s reach as far as Israel.

    In addition, progress on the Zangezur Corridor is moving swiftly. Speaking at the 7th Consultative Meeting of Central Asian Heads of State in Tashkent, President Aliyev stated:

    “The construction of the Zangezur Corridor on the territory of Azerbaijan is nearing completion. With an initial throughput capacity of 15 million tons, this railway will become an important artery of the Middle Corridor,” he said, adding the highway that will form part of the multi-modal corridor is also close to finalization.”

    Everything in Baku whispers of progress while retaining a sense of history; the old city walls and the sweep of modern boulevards bear this out.

    Arbitration Days 2025

    The BAC’s debut attracted over 600 delegates, including judges, lawyers, policymakers, and business chiefs, from seventy countries. Just shy of 100 speakers covered everything from procedural reform to digital transformation in dispute resolution.

    Outside the formal stage, events hosted by the Turkic Arbitration Association reminded guests of the region’s spirit for partnership.

    Looking towards the future

    The BAC’s launch rests on the shoulders of reforming judges and a business community eager for regional solutions. Clarity and predictability in dispute resolution attract investment and secure growth.

    Arbitration Days 2026 promises an even broader canvas, drawing in legal minds from across Europe, Central Asia, and the Middle East. For any lawyer or business with an eye on the Caucasus, it’s a date for the diary.

    Concluding comments

    Azerbaijan has written a new chapter in law and commerce. The BAC stands as a work in progress and a promise, an institution invested in fairness, clarity, and progress. As dialogue with neighbouring states edges toward peace and as infrastructure projects tie the region ever closer, the rule of law becomes increasingly important. If business, trust, and cooperation matter, Baku seems ready to set the terms.

    FAQs

    What is the Baku Arbitration Centre?

    A specialist institution for commercial arbitration, designed to meet international standards and offer solutions to businesses in Azerbaijan and beyond.

    What made Arbitration Days 2025 stand out?

    An impressive roster: speakers from nearly 100 countries, a government-backed launch, and a genuine sense that Azerbaijan is open for global business.

    Why does the Middle Corridor matter?

    It places Azerbaijan at the centre of trans-Eurasian trade, making efficient legal solutions crucial for investment and growth.

    How does arbitration in Baku help business?

    It brings speed, neutrality, and local expertise to the table, qualities that investors and trading partners seek.

    Will BAC handle cross-border cases?

    Absolutely. International and regional disputes alike are at the heart of its mission.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    This article does not constitute legal advice. For further information, please contact our London office.

  • Countering Russian Trade Sanctions Evasion: OTSI Guidance for the Freight and Shipping Industry

    Countering Russian Trade Sanctions Evasion: OTSI Guidance for the Freight and Shipping Industry

    Background

    Following Russia’s invasion of Ukraine in February of 2022, the UK has implemented an extensive regime of sanctions and export controls, restricting Russia’s access to goods required to sustain its military operation. In response, Russia has taken increasingly complex steps in an effort to evade sanctions by the UK and its partners.

    Under Regulation 55 of The Russia (Sanctions)(EU Exit) Regulations 2019, knowing participation in direct or indirect circumvention of the UK’s prohibitions is a criminal offence.

    Given the UK’s extensive financial footprint and involvement in global supply chains, the shipping and freight industry is particularly vulnerable. The Guidance is therefore addressed to “freight forwarders, carriers, hauliers, customs intermediaries, postal and express operators, and other companies facilitating the movement of goods.”

    Means of Circumvention

    The Guidance highlights a number of such complex means of evasion potentially being employed. Key modes of circumvention identified by the Guidance include:

    • Third countries: shipments to neighbouring third countries may facilitate Russia’s access to sanctioned goods. Additional due diligence should be employed particularly where the destination country borders Russia, and has not imposed sanctions against them. The use of unreasonably complex shipping routes, or the avoidance of established ports is another potential indicator.
    • Use of Shell Companies: Procurement entities may attempt to use a shell company as a purchasing front for sanctioned goods. Companies should therefore be wary of unusual customers, transactions that inexplicably involve multiple parties based in third countries, and unsolicited approaches to ship goods from the UK. Financial inconsistencies such as dubious modes of payment should also be investigated.
    • Deceptive labelling and side-stepping customs: concealing the consignment may be a means of attempting to evade sanctions. This may be done through false or incomplete descriptions of goods, or shipping parts of a product in smaller quantities that fall under export control limits. Businesses should be wary of unusual or inconsistent shipment quantities and vague descriptions.

    Steps Advised for Compliance

    Businesses within the industry are expected to take pro-active measures to combat attempts to evade sanctions. A holistic assessment of each transaction should be conducted, which can include the following:

    • Due diligence: businesses are advised to conduct enhanced due-diligence of consignments, customers, and transactions where indicators of evasion are found. This involves pre-screening of customers, screening consignments and accompanying paper work, and conducting regular checks even with established trading partners. While any one of the above warning signs is not concrete evidence of circumvention, the Guidance sets out the expectation of independent research and prompt steps to address a sanctions risk.
    • Policy revisions to mitigate risk: Postal and express deliveries are advised to publish a ‘sanctioned goods policy’. Businesses across the shipping and freight sector would benefit from adding sanction-specific clauses to the terms and conditions, and any contracts of carriage.   
    • Supply chain investigation: shipping and freight businesses should clarify the role and involvement of suspicious third-parties. They should ensure that intermediaries and brokers have no involvement in prohibited activities.

    Implications

    The Guidance sets out a clear expectation for businesses in the shipping and freight industry to remain wary of circumvention red flags, and investigate such transactions promptly. Businesses should remain familiar with any amendments to the UK’s Consolidated Sanctions List, and the Russia (Sanctions)(EU Exit) Regulations 2019. Breach of trade sanctions may result in enforcement actions including criminal prosecution or civil monetary penalties.

    The Guidance can be found here: Countering Russian sanctions evasion: guidance for the freight and shipping sector – GOV.UK

  • Uzbekistan And Kazakhstan International Disputes: The Role Of London-Based Arbitration In 2025

    Uzbekistan And Kazakhstan International Disputes: The Role Of London-Based Arbitration In 2025

    Cross-border commercial disputes involving Uzbekistan and Kazakhstan increasingly call for the strategic use of international arbitration. Both countries have modernised their legal systems to attract investors and offer transparent and efficient dispute resolution options. Yet, many large-scale disputes still look to London as the trusted seat or court for complex, high-value cases.

    In this article, I examine the latest arbitration developments in Uzbekistan and Kazakhstan, common dispute types, and London’s continued place in resolving complex international disputes erupting within Central Asia.

    Arbitration Reform and Institutional Growth in Uzbekistan and Kazakhstan

    Both Uzbekistan and Kazakhstan have made major advances in arbitration reform in recent years, aiming to align with international standards and enhance investor confidence.

    Uzbekistan Arbitration Reforms

    The Astana International Financial Centre (AIFC) is Kazakhstan’s flagship financial centre in Astana, operating under a distinctive legal framework, with English as the primary language. Modelled on the English common law system, with an independent AIFC Court and International Arbitration Centre, the AIFC aims to position Astana as a regional gateway for capital and investment across Central Asia.

    The AIFC Court has produced 205 judgments in its history with 100% enforcement rate.

    The Tashkent International Arbitration Centre (TIAC), established in 2018, has quickly gained international recognition. By early 2025, its caseload had tripled compared to the previous year, with disputes involving parties from Europe, the Middle East, China, and South Asia. TIAC now handles a wide range of cases, including commercial contracts, joint ventures, and technology disputes such as blockchain.

    In addition, the proposed Tashkent International Commercial Court (TICC) will create an opportunity for foreign investors to apply to the courts in Uzbekistan on the basis of international common law.

    Common Disputes in Uzbekistan and Kazakhstan Arbitration

    Arbitration cases in Central Asia are often linked to large-scale energy, mining, and construction projects.

    One of the largest examples is the Kashagan oilfield arbitration, involving KazMunayGas, Eni, Shell, ExxonMobil, TotalEnergies, CNPC, and INPEX. The dispute, seated in Geneva under the Permanent Court of Arbitration (PCA), concerns claims exceeding $150 billion and is expected to continue until 2028. Kazakhstan is also pursuing related domestic proceedings, highlighting the interplay between international arbitration and local enforcement.

    Similarly, the Karachaganak gas-condensate dispute before the Stockholm Chamber of Commerce (SCC) involves Shell, Eni, Chevron, and KazMunayGas. It centres on profit-sharing and cost recovery, illustrating the complexity of Kazakhstan arbitration and the need to coordinate international and domestic legal strategies.

    Why London Remains a Leading Arbitration Seat

    Although Tashkent and Astana arbitration centres are developing rapidly, London continues to often be the preferred choice for arbitration concerning high-value disputes.

    Older contracts often specify London, Geneva, or Stockholm as the seat of arbitration, reflecting long-standing trust in these established jurisdictions. London offers experienced and independent arbitrators and reliable enforcement under the New York Convention. These factors make London particularly attractive for energy and infrastructure disputes involving Uzbek and Kazakh entities.

    The Role of Chinese and Middle Eastern Investors

    The rise of Chinese and Middle Eastern investors in Central Asia is changing regional arbitration preferences. These investors often favour venues such as Dubai (DIAC), Singapore (SIAC), Hong Kong (HKIAC), and the Astana International Arbitration Centre (IAC).

    These arbitration seats frequently blend English law principles with regional rules and offer flexible dispute resolution mechanisms. For projects linked to China’s Belt and Road Initiative, mediation is often integrated into arbitration procedures.

    Wrapping up

    For small and medium international disputes, it is now possible to have them resolved in the region. However, London is still a highly relevant arbitration seat for complex, high-value international commercial disputes, especially those involving Russian sanctions, attempts to enforce Russian jurisdiction under Article 248.1 of the Russian Arbitrazh (Commercial) Procedural Code APC, and corresponding anti-suit injunctions.

    Frequently Asked Questions

    What arbitration institutions are active in Uzbekistan and Kazakhstan?

    Uzbekistan’s main institution is the Tashkent International Arbitration Centre (TIAC), while Kazakhstan’s key bodies are the AIFC Court and the International Arbitration Centre (IAC) in Astana.

    Why is London still the leading arbitration seat for Central Asia disputes?

    London offers neutrality, expert arbitrators, and strong enforcement under the New York Convention, making it ideal for Uzbekistan and Kazakhstan arbitration cases.

    How does the AIFC Court differ from Kazakhstan’s national courts?

    The AIFC Court applies English common law principles and operates entirely independently from Kazakhstan’s domestic judiciary.

    Which sectors generate the most arbitration cases in Central Asia?

    Energy, mining, and construction are the dominant industries, often involving complex, multi-party contracts.

    How do Chinese and Middle Eastern arbitration seats influence Central Asia dispute resolution?

    Venues such as Dubai, Singapore, and Hong Kong combine English law with regional practices, offering greater flexibility for investors and contractors operating across Central Asia.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    This article does not constitute legal advice. For further information, please contact our London office.

  • Can A Company Withhold  Documents From Investors In A Civil Fraud Claim?

    Can A Company Withhold  Documents From Investors In A Civil Fraud Claim?

    The High Court has ordered that Standard Chartered, the high-profile global bank, must hand over documents related to communications with US and Singaporean regulators. In doing so, it dismissed the company’s argument that it faced criminal prosecution if it disclosed the information to investors.

    Standard Chartered is currently embroiled in a £1.5 billion claim. Investors accused it of concealing critical information concerning sanctions breaches involving Iran. At issue were crucial regulatory disclosures and whether they were misleading or incomplete.

    Why does this matter? Because clear, accurate disclosure underpins investor rights, market integrity, and confidence in financial markets. Therefore, the ruling in Various Claimants v Standard Chartered PLC ordering disclosure provides clarity for investors in England and Wales who have investments in companies caught up in allegations of breaching UK, US, EU, or UN sanctions.

    Background: The Standard Chartered Sanctions Scandal

    Standard Chartered has made headlines in recent years for breaching Iran sanctions, prompting hefty fines from US and UK regulators. The bank was penalised for processing transactions that violated anti-money-laundering rules tied to Iranian interests. These incidents severely damaged its reputation and triggered internal regulatory overhauls.

    Between 2007 and 2019, StanChart issued investor communications, including prospectuses, that glossed over the real extent of its sanctions exposures. Those documents formed the backbone of investor expectations and are now the basis of legal claims.

    The Claimants and Their Allegations

    The claimants represent a coalition of more than 200 institutional investors, totalling around 1,400 funds. Their case is straightforward but far-reaching: they allege that Standard Chartered issued prospectuses and other disclosures that were untrue or misleading, failing to disclose regulatory breaches and thereby distorting investor understanding.

    The essence of the claim is based on “common reliance” or “fraud on the market” theory. In short, this doctrine provides that if a company makes a false or misleading statement that affects its share price, investors who bought or sold shares during that time can bring a civil claim against the company. Critically, the investors do not have to have read the documents containing the misleading statement themselves to claim reliance. What matters is that the misleading statement influenced the share value.

    Standard Chartered’s legal arguments

    Standard Chartered resisted disclosure at every turn, arguing that giving up certain documents would breach confidentiality duties and expose it to prosecution in the US and Singapore. Among the most sensitive materials were internal regulatory reports and communications with foreign authorities.

    The Civil Procedure Rules, Part 31, however, sets a firm test for disclosure. Documents are disclosable if they are relevant, in the party’s control, and not protected by privilege or confidentiality, such that non-disclosure would be just. The question for the court was – did legitimate privilege exist, or was this a shield against presenting inconvenient evidence?

    Judge Green’s Analysis and Ruling

    Judge Green delivered a firm answer. The asserted risk of prosecution abroad was found exaggerated, and there was no credible threat in the US or Singapore that could justify non-disclosure. The judge concluded that public policy favours disclosure in the interest of justice and the effective conduct of civil litigation.

    Ultimately, the court ordered full disclosure of the documents at issue, rejecting confidentiality claims in this context. The ruling underscores that confidentiality cannot be used to avoid presenting documents if, under the Civil Procedure Rules, transparency is clearly warranted.

    What does the decision in Various Claimants v Standard Chartered PLC mean in practice?

    This case marks a critical moment for common reliance or fraud on the market claims in England and Wales. Unlike the US, where such claims are well established, English courts have traditionally been cautious. The StanChart ruling gives new credibility to such claims, making them more viable and reinforcing investor protection.

    Previously, StanChart unsuccessfully attempted to strike out nearly half the claimants’ cases, which the court rejected. That decision showed the English courts’ willingness to allow such group claims to proceed.

    The potential liability for Standard Chartered is enormous, as a £1.5 billion claim is not merely symbolic. Prior fines and reputational damage leave the bank in a highly precarious position.

    The ruling sends a clear message to regulators and boards: transparency matters, and failure to secure it can result in both financial cost and erosion of market trust.

    What Happens Next?

    With disclosure ordered, the case moves into a crucial phase: reviewing the revealed documents, testing their impact, and preparing for trial. Standard Chartered may still seek an appeal, though its narrow window of confidentiality exception has been severely curtailed.

    Conclusion

    This case is a powerful reminder that transparency and accountability are not optional. The courts have taken a firm stand that excuses cannot justify withholding critical information in a civil fraud claim. For investors, it offers renewed hope that legal recourse remains alive where misstatements or omissions occur.

    FAQs

    What is a “common reliance” or “fraud on the market” claim?

    A legal theory where investors sue on the grounds they relied on public statements that were misleading. They need not prove personal reliance if the statements inflated the market as a whole.

    Why did Standard Chartered want to withhold documents?

    The bank claimed confidentiality and risk of foreign prosecution, particularly in the US and Singapore, as reasons not to disclose internal and regulatory materials.

    What did Judge Green decide about confidentiality?

    He ruled that the alleged prosecution risk was exaggerated and that confidentiality did not outweigh the importance of disclosure in civil justice.

    What does this mean for future investor litigation in England and Wales?

    It strengthens the standing of group investor claims, particularly those based on omissions or misleading disclosures, opening a door for broader securities litigation.

    How should financial institutions respond?

    They should review and enhance disclosure controls, ensuring investor communications are accurate, complete, and defensible, especially in multi-jurisdictional claims.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • Eldwick Law Ranked Band 4 in Chambers UK 2026

    Eldwick Law Ranked Band 4 in Chambers UK 2026

    We are honoured to have been recognised by Chambers and Partners as a leading Dispute Resolution Specialist Firm, a category which highlights the UK’s foremost independent and conflict-free boutique practices dedicated to complex disputes and focused on delivering exceptional results in litigation, arbitration, and investigations.

    This recognition reflects the sophistication of our work, the quality of service we provide to our clients, and the dedication of our team in handling cross-jurisdictional disputes. Chambers describes our firm as “a notable international practice, boasting a strong reputation for acting on disputes involving parties based in the CIS and China. The firm has expertise in fraud and professional negligence matters, in addition to representing clients on the full range of corporate and commercial disputes”.

    Special congratulations to Jenna Krüger, recognised as a notable practitioner and described as “a partner who acts on global commercial disputes”.

    As we look ahead, we continue to refine our practice, broaden our international reach, and uphold the standards of excellence that define our approach to dispute resolution.

    We extend our sincere thanks to our clients and colleagues for their trust, support, and valuable feedback.

  • How Russian Sanctions Can Affect Commercial Transactions

    How Russian Sanctions Can Affect Commercial Transactions

    VTB Capital PLC v Continental Capital Markets Ltd

    The yet to be decided case of VTB Capital PLC v Continental Capital Markets Ltd (case number LM-2025-000237), which concerns settling securities trades for a sanctioned Russian company, illustrates how sanctions can result in costly legal disputes concerning contractual non-performance.

    The decision in VTB Capital PLC v Continental Capital Markets Ltd will provide strong indications about how the High Court will interpret the ongoing obligations of contractual parties when one party and their affairs are affected by international sanctions. This is incredibly important for businesses, which require certainty when it comes to entering into cross-border contracts.

    Background of the Case

    VTB Capital PLC (VTB) is the UK arm of VTB Bank, one of Russia’s largest financial institutions. Continental Capital Markets Ltd (CCM) was a London-based brokerage firm specialising in settlement services for securities transactions.

    The two parties had entered into a contract in which CCM was to perform trades in Russian securities. The contract was entered into before Russian sanctions were put in place. However, trades were due for settlement after the UK, EU, and US tightened restrictions on Russian banks. VTB claims CCM owes around $3.4 million for the trades that were left unsettled.

    The timeline leading up to the dispute is as follows:

    • Pre February 2022 – Trades executed without controversy.
    • February 2022 onwards – Invasion of Ukraine prompts coordinated sanctions.
    • Post-sanctions – VTB’s UK operations restricted, accounts frozen, and financial institutions forced to reassess obligations.
    • VTB brings a claim against CCM, alleging breach of contract.

    The Impact of Sanctions

    Although financial sanctions are designed to injure the country or persons connected with a particular State, they can and do cause considerable commercial upheaval and uncertainty.

    For VTB, the sanctions meant its accounts were frozen. The bank was barred from receiving payments or settling trades without UK government authorisation. Similar restrictions applied across Europe and the United States, creating uncertainty for contractual parties such as CCM.

    In practical terms, trades lawfully executed before Russia invaded Ukraine and sanctions imposed could not be settled afterwards. The result was millions of dollars in suspended transactions, leaving brokers and banks exposed to financial and legal risk.

    This is a textbook example of how international sanctions can affect investment bankers, forcing them to weigh contractual obligations against compliance with sanctions law.

    What are both parties’ legal arguments?

    There are three interlocking concepts: illegality, frustration, and sanctions licences.

    VTB position:

    • CCM owes $3.4 million under trades executed before the sanctions.
    • Performance was still possible under an OFSI general licence granted in  February 2022, which permitted certain wind-down activities.
    • VTB expressed a “clear intention” to fulfil its obligations under the contract and argued that sanctions did not extinguish CCM’s duty to perform the trades in question.

    CCM’s defence:

    • Performance of the trades was illegal under UK sanctions law without specific licences that were not available at the time.
    • The contracts were frustrated, meaning events outside the parties’ control made performance impossible.
    • Even where licences existed, they were limited and temporary, designed for winding down positions rather than creating new obligations.
    • Any payment would result in an overall loss rather than profit, since the resale of securities linked to VTB was effectively blocked.

    What are the implications of the High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd?

    The case before the High Court will hopefully clarify the following questions:

    • Can UK sanctions imposed under the Sanctions and Anti-Money Laundering Act 2018, frustrate contracts or simply suspend them until licences permit performance?
    • To what extent should the court prioritise commercial certainty when governments impose sanctions?

    To mitigate the risks of contract disputes developing, due diligence needs to be undertaken when entering into commercial contracts where one party is based, or is a subsidiary of a company based in a volatile region. An experienced Commercial and Sanctions Law Solicitor can assess the risks, including whether the scope of existing OFSI licences will allow ongoing performance. In addition, they can draft effective force majeure and frustration of contract clauses to protect their client’s interests.

    Wrapping up

    The High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd is highly anticipated. However, given the sums involved, certainty may remain elusive whilst the inevitable appeals proceed.

    We will keep you updated as more information comes to light.

    FAQs

    What is the VTB Capital v Continental Capital Markets case about?

    It concerns unsettled Russian securities trades worth around $3.4 million. VTB sued CCM for payment, but CCM argued the contracts were frustrated and illegal due to sanctions.

    What does “frustration” mean in English contract law?

    A contract may be discharged on the ground of frustration when something happens which makes it physically, legally, or commercially impossible to fulfil, or changes the obligations so radically that they are completely different to what was originally agreed.

    How do UK, US, and EU sanctions implemented after the Ukraine invasion affect investment bankers?

    They may prevent payments to and from sanctioned Russian banks, freezing transactions, and making settlement of specific trades highly uncertain.

    What is an OFSI general licence?

    It is an authorisation issued by the Office of Financial Sanctions Implementation allowing limited activities that would otherwise breach sanctions, such as winding down existing trades.

    Why does this case matter beyond the two parties?

    The decision may offer some commercial certainty about how the courts will handle claims brought on the grounds that contractual obligations disrupted by sanctions resulted in breach of contract.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • How Russian Sanctions Can Affect Commercial Transactions

    How Russian Sanctions Can Affect Commercial Transactions

    VTB Capital PLC v Continental Capital Markets Ltd

    The yet to be decided case of VTB Capital PLC v Continental Capital Markets Ltd (case number LM-2025-000237), which concerns settling securities trades for a sanctioned Russian company, illustrates how sanctions can result in costly legal disputes concerning contractual non-performance.

    The decision in VTB Capital PLC v Continental Capital Markets Ltd will provide strong indications about how the High Court will interpret the ongoing obligations of contractual parties when one party and their affairs are affected by international sanctions. This is incredibly important for businesses, which require certainty when it comes to entering into cross-border contracts.

    Background of the Case

    VTB Capital PLC (VTB) is the UK arm of VTB Bank, one of Russia’s largest financial institutions. Continental Capital Markets Ltd (CCM) was a London-based brokerage firm specialising in settlement services for securities transactions.

    The two parties had entered into a contract in which CCM was to perform trades in Russian securities. The contract was entered into before Russian sanctions were put in place. However, trades were due for settlement after the UK, EU, and US tightened restrictions on Russian banks. VTB claims CCM owes around $3.4 million for the trades that were left unsettled.

    The timeline leading up to the dispute is as follows:

    • Pre February 2022 – Trades executed without controversy.
    • February 2022 onwards – Invasion of Ukraine prompts coordinated sanctions.
    • Post-sanctions – VTB’s UK operations restricted, accounts frozen, and financial institutions forced to reassess obligations.
    • VTB brings a claim against CCM, alleging breach of contract.

    The Impact of Sanctions

    Although financial sanctions are designed to injure the country or persons connected with a particular State, they can and do cause considerable commercial upheaval and uncertainty.

    For VTB, the sanctions meant its accounts were frozen. The bank was barred from receiving payments or settling trades without UK government authorisation. Similar restrictions applied across Europe and the United States, creating uncertainty for contractual parties such as CCM.

    In practical terms, trades lawfully executed before Russia invaded Ukraine and sanctions imposed could not be settled afterwards. The result was millions of dollars in suspended transactions, leaving brokers and banks exposed to financial and legal risk.

    This is a textbook example of how international sanctions can affect investment bankers, forcing them to weigh contractual obligations against compliance with sanctions law.

    What are both parties’ legal arguments?

    There are three interlocking concepts: illegality, frustration, and sanctions licences.

    VTB position:

    • CCM owes $3.4 million under trades executed before the sanctions.
    • Performance was still possible under an OFSI general licence granted in  February 2022, which permitted certain wind-down activities.
    • VTB expressed a “clear intention” to fulfil its obligations under the contract and argued that sanctions did not extinguish CCM’s duty to perform the trades in question.

    CCM’s defence:

    • Performance of the trades was illegal under UK sanctions law without specific licences that were not available at the time.
    • The contracts were frustrated, meaning events outside the parties’ control made performance impossible.
    • Even where licences existed, they were limited and temporary, designed for winding down positions rather than creating new obligations.
    • Any payment would result in an overall loss rather than profit, since the resale of securities linked to VTB was effectively blocked.

    What are the implications of the High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd?

    The case before the High Court will hopefully clarify the following questions:

    • Can UK sanctions imposed under the Sanctions and Anti-Money Laundering Act 2018, frustrate contracts or simply suspend them until licences permit performance?
    • To what extent should the court prioritise commercial certainty when governments impose sanctions?

    To mitigate the risks of contract disputes developing, due diligence needs to be undertaken when entering into commercial contracts where one party is based, or is a subsidiary of a company based in a volatile region. An experienced Commercial and Sanctions Law Solicitor can assess the risks, including whether the scope of existing OFSI licences will allow ongoing performance. In addition, they can draft effective force majeure and frustration of contract clauses to protect their client’s interests.

    Wrapping up

    The High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd is highly anticipated. However, given the sums involved, certainty may remain elusive whilst the inevitable appeals proceed.

    We will keep you updated as more information comes to light.

    FAQs

    What is the VTB Capital v Continental Capital Markets case about?

    It concerns unsettled Russian securities trades worth around $3.4 million. VTB sued CCM for payment, but CCM argued the contracts were frustrated and illegal due to sanctions.

    What does “frustration” mean in English contract law?

    A contract may be discharged on the ground of frustration when something happens which makes it physically, legally, or commercially impossible to fulfil, or changes the obligations so radically that they are completely different to what was originally agreed.

    How do UK, US, and EU sanctions implemented after the Ukraine invasion affect investment bankers?

    They may prevent payments to and from sanctioned Russian banks, freezing transactions, and making settlement of specific trades highly uncertain.

    What is an OFSI general licence?

    It is an authorisation issued by the Office of Financial Sanctions Implementation allowing limited activities that would otherwise breach sanctions, such as winding down existing trades.

    Why does this case matter beyond the two parties?

    The decision may offer some commercial certainty about how the courts will handle claims brought on the grounds that contractual obligations disrupted by sanctions resulted in breach of contract.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • Current trends – Arbitration in Central Asia

    Current trends – Arbitration in Central Asia

    Rashid and Charles discussed the dispute-resolution landscape in Central Asia, from differences in jurisdiction and enforcement between states to the rise of construction and renewable-energy claims, and the overlap between commercial and investor-state cases. They also touched on headline matters around the Kashagan and Karachaganak oil fields, using them to illustrate recurring themes such as delay and cost-overrun claims on megaprojects, and the practicalities of enforcing against state-linked counterparties.

    Rashid also shared insights from his career as a dual-qualified UK and Kazakh practitioner and spoke about the growth of the AIFC (Astana International Financial Centre) as a credible regional forum offering English law-based dispute resolution for foreign investors.

    As a London dispute-resolution boutique focused on cross-border matters, Eldwick Law is proud to contribute to thoughtful discussion in this area and to support the legal community’s engagement with a fast-evolving region.

  • Orders against third parties in arbitration

    Orders against third parties in arbitration

    A commentary on s.44 of the Arbitration Act 2025

    Confusing, unsatisfactory, inconsistent. These are some of the words that could be used to describe Section 44 of the Arbitration Act 1996 (“s.44”) just last year. With the Arbitration Act 2025 coming into force in August 2025, reforms have been introduced which aim to enhance efficiency and maintain England and Wales as a leading arbitration destination.

    S.44 Powers Pre-Arbitration Act 2025

    Confusion regarding s.44 stemmed from the fact that s.44(1) did not clarify how far the powers of the court extended. Three major cases relating to s.44 only served to further muddy the waters. The first case, Cruz City v Unitech [2014] EWHC 3704 (Comms), revolved around whether the court could grant an interim injunction against a third party under s.44(2)(e). The High Court concluded that the power did not extend to non-parties and denied the injunction. Similar attempts to apply s.44(2)(b) were equally unsuccessful in DTEK Trading SA v Morozon [2017] EWHC 1704.

    However, in the Court of Appeal case of A and B v C, D and E [2020] EWCA Civ 409, the Court held that s.44(2)(a) – the taking of the evidence of witnesses – was applicable to third parties. The reasoning of Flaux LJ was partially influenced by the fact that it is often rare for a witness to be a party to the arbitration.

    Changes to s.44

    S.44 seeks to clarify any uncertainty with a concise amendment, specifically to s.44(1): “whether in relation to a party or any other person”. The inclusion of ‘any other person’ clarifies that the court now has the power to make orders against uninvolved third parties in support of an arbitral award.

    As regards what orders the court may make, s.44(2) lists them as: 44(2)(a), Taking of the evidence of witnesses

    • 44(2)(b), Preservation of evidence
    • 44(2)(c)(i), Inspection, photographing, preservation, custody or detention of property subject of the proceedings
    • 44(2)(c)(ii), Samples, observation or experiment of property subject of the proceedings
    • 44(2)(d), Sale of any goods subject of the proceedings
    • 44(2)(e), Granting of an interim injunction or appointment of a receiver

    The court’s power to make interim injunction orders against non-parties should serve as a warning to those connected to any arbitral dispute.

    Future Development of s.44

    The Arbitration Act 2025 provides useful clarification on s.44. The conditions in which the court might make orders against third parties are yet to be determined and could likely come down to a case-by-case basis. Third parties’ retention of the full right of appeal under s.44(7) will also likely result in increased litigation as non-parties seek to prevent courts from imposing costly orders upon them. The door has now been opened for direct parties of arbitral proceedings to access orders and evidence previously denied. The dynamic between direct and indirect parties is likely to shift to a more adversarial one as direct parties seek evidence (inter alia) from indirect parties.

    Conclusion

    While the full consequences of s.44 reforms are yet to be seen, this is undoubtedly the beginning of a new era of court involvement in arbitral proceedings. Courts now have the authority to grant a wide variety of orders against third parties. However, the willingness and situations where the courts will grant these orders are yet to be seen and will be an area for case law development.

    Therefore, when arbitral proceedings are being commenced, parties both directly and indirectly involved should be attentive to the rights and obligations that they may have. Swift, decisive action will be vital in protecting their interests and ensuring a favourable outcome.

  • How to Remove a Company Director for Mismanagement

    How to Remove a Company Director for Mismanagement

    Can a company remove a director for mismanagement in the UK?

    Yes. Under UK company law, you can remove a company director for mismanagement but doing so requires a strategic, well-documented approach to minimise risk and ensure compliance with the Companies Act 2006.

    Director mismanagement may include:

    • Breaching statutory directors’ duties.
    • Failure to manage commercial and regulatory risks.
    • Lack of strategic leadership or competence.
    • Breach of fiduciary obligations.
    • Poor financial oversight or misuse of company funds.

    In my experience, once the relationship between a director and other board members deteriorates, trust is difficult to rebuild. Many companies wait too long to seek legal advice, increasing the chance of reputational and operational harm. If legal advice is sought early, non-litigious routes like negotiation or mediation may preserve company value and reduce tension.

    When trust is lost entirely, the business may have no option but to proceed with formal removal, especially if shareholders are concerned about corporate governance, investor confidence, or regulatory scrutiny.

    Can a director be removed without their consent in the UK?

    Yes. A company director can be removed without their consent under UK law. Section 168 of the Companies Act 2006 gives shareholders a statutory right to remove a director by ordinary resolution, regardless of any agreement between the director and the company.

    This means that:

    • The director’s approval is not required.

    • The board itself cannot prevent removal if shareholders hold a majority vote.

    • Any provision in the Articles of Association or service contract attempting to block removal will generally be ineffective against the statutory power.

    However, removal without consent does not eliminate contractual rights. A director may still bring claims for:

    • breach of contract,

    • wrongful dismissal, or

    • unfair dismissal (if also an employee).

    For this reason, companies should treat removal as both a corporate governance decision and a potential employment law process, ensuring procedural fairness throughout.

    Removing a director for misconduct or mismanagement

    Directors may be removed where misconduct or serious mismanagement undermines the company’s interests or breaches legal duties owed under the Companies Act 2006.

    Examples of misconduct may include:

    • Breach of directors’ duties under sections 171–177 Companies Act 2006.

    • Conflicts of interest or undisclosed personal benefit.

    • Misuse of company funds or assets.

    • Regulatory non-compliance exposing the business to risk.

    • Persistent failure to exercise reasonable care, skill, and diligence.

    While UK law does not require shareholders to prove misconduct to remove a director under section 168, establishing clear evidence is often strategically important. Proper documentation helps:

    • justify the decision to investors and stakeholders,

    • defend potential employment tribunal claims,

    • reduce the risk of unfair prejudice allegations by shareholder-directors.

    In practice, companies should gather board minutes, financial records, internal complaints, and correspondence demonstrating the impact of the director’s conduct before initiating removal proceedings.

    Section 168 Companies Act 2006 explained

    Section 168 of the Companies Act 2006 is the primary legal mechanism allowing shareholders to remove a company director before the end of their term of office.

    Key features of section 168 include:

    1. Ordinary resolution required
    A simple majority vote (over 50%) of shareholders is sufficient.

    2. Special notice procedure
    Shareholders proposing removal must give at least 28 days’ special notice before the meeting.

    3. Director’s procedural rights
    The director has the right to:

    • receive notice of the resolution,

    • submit written representations, and

    • speak at the shareholder meeting.

    4. Statutory power overrides company documents
    Even if the Articles of Association or a shareholders’ agreement provide otherwise, section 168 generally prevails.

    Importantly, section 168 deals only with removal from office, not compensation or employment termination. Separate contractual obligations may continue to apply after removal.

    Because procedural mistakes can invalidate the resolution or trigger claims, companies should ensure strict compliance with statutory notice and filing requirements, including submitting Form TM01 to Companies House promptly after removal.

    What are the legal grounds for removing a director in England and Wales?

    Removal by ordinary resolution (section 168 Companies Act 2006)

    Shareholders can remove a director by passing an ordinary resolution with a simple majority (51%). To begin the process, members must serve a Special Notice at least 28 days before the shareholder meeting.

    The director:

    • Must be given formal notice.
    • Can submit written representations in support of their position.
    • Has the right to speak at the meeting.

    The company is also required to file Form TM01 with Companies House once the director is removed.

    Court-ordered removal

    If the company has evidence of unfair prejudice under section 994 Companies Act 2006, the shareholders may apply to court for relief. If successful, the court can order the removal of the director. However, the courts rarely grant this remedy unless the Claimant’s can show serious misconduct or abuse of power.

    Voluntary resignation

    Provided the company’s Articles of Association, Shareholders’ Agreement, and the Director’s Service Agreement allow it, a director may resign voluntarily. No notice period is typically required, although contractual obligations may still apply.

    The process: how to remove a director for mismanagement

    To remove a company director for mismanagement, follow these steps:

    1. Review company documents
      Examine the Articles of Association, Shareholders’ Agreement, and Directors’ Service Agreement. These may specify grounds and procedures for removal.
    2. Serve Special Notice (28 days)
      Give the company at least 28 days’ notice before the shareholder meeting. The notice must detail the proposed removal and be formally delivered to the company.
    3. Inform the director and consider their submissions
      The director has a right to submit written arguments and attend the meeting. Their representations should be read out if they cannot be circulated.
    4. Pass an ordinary resolution
      If more than 50% of shareholders vote in favour of removal, the resolution passes.
    5. File Form TM01 with Companies House which removes the director from the official register.

    Risks of improperly removing a director

    Removing a director for mismanagement is not without legal and reputational risk.

    Employment law consequences

    If the director is also an employee, dismissal may trigger an unfair dismissal claim. To avoid liability, the removal must fall within one of the five fair reasons for dismissal:

    • Capability or qualifications.
    • Conduct.
    • Redundancy.
    • Illegality (continued employment breaches the law).
    • Some other substantial reason (SOSR).

    A formal process with clear documentation is essential.

    Reputational damage and investor concern

    Poorly handled removals can raise alarm bells for:

    • Customers
    • Partners
    • Staff
    • Investors

    To minimise fallout, document:

    • Financial mismanagement or breaches of fiduciary duty.
    • Internal complaints or whistleblowing.
    • Shareholder concerns.
    • Correspondence between the director and board.

    Taking early legal advice and keeping a full paper trail will protect the company’s legal position and public image.

    FAQs

    Can a company director be removed without their consent in the UK?

    Yes. Under section 168 of the Companies Act 2006, shareholders can remove a director via ordinary resolution, even if the director does not agree.

    Is mismanagement a valid reason to remove a director in the UK?

    Yes. Mismanagement may constitute a breach of statutory duties or fiduciary obligations. It may also amount to a fair reason for dismissal if the director is also an employee.

    Can a director bring a claim after being removed?

    Yes. If the director is an employee, they may bring a claim for unfair dismissal or breach of contract. Shareholder-directors may also claim unfair prejudice if removal was part of broader exclusion tactics.

    What documents do I need to remove a director properly?

    Key documents include:

    • Articles of Association
    • Shareholders’ Agreement
    • Director’s Service Agreement
    • Board minutes
    • Form TM01 for Companies House
    Is legal advice necessary to remove a director in the UK?

    Strongly recommended. Removal has legal, commercial, and reputational consequences. A solicitor can guide you through the correct process and reduce risk.

    Getting Legal Help

    To find out more about how our Company Law Solicitors can help you with removing a director or any other company law matter, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.