Deborah Ruff: Could Claims Be Brought Against Russia Under Bilateral Investment Treaties?

Deborah Ruff, the leader of Pillsbury’s International Arbitration practice, says lessors required to terminate their leases with Russian carriers should be concerned by the new law.

“Lessors may seek to recover their losses under insurance policies but there could be exclusions preventing recovery, or lessees may have invalidated or terminated the insurance, replacing it with a policy issued with a Russian insurer. Local remedies will almost certainly fail as Russian courts will apply domestic legislation,” she says.

However, Ruff says it may be possible for lessors to bring claims against Russia under certain bilateral investment treaties (BITs) or under multilateral treaties.

“BITs prohibit expropriation, nationalization or equivalent measures by the host state where the investment is made. Most also require Russia to accord fair and equitable treatment to investors of the other contracting state. The recent Russian measures may constitute expropriation,” she argues.

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