Title: The Enforcement Iceberg: Secondary Sanctions and the Hidden Challenges to the New York Convention
Author(s): Shriyans Bansal (View Profile)
Journal: Indian Review of International Arbitration
Source: www.iriarb.com
Abstract:
The New York Convention is the bedrock of international arbitration’s legal architecture. Despite this, the increasingly applied secondary sanctions as instruments of extraterritorial statecraft have introduced significant complexities in the Convention's enforcement mechanisms. The imposition of unprecedented sanctions against Russia on account of its activities in Ukraine shows how much disruption these measures might cause to arbitration. Secondary sanctions are creating geopolitical pressures on the neutrality and predictability of arbitration, and the awards involving sanctioned entities create acute tensions between contractual obligations and restrictions imposed by the state.
The article explores the connections between the New York Convention's sanctions and award enforcement. This provides an opportunity to examine the destabilizing impact of the public policy exemption under Article V(2)(b), which is being used more frequently to excuse unequal enforcement across countries. Such inconsistency undermines the very purpose of creating a predictable and harmonized regime for cross-border dispute resolution. Hence, the paper underlines the chilling influence of sanctions on arbitral processes, which may prevent stakeholders from further engaging with such awards.
The paper seeks to reconcile this conflict through various approaches. This includes suggesting a dedicated sanctions protocol that offers guidance to practitioners and institutions in arbitration encountering sanctions-related disputes, all the while encouraging multilateral coordination to align the enforcement of sanctions with the principles of international arbitration. This way, the arbitral community can help ensure that the Convention maintains its relevance and continues to serve as a bastion of due process and neutrality in the ever changing global order.
Cite this as: Shriyans Bansal, “The Enforcement Iceberg: Secondary Sanctions and the Hidden Challenges to the New York Convention" 5 IRIArb (2025).
*The views expressed are of author(s) only.