EU Trends and Developments Contributed by: Nathalie Colin, Maria-Clara Van den Bossche, Florence Frühling and Kevin Xhebexhia, Freshfields LLP
Investor challenges to ISDS enforcement restrictions Some individual investors have also initiated proceed - ings before the CJEU specifically challenging the EU’s prohibition on the enforcement of decisions in ISDS claims and the related right for EU member states to seek damages from investors who pursue such claims, both introduced by the 18th sanctions pack - age. So far, five actions for annulment under Article 263 TFEU have been filed against these provisions. The grounds invoked include violation of the New York Convention, the ICSID Convention, and the principle of good faith under the Vienna Convention on the Law of Treaties, as well as EU constitutional principles such as legitimate expectations and legal certainty. Claim - ants further contend violations of the ECHR, including non-discrimination and effective judicial protection. CJEU preliminary reference in Reibel v Stankoimport Case C-802/24, NV Reibel v JSC VO Stankoimport , concerns the scope of the “no-claims clause”, ie, a provision under EU sanctions law that prevents Rus - sian parties from obtaining satisfaction from claims arising out of contracts or transactions affected by EU sanctions. The dispute arose from a supply agreement between Belgian company NV Reibel and Russian entity JSC VO Stankoimport. In 2017, Bel - gian authorities refused to grant the required export licence due to EU sanctions, preventing delivery of the goods, whereupon the Russian buyer (who had paid in advance) terminated the contract and sought repayment and damages. A Stockholm arbitral award issued in 2021 ordered repayment of the advance, concluding that it fell outside the “no-claims clause”, but Reibel challenged the award before the Svea Court of Appeal in Stockholm, which stayed the pro - ceedings and referred three questions to the CJEU on the interpretation of Article 11 under Article 267 TFEU, with direct implications for the enforceability of awards linked to sanctions-affected transactions. Advocate General Biondi’s Opinion of 26 February 2026 rests on three key conclusions: • While the “no-claims clause” does not preclude recourse to arbitration, it prevents any satisfaction of claims falling within its scope, and the arbitral award must be judicially reviewed for EU public policy compliance.
• The “no-claims clause” forms part of EU public policy, requiring national courts to review compli - ance, even ex officio, and set aside incompatible awards. • Claims for repayment of advance payments fall within the prohibition when the underlying contract or transaction has been affected by sanctions. If followed by the CJEU, this approach would further restrict the enforceability in the EU of arbitral awards obtained by Russian parties. Even awards granting repayment of advance payments may be refused enforcement or set aside on EU public policy grounds. This would confirm a more restrictive trend, where national courts are required, even ex officio, to scru - tinise such awards and deny any relief that satisfies claims covered by the “no-claims clause”. As a result, while arbitration proceedings may still be be permit - ted, the practical value of any resulting award in the EU could be significantly curtailed where it relates to transactions affected by EU sanctions. Takeaways Traditionally, enforcement within the EU relies on a structured approach under instruments such as the Brussels I Recast Regulation, and the New York Convention. Since 2022, however, enforcement has become increasingly sensitive to sanctions-related considerations. EU measures introduce targeted limi - tations on the recognition and enforcement of certain Russian judgments and awards that are designed to circumvent EU jurisdiction in the context of sanctions. Going beyond passive limitations on Russian proceed - ings, the EU also equips member states with practical enforcement tools – such as EU court-issued ASIs and forms of asset freeze – reflecting a clear intention to project EU legal authority beyond its borders. If the CJEU follows the AG’s opinion in Reibel v Stanko- import , national courts will be required to review com - pliance with the “no-claims clause” ex officio, further curtailing the practical value of awards obtained by Russian parties within the EU. Simultaneously, enforcement restrictions create pres - sure within the EU, as: (i) investors’ claims over frozen assets challenge sanctions’ compatibility with proper -
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