Joint press release from PowerShift, Friends of The Earth Europe and other partners
9. December 2025: Russian oligarchs are taking massive action against sanctions imposed by Ukraine and the EU before international arbitral tribunals. As a new study shows. In total, 28 Investment arbitration proceedings – including two lawsuit threats – initiated by sanctioned oligarchs or companies, most of which directly target Russia-related sanctions. The compensation required adds up to A total of $62 billion – almost as much as the EU’s military assistance to Ukraine since 2022.
More than half of the cases where sanctions are directly challenged were filed in 2025 alone. It is striking that investor-state dispute settlement mechanisms (ISDS) are increasingly being used. This instrument of investor protection has long been criticised, but is enshrined in many bilateral investment agreements, including between EU Member States and Ukraine. The fact that these are now being used to sue Ukraine and its supporters for their sanctions policy for billions of euros is highly problematic and once again shows the danger that ISDS can pose to democratic processes.
Fabian Flues, investment policy expert at PowerShift and author of the study, comments:
“Claims before non-transparent arbitral tribunals are increasingly being used to challenge sanctions against Russia’s brutal war. In order to prevent sanctioned oligarchs from engaging Europe, and in particular Ukraine, in multi-billion-dollar litigation, investment protection agreements with Russia and Ukraine must be terminated immediately.”
More than half of ongoing sanctions-related cases target Ukraine's national security measures, taken after the 2014 and 2022 invasions. Russian oligarchs and companies often file ISDS claims through subsidiaries in European countries, including Germany, Austria, Belgium, Luxembourg, the UK and the Netherlands, relying on their investment agreements with Ukraine.
Paul de Clerck, spokesperson for fair business at Friends of the Earth Europe:
“European governments are desperately trying to keep Ukraine financially afloat. At the same time, they allow sanctioned oligarchs to exploit their countries' investment agreements to challenge Ukraine's security policies with billions in lawsuits. The solution is clear: The agreements enabling such actions against Ukraine must be terminated without delay.”
Despite the war in Ukraine, many EU countries have continued to maintain their bilateral investment treaties with Russia and other third countries, despite the fact that the Court of Justice of the European Union already ruled in 2009 that these treaties are contrary to EU sanctions measures.
Examples of lawsuits against:
- Luxembourg: Russian oligarch Mikhail Fridman is demanding $16 billion from the Luxembourg government to freeze his assets. This represents almost half of Luxembourg's national budget.
- United Kingdom: Britain is also facing a lawsuit by Russian oligarch Mikhail Fridman, against whom Britain has imposed sanctions. The compensation claimed is not known.
- Belgium: Four Russian investors with assets at Euroclear officially announced an arbitration suit in Belgium in September and October. The filing of these lawsuits coincided with debates in Europe about the use of frozen assets as reparations loans for Ukraine.
- Ukraine/Germany: After a Ukrainian court found that Russian oligarch Andrey Molchanov was responsible for building barracks for the Russian military, it ordered the confiscation of his shares in a cement company. Molchanov is now suing Ukraine with the help of a subsidiary under Germany-Ukraine BIT.
- France: France is facing two lawsuits from sanctioned Russian oligarchs whose total sum exceeds 4 billion euros.
The full study can be found here: https://power-shift.de/russian-oligarchs-sue-over-sanctions/
Context:
Investor-State Dispute Resolution (ISDS) is an arbitration procedure often included in investment protection agreements between countries. It allows foreign investors to sue states if they feel disadvantaged by political or legal changes. The actions are heard outside the respective national legal system before non-transparent arbitral tribunals – and often result in much higher amounts of compensation than would be possible before national courts.
If you have any questions, please do not hesitate to contact:
Fabian Flues, author of the study: fabian.flues@power-shift.de, +49 (0)30 308 821 92
