Between a Rock and a Hard Place: the Unexpected Risks of Taking a Conservative View of Sanctions
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Key takeaways:
- The English High Court recently handed down two important decisions regarding the scope and application of sanctions prohibitions under the UK Russia-related sanctions regime.
- In the first judgment, the High Court held that the relevant UK sanctions provisions did not prevent the defendant bank from making payments to lessors under letters of credit issued by a designated entity in Russia but guaranteed by the defendant (in circumstances where the letters of credit had been issued in relation to the leasing of aircraft to Russian airlines in Russia but prior to the designation of the Russian entity).
- In the second judgment, the High Court held that the defendant could not in the circumstances rely on section 44 of the Sanctions and Anti-Money Laundering Act 2018, which prevents a person from incurring civil liability in relation to an act done in the reasonable belief that it was in compliance with applicable sanctions law.
- The decisions are another example of the English courts taking a narrow approach to the interpretation of sanctions prohibitions in the context of contractual disputes.