Airbus Canada v. Ilyushin Finance Co.

Ilyushin Finance Co. (a sanctioned Russian leasing company) made an advance payment to Airbus Canada under an aircraft supply contract. The contract was governed by New York law and provided for LCIA arbitration in London. After sanctions were imposed, Airbus Canada was unable to return the advance, and Ilyushin Finance brought proceedings in a Russian court under Article 248.1 of the Russian Arbitrazh Procedure Code. In January 2024, Justice Butcher granted, without notice to the respondent, an interim injunction restraining the continuation of the Russian proceedings. On March 27, 2024, the court granted a final injunction restraining the continuation of the proceedings and the enforcement of any Russian judgment. The English court rejected Ilyushin Finance’s argument that LCIA arbitration was unavailable because of sanctions, noting that OFSI general licenses allow sanctioned persons to use frozen assets to pay arbitration costs in London.

The case confirms that sanctions alone do not deprive a sanctioned party of access to LCIA arbitration.