Interpreting Sanctions Clauses and the EU Blocking Regulation: The High Court of England Weighs In
October 29, 2018
In recent years, sanctions have become one of the issues of greatest concern for parties entering into international transactions.
As a result, detailed contractual clauses designed to manage sanctions risks have become commonplace. The October 2018 judgment of the High Court in Mamancochet Mining v. Aegis Managing Agency (the “Judgment”) has highlighted certain pitfalls in the standard wording of some sanctions clauses, and should be heeded by any party seeking to contractually protect itself from sanctions risks by, for example, making its performance under the contract conditional upon the non-occurrence of certain sanctions events, or tying a termination event to sanctions. The Judgment also casts some light on the interpretation of the EU Blocking Regulation and suggests exercising contractual rights (even ones designed to ensure compliance with U.S. sanctions) does not breach the Blocking Regulation.
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