Mr. Mikhail Maratovich Fridman (Russian Federation, Israel) v. The Kingdom of the Netherlands

At a glance

Parties

Mr. Mikhail Maratovich Fridman (Russian Federation, Israel) v. the Kingdom of the Netherlands

Case no.

PCA Case No. 2026-30

Forum and rules

Arbitration under the UNCITRAL Arbitration Rules 1976, with the Permanent Court of Arbitration as registry. The UNCITRAL Transparency Rules (2014) apply. Seat: DIFC (fixed by Procedural Order No. 2).

Treaty

Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the USSR, dated 5 October 1989

Tribunal

Dyalá Jiménez (Presiding Arbitrator), Professor Vladimir Pavić, J. Christopher Thomas KC

Outcome

Pending. The published documents are procedural only. They set the rules of procedure and fix the DIFC as the seat of the arbitration.

The dispute

Mikhail Maratovich Fridman, a national of the Russian Federation and Israel, brought claims against the Netherlands under the 1989 Netherlands–USSR bilateral investment treaty. According to Procedural Order No. 2, the Claimant treats the existence and legality of unilateral economic sanctions as the central circumstance of the case. He is a designated person subject to asset freezes and travel restrictions. The Respondent has indicated that it will raise jurisdictional issues. The published documents do not describe the investment, the measures complained of or the claims in further detail. They also refer to a parallel arbitration that the Claimant brought against another State, seated in Hong Kong.

Key holdings

1. The DIFC is fixed as the seat of the arbitration. Singapore and the DIFC stood essentially in equipoise. The UAE's neutral position on sanctions decided the choice for this specific dispute. Procedural Order No. 2, ¶ 41 and operative part
2. The starting point is Article 16(1) of the 1976 UNCITRAL Rules ('having regard to the circumstances of the arbitration'). The Tribunal applied two kinds of factors. General factors are an independent judiciary, New York Convention membership and a modern, arbitration-friendly law. Case-specific circumstances are experience with treaty arbitration and the Parties' perception of neutrality on the sanctions issues. Capability to host a hearing and convenience were given some weight. Procedural Order No. 2, ¶¶ 23–27
3. Several seats were excluded. Panama was rejected by both Parties. Stockholm was excluded because the Parties had agreed to a seat outside the European Union. Barbados was excluded because its judiciary has no track record in treaty-based arbitration. Geneva was excluded because Switzerland has adopted sanctions similar to those at issue, specifically against Mr. Fridman. Procedural Order No. 2, ¶¶ 29–30
4. Hong Kong was not retained. The Respondent had firmly rejected it on grounds relating to its broader legal and institutional framework, and it had voiced those objections publicly before and independently of this case. The Tribunal held that the Parties' confidence in the process had to be preserved. Procedural Order No. 2, ¶ 31
5. Singapore was not chosen for two case-specific reasons. Its courts might follow the obiter views in Sanum on the USSR–Netherlands BIT, a risk the Tribunal called still hypothetical. Whether economic sanctions form part of public policy is a live issue there. The Respondent's concerns about the DIFC were more general. The DIFC has shown it can handle complex arbitration, and the criminal-code amendment is of past relevance only. The PCA host-country immunity available in Singapore did not outweigh these factors. Procedural Order No. 2, ¶¶ 33–38
6. The Tribunal reserved its authority to modify the seat as a measure of last resort if exceptional circumstances arise. The location of hearings is a separate question under Article 16(2). It will be decided closer to the hearing, taking account of the situation in the Gulf. Procedural Order No. 2, ¶¶ 39–40
7. Procedural Order No. 1 sets the rules of procedure: the 1976 UNCITRAL Rules, English as the language, and the 2020 IBA Rules as guidance. It requires disclosure of third-party funding. It applies the UNCITRAL Transparency Rules. It regulates the use of AI tools: no fabricated or AI-generated authorities, and no unverified AI expert or witness evidence. Procedural Order No. 1, §§ 2, 4, 8, 14–16

Procedural history

1. 2 July 2025The Respondent agrees by letter to relocate the seat of arbitration outside the European Union.
2. 22 January 2026The Tribunal asks the Parties to confer on procedural items, including the seat.
3. 25 February 2026The Parties submit a joint draft of Procedural Order No. 1 and their separate written positions on the seat.
4. 23 April 2026Case Management Conference by videoconference, including oral submissions on the seat.
5. 7–13 May 2026The Claimant asks the Tribunal to defer its decision on the seat. The Respondent opposes the request.
6. 23 May 2026Procedural Order No. 1 (Rules of Procedure) issued.
7. 25 May 2026Procedural Order No. 2 fixes the DIFC as the seat of the arbitration.

Tribunal, counsel and experts

Decided by

• Dyalá Jiménez President
• Vladimir Pavić Co-arbitrator
• J. Christopher Thomas Co-arbitrator

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Keywords

• seat of arbitration
• DIFC
• Article 16 UNCITRAL Rules 1976
• Netherlands–USSR BIT
• economic sanctions
• Russia sanctions
• unilateral coercive measures
• neutrality of seat
• public policy
• Sanum v. Laos
• Hong Kong
• Singapore
• Geneva
• relocation of seat
• UNCITRAL Transparency Rules
• third-party funding disclosure
• artificial intelligence
• Fridman

Summary generated with AI from the published documents — refer to the award for the authoritative text.