Rusal/RTI v OWH: Cross-Border Enforcement of Arbitration Awards Amid Sanctions and Fraud Allegations

Key Aspects:

• RTI Ltd, a subsidiary of Russian aluminum giant Rusal, refused to pay a USD 43.5 million margin call to German financial institution OWH due to sanctions concerns following Russia’s 2022 invasion of Ukraine. 
• After arbitration ruled in OWH’s favor, courts in Jersey, the Netherlands, and England consistently enforced the award, rejecting RTI’s sanctions defenses and untimely fraud claims. 
• The decisions emphasize the strong international policy to enforce valid arbitration awards despite political and reputational risks from sanctions.

Background and Parties

This case involves RTI Ltd, a company incorporated in Jersey and a subsidiary of United Company RUSAL International PJSC (“Rusal”), one of the world’s largest aluminum producers connected to the EN+ Group. The other party, OWH SE i.L, is a German financial institution currently undergoing solvent liquidation. OWH used to be called VTB Bank (Europe) SE, a subsidiary of VTB Bank PJSC, which is majority-owned by the Russian state.

RTI and OWH entered into a contract on 11 September 2019 under a 2002 ISDA Master Agreement governed by English law. This agreement covered eleven currency swaps (USD-RUB) meant to hedge RTI’s exposure to Russian ruble fluctuations. Rusal guaranteed RTI’s obligations under this contract.

After Russia invaded Ukraine in February 2022, many sanctions were imposed on Russian financial institutions. VTB Bank PJSC was sanctioned by the UK, EU, US, and Jersey authorities. Germany’s regulator BaFin imposed strict controls on OWH, including appointing a sanctions monitor and blocking payments to entities related to VTB.

The Dispute and Arbitration

Following the ruble’s collapse in late February 2022, OWH demanded a margin call payment of USD 43.5 million on 25 February 2022. RTI refused to pay, arguing that the Sanctions and Asset-Freezing (Jersey) Law 2019 (SAFL) prohibited providing funds to sanctioned parties and citing fear of secondary US sanctions.

OWH offered to accept the payment into a segregated Bundesbank account to ensure the money wouldn’t reach sanctioned entities, but RTI still refused. OWH then sent Default Notices by email on 1, 4, and 9 March 2022—though this email method was not strictly allowed by the ISDA agreement. On 23 March, OWH terminated the swaps and issued its calculation of the termination amount on 28 March.

RTI argued these notices were invalid and that sanctions blocked payment. However, the London Court of International Arbitration (LCIA) tribunal ruled on 25 September 2024 in favor of OWH, awarding over EUR 213 million plus interest. The tribunal accepted that although the notices were not served perfectly according to contract rules, both parties acted as if they were valid, so it would be unfair to reject them later. The sanctions argument was rejected since no binding legal ban on payment existed at that time.

Jersey Royal Court Judgments

• 22 May 2025:  OWH sought to enforce the LCIA award in Jersey under the Arbitration (Jersey) Law, implementing the New York Convention. RTI opposed enforcement, claiming a new provision (Article 46A SAFL, effective 8 June 2022) protected actions taken reasonably to comply with sanctions, and enforcement would violate Jersey public policy. The court applied a narrow interpretation of public policy exceptions, ruled Article 46A did not apply retroactively to RTI’s March 2022 refusal, and found RTI’s belief that payment was prohibited was not objectively reasonable. Enforcement was allowed.
   
• 28 May 2025:  RTI tried to overturn a worldwide freezing and disclosure order supporting enforcement. The court dismissed this attempt, confirming sanctions concerns cannot block enforcement of a valid arbitration award. It emphasized that any sanctions defense under Article 46A requires well-documented, proactive compliance efforts, not opportunistic claims.
   
• 16 June 2025:  The court ordered further enforcement actions against RTI’s assets in Jersey, rejecting RTI’s request to delay enforcement pending other cases abroad. Prompt enforcement was declared the default position unless strong reasons to pause existed.
  
   

Other Jurisdictional Decisions

• Amsterdam Court of Appeal (8 July 2025):  In parallel proceedings, the Dutch court enforced the LCIA award and rejected RTI’s sanctions-based objections, noting the obligations arose before sanctions and no lawful payment impossibility was shown. This gave OWH additional enforcement avenues across borders.
   
• High Court of England and Wales (28 July 2025):  RTI and Rusal applied to challenge the award on grounds of “serious irregularity,” mainly alleging fraud by OWH for not disclosing certain documents about the Default Notices. The court found the challenge was filed too late, lacked clear evidence of fraud, and dismissed the claim summarily.
  
   

Sanctions and Ownership Context

RTI is fully owned by Rusal, which is part of the EN+ Group. While Rusal was not sanctioned early in 2022, its Russian ownership posed compliance risks. OWH was more directly affected, as it belonged to the sanctioned VTB Bank group. BaFin’s ringfencing measures separated OWH from its parent for regulatory reasons. RTI argued payment risked breaching Jersey and US sanctions, but courts in Jersey, the Netherlands, and England distinguished political/reputational risks from actual legal prohibitions.

The Jersey court set a high standard for any sanctions defense, requiring contemporaneous, reasonable belief supported by clear advice and active steps. The English court underscored that fraud challenges to arbitral awards must be specific, timely, and well-evidenced. Across all jurisdictions, the strong policy favoring enforcement under the New York Convention prevailed, meaning sanctions concerns generally cannot override the finality of valid arbitration awards unless statutory exceptions clearly apply.