The Office of Financial Sanctions Implementation (OFSI) has published a General Licence, allowing for the payment of arbitrators’ fees in references involving persons or entities subject to the Russian asset freeze sanctions. The General Licence and the Publication Note can be viewed [click here].

The General Licence allows for payment of arbitrators’ fees in a reference up to an amount of £500,000 without the need for a specific licence. However, there is an obligation to report to OFSI within 30 days of receipt of the funds. It is important to understand that if a non-designated person or entity involved in the arbitration pays the arbitrators’ fees which were the liability of the designated party or entity (for example they pay a booking fees) then there would still be a reporting obligation.

The General Licence only covers the arbitrators’ fees. The parties will need to make an application to OFSI for a special licence to deal with payments arising from the award itself.

The General Licence does not solve all the problems thrown up in arbitration by the sanctions regimes. However, it is an important step forward as it will allow arbitrators to be paid allowing arbitrations to now progress. It also sends a message to the users of London arbitration that it remains open and accessible for dispute resolution to parties from throughout the world.

This news item is not intended to be legal advice. Anyone wishing to rely on the General Licence who requires guidance should contact OFSI or a specialist lawyer.